on delivery costs How you can save G; a,

Costs hove been spotlighted recently os dealers pare expenses to moximize prof' its, but one expense often not considered is the cost of delivery.

Considered essential, the outgo is underrated by many. Wolly Lynch, president of Builders Express in Dallos' Tx'' thinks this is wrong.

To prove his theories, LYnch, while talking with us, offered to answer ony questions readers might have on the value of minimizing delivery costs ond proce' dures for instituting cuts.

Ifyou have questions on delivery costs, see the box accompanying this article for the way tofind answers-ed.

Q: Should the Interstate Commerce Commission (at the National level) and similar State level authorities that set the rules and rates, and enforce them, be completely disbanded? If not, whY not?

reason. Generally, the specialist is better than the generalist at a given specialty. The chains, like Penney, Wards, Sears, etc., have long recognized this and make use of contract delivery. For what appears to be lack of knowledge, decision making information or emotional reasons, these economic benefits are not widely recognized or pursued by most dealers.

At the peak of its regulatory powers the Federal agency only mildly concerned itself with deliverY crossing state lines. States charge trucking companies fees ranging from $50 to $500 for deliverY authorities purchased and require some reporting annually. The elimination of regulation of contract delivery in Florida in 1980 has not widely expanded its use. lt has lowered its cost there even further and would do the same nation-wide were all states to de-regulate. Those who take time to get the decision making information and act upon it unemotionally will continue to benefit from contract delivery whether regulated or not. It appears, as presently constituted, the ICC, et al, will have little bottom line effect on delivery whether they continue to regulate or are eliminated entirely.

Q: Are there anY industry standards on delivery performance published or available anywhere that you know of!

A: Although these government organizations are broad based and powerful, in the area of delivery of materials from the dealer's yard to the customer, they are virtuallY without portfolio. The only time they become involved is when the dealer replaces drivers on his payroll and trucks his companY owns with a contract delivery oPeration.

Transporting for a Price, hauling for hire or contract delivery, dates back to antiquity and pre-dates any Federal or State regulatory body this country has ever known. It, no doubt, came about for economic reasons and obviouslY remains in favor to this date for the same

A: Unfortunately, no and for all the wrong reasons. For the most part delivery information is so deeply imbedded in the Neanderthal age that most companies won't even afford delivery its own identity on their P & L statements. Delivery consistently and demonstrably costs dealers from l89o to 2590 of their daily operating expenses, yet few identify their numbers much less publish them.

Each year figures are made available by the Hertz Company on operating costs of vehicles, including 2tlr ton trucks it rents and leases. The cost per mile on these delivery trucks is cited without operator and other miscellaneous costs incurred in delivery and varies annudly. One figure, however, that stays consistent each year is miles driven. Consistently, over the yean, these vehicles have been operated, on average annually, 15,(XX) miles.

If the thousands of delivery truck renters and leasers representing the Hertz Company's mileage figures are indicative of the lumber dealer's truck use as well, and there is every indication that they are, the numbers are appalling. Drive

MPH at Per Day Daily Hn. Rate 15,fl)0Miles (255) 7A-5P

25 600 2:21 10:00

30 500 l:58 10:00

35 430 l:41 10:00

If your company operates more hours a day, or more days per year, the numbers are even worse. Granted, vehicles are tied up while being loaded and unloaded as well as during maintenance and refueling, but compare the Hertz time with the performance averaged from the contract delivery side of our business as a frame of reference. Drive the mountains, which required l0 wheelers to handle the weight and the incline. On this basis, his standard equipment for the yard was three l0 wheelers which, in essence, he really needed less than l9o of the time. Obviously, his company was over equipped and would have been much better off to make two trips monthly with smaller equipment.

Q: How do you determine what trucks are right for your delivery operation?

A: There is no exact formula, but a few of the right bits of information can help. First, identify what your equipment is hauling. The pertinent questions are how long is it and what does it weigh. Second, attempt to determine the sales value of each of your deliveries. Third, how full are your trucks when leaving the yard.

The issue is not who is better, but rather what happens to vehicle utilization when delivery is managed. Check your trucks. Would you want figures like yours published?

We did such a study for one of our clients operating eight 2% ton dump trucks with 16' beds. Their trucks, for a peak 30 day sales period, left the yard 600/o empty. Ninety-five percent of what they delivered was l2' long or less. Because this company was concerned with customer service rather than cost, the average sales value of each delivery was $438.15. A simple answer was to replace the eight 2V2 ton trucks with one ton units 12' long. They cost about one-half to purchase and generate twice the miles per gallon of fuel.

Another client, about once a month, sent framing packages into

Over equipping is prevalent. The scissor bed truck with out-riggers at a 250/o or 3090 up-charge over the standard dump is often purchased to deliver products that produce less than 590 of total sales. Don't over equip, and don't let a truck salesman decide what your needs are. Determine what use will be made of the trucks in your yard 9090 to 9590 of the time they are in use.

Questions on delivery costs? Send them to this magazine at 4500 Campus Dr., Suite 480, Newport Beach, Ca. 92660. Wally Lynch will answer them in future issues. This is your chance to take advantage of his expertise in cutting your delivery costs.

Crown Zellerbach is building a $30 million wood products Plant near McComb, Ms., Production to start in late '84 LouisianaPacific has acquired two idle TMA Forest Products facilities, a sawmill in Evergreen, Al., and a plywood plant in River Falls, Al.; lhe So. Div. at Conroe, Tx., will reopen the mill and hold the PIYwood plant as a Possible location for a new Waferwood opera- tion...

Boise Southern an d the Carpenters Union have reached a 3-year wage agreement effective at the Oakdale PlYwood Plant, the Florien PlYwood Plant and the Fisher Lumber Mill, all in La. Champion Internotional Corp. will distribute Weldbord manufactured bY the RoY O. Martin Lumber Co., Martco plant, LeMoyen, La.

Templeman Industrial Lumber, Inc., New Orleans, La., has closed . Scholl Forest Industries,lnc,, Houston, Tx., has opened an office in CorPus Christi, . Cherokee Forest Pro' ducts, Inc., is the new name for Replogle Lumber Co., Inc., Henry,Tn....

Capitol Products Co. of Dallas, a newly formed indePendent distributor located in Garland, Tx., has been named a distributor for CaPitol windows . . . Metro Window Co., Norman, Ok., is a new distributor for Capitol Windows in the Oklahoma City metro area

Norfolk Southern CorP. and Southern Railwoy are converting 500 surplus boxcars to flatcars with piggyback trailer capability Quazite CorP' has been formed in Houston, Tx., bY Lone Star Industries and Shell Oil Co. to develop, produce and market Quazite, a new construction and architectural material

The industrial/construction div. of Black & Decker.Inc. will change its name to the professional products div. effective Oct. I . . . Carlan, Inc. has been renamed Rubbermaid SpecialtY Products Inc. and moved to Statesville,N.C....

The Home Depot,Inc., which recently opened a Tampa, Fl., store, plans a fall opening of a Clearwater unit ScottY's, Winter Haven, Fl., was l8th with $308 million in revenues on the top 20 Fl. firms list compiled bY Florida Trend magazine .

East Coast Lumber, Vero Beach, Fl., has opened a new store, replacing one built in 1952 . . . MacDaniel Builders SupplY, Inc. is new in De Queen, Ar. Railroad Lumber Co. building supplies warehouse has been opened in Dallas, Ga., by Neal Black, owner of Black Sawmill; Charlie Black mgr. . .

Alomo Lumber Co., an Alice, Tx., building material center since 1909, has moved into a new 20,000 sq. ft. building with 7,000 sq. ft. of air-conditioned retail shopping Bill Jones and W.J. Barthel have sold Pocahontqs Lumber Co., Pocahontas, Ar., to Tim Snow and Charles Brooks . .

Pork Corp., South Charleston, W.V. has purchased the Winnfield plywood plant and sawmill from Manville Forest Products Corp., West Monroe, La. Southwest Forest Industries Inc. plans to expand its sawmill in Graceville, Fl. KentuckY Lutnber Co., Louisville, Ky., has closed after 52 years .

Hechinger Co. will open stores in Durham, N.C., and Sterling, Va.. this month . . . W.R. Grace & Co. expects to expand with 20-25 new units this year Several new Texas stores are on the drawing board for Payless CashwaYs

Spence r L um ber Co., Choctaw, Ok., has been renamed SPencer Building Supply by owners Herb Large and Albert Belflower . . Sco//y's is building new units in St. Petersburg and Vero Beach and a replacement store in Big Pine KeY, part of the 8-10 new units they expect to add this year . .

Kentucky Lumber and Building Material Dealen Association and Kentucky Ready-Mixed Concrete Association are among l6 professional societies and trade associations forming a new liaison group, the United Construction Industries Forum, headquartered in Frankfort,Ky....

The American Hardwood Monufocturers Association, the National Wholesqle Hardware Association and the Nationol Retail Hardware Association are discussing the possibilitY of a recommended product code standard for the hardware/hardlines industry

The Asphalt Roofing Manufacturers Association is anticipating the best year since 1979 with shipments of 73 million squares this year . Southeast hardware sales for June were uP .590 from May (latest figs.) and 2.9s/o from the same period in 1982 . . Hardwood lumber production for JulY was up 590 from June, 3690 over lastJuly...

July housing starts declined for the second month in a row, sliPping .60/o from June, to a 1,741,000 unit seasonally adjusted annual rate . Starts of -mult ifam ily units rose 2 I Vo chiefly due to a hot apt. market in Texas July building perritsclimbed for the fourth month in a row

Dallas/Forth Worth, Ix., led second quarter 1983 housing starts with a total of 26,254 units, a l39o/o gain over 1982, notes a F.W. Dodge report . . Houston ranked second with 17,475 housing units, a 24s/o droP from its 1982 performance . Atlanta was up 52s/o at9,206; TamPa/St. Petersburg, up 8690, 7,097; Austin, up 30790, 6,860 units . '

All Wood Not Treated Equal

Ten U.S. and Canadian pressuretreating companies have joined to conduct an educational campaign aimed at broadening knowledge among specifiers and users of the performance capabilities of treated wood.

The new group, the Chemonite Council, notes that industry standards prescribe specific penetration and retentions of preservative for ground contact, fresh water and salt water applications. In practice, however, many purchase orders permit treatment to "refusal." In the case of several hard-to-treat types of wood (green and dry Coast Douglas fir, Englemann spruce, Eastern hemlock, green Hem-Fir and green Northern, Southern and Western pines), with any waterborne salt other than Chemonite. treatment to refusal means penetration of only a few millimeters, not much more protection than would be afforded by a coat of paint.

The hard-to-treat species do accept effective treatment with petroleumsolvent creosote or pentachlorophenol, but the oily residue makes the product unsuitable for many applications.

To assure accepted standards of penetration and retention are achieved, Chemonite Council plants maintain quality control labs in which increment borings are finely ground, compressed and analyzed by modern laboratory techniques. In addition, quality of treatment is certified by the American Wood Preservers Bureau. Through a broad-based advertising and communications effort, the Chemonite Council hopes to educate purchasers and specifiers that hardto-treat woods are doomed to early failure with severe exposure to insects, decay or marine borers if they are treated with waterborne salts to "refusal, "

Members of the Chemonite Council are Domtar Chemicals Group, Wood Preserving Division; MacMillan Bloedel Limited, Wood Preserving Division; J.H. Baxter & Co.; McCormick & Baxter Creosoting Co.; McFarlandCascade; Penta Wood Products, Inc.; Port Huron Truss, Inc.; Southern Wood Treatment Co.: John C. Taylor Lumber Sales, Inc., and Wyckoff Co.

HVAC Buyers Want Short Payback

Trends in residential spaceconditioning equipment point to increased interest in energy efficiency and a more active role on the part of the homeowner in the purchase decision process, according to a study by Hayes/Hill, Inc., and the Gas Research Institute.

The study revealed that purchasers of heating, ventilating, and airconditioning equipment are willing to pay more for energy-efficient products provided that the first-cost premium can be recovered through lower operating costs within a payback pe{iod of about three to five vears.

Promises, Promises

When a customer is promised something, the dealer should write down the request in front of him. Then, follow up on it as soon as possible. Studies have shown that a customer will remember a business by its reliability. If he is let down, he'll remember that too.