Rail & truck transportation face changes

By Paul McQuiston Executive Vice President Southern Hardwood Traffic Association Memphis, Tn.

'IUMULAYTIVE railroad statistics for the first 4l weeks of 1982 show a decrease of 41.2s/o in rail carloads of lumber and wood products, exclusive of furniture, loaded and received compared to l979 statistics for the same period.

What can we expect in the way of transportation bargains or new concepts for the movement of our lumber and related wood products for the balance of the 1980s? On the immediate horizon is the possibility that all boxcars will be deregulated so that they can be handled in much the same manner as the TOFC/COFC traffic. The ICC is expected to rule early next year on such a proposal.

With the railroads' privilege of signing confidential contracts with shippers, shippers' agents or shipper associations, we expect the railroads to continue to offer refunds or allowances under certain circumstances where excess equipment or capacity warrant such action. Of course, the shipper or shipper's agent who is able to sign huge volume contracts will enjoy lower rates and better service.

As the economy improves, we can expect an ever-increasing shortage of truckers. We can also look for an increase in freight rates, as the traffic will justify, and as fuel costs begin to creep up agaln.

On the other hand, we can expect the railroads to concentrate more of their efforts, technology and finances on hauling piggyback and contain-on-flat car freight, going more heavily to the "hub center" arrangements, with hauls beyond these hub centers made by either railroad owned truck lines or truck service negotiated by the shipper or shipper's agents.

The stability of freight rates for like distances between the same territories by railroads, as well as the close similarity of mileage rates between truck lines, is not likely to be maintained. There is a great clamor by the large truck lines and by the Ad- ministration to remove the economic regulations from the motor carriers so they can compete on the same basis with the railroads as to TOFC/ COFC traffic. We can expect consideration and action in the 98th Session of Congress.

We should also expect Congressional action on the establishment of

Story at a Glance

Deregulation & legislation factors.. . ICC to remain.. new modes ol operation bargains for the knowledgeable freighl rate increases.

nationwide maximum lengths, widths and gross weights of trucks and trailers over federal highways. More and more talk is being heard as to the sunset of the Interstate Commerce Commission; however. we would expect this to be beyond the 1980s. We can also expect shortages from the railroads, with increases in their freight rates, because of the stockpiling of unneeded equipment, including motive power units. They will be reluctant to pull out this surplus equipment and spend the money necessary to re-equip or put it in service. With the lack of regulations in many areas, the ICC will have less authority to invoke emergency measures in times of car shortages, as it has in the past. ln conclusion, I predict that (l) railroads will place more emphasis upon their unregulated transportation, TOFC/COFC traffic, merchandising it wholesale fashion to the shippers with huge volume traffic or agents with unlimited ability to consolidate and enter into large volume annual contracts, and as such, in competition with the truck lines, we will witness some over capacity in equipment, with some inefficient empty backhauling;

(2) the ease of entry into the trucking business will continue, while trucking, in general, will ultimately be exempted from regulations, thus bringing greater competition where the volumes command it, wasted backhaul transportation and an increase in rates and charges, as the cost of fuel increases and economic conditions improve;

(3) the challenge for shippers and receivers of lumber and related wood products to change their patterns of operation, loading techniques and marketing concepts, will be great, as the bargains in transportation may favor the TOFC/COFC concept in the future; (4) combinations of services will be increasingly attractive.

Good managers will continue to survive

By Doug Ashy President National Lumber and Building Material Dealers Association Washington, D.C.

rlHE PAST

I three years have been the toughest I can remember for the building material dealers and suppliers. There have been many closures. The survivors are evidently good managers.

These successful dealers will continue in 1983 doing the things that have made them successful.

(l) Divenify and chonge to serve your market

This may call for your sales to be all contractor, all consumer or a configuration of these. Consider remodeling, millwork, components, trusses, concrete, picture framing, building contractor or whatever your market dictates. The key is to know your market.

(2) Keep up with your industry. We are in a fast moving industry and there is no doubt that if youdonot attend industry meetings and stay ac- tive, your business will suffer. What are the latest techniques in purchasing, inventory control, accounting, pricing, personnel training and compensation, selling, advertising, security, equipment, financing, etc.?

Story at a Glance

Good management techniques vital to survive tough times... dealers must unite for protection .you must make it happen. We must be experts to run a successful business.

(3) Manage wisely. Are each of the above items professionally executed? Prepare a budget. Have an accurate monthly statement you can use to measure your business, pointing out your weak and strong points. Make sure you are getting maximum productivity from your staff. Good communication between employees and management is a must. A regularly scheduled personnel meeting is important in maintaining communications. If yours is a consumer yard, do you know what consumers are looking for? Contractor yards should be knowledgeable in proper techniques for maintaining their trade.

Let's look at a few other ingredients that affect our business.

It is imperative that we building material dealers stick together and fight for or against legislation. The only way to do that is through our National Lumber and Building Material Dealers Association and its federated affiliates around the country. We must be united!

My belief is that we will see our economy improve in 1983 and that 1984 will be an excellent year for our industry. Let's do some planning, be cautious, keep up with our industry, stick together, and manage wisely, so we can reap the benefits of a better future.

Let me share these words of wisdom: There are three types of businessmen-the kind who make things happen, the kind who watch things happen, and the kind who wonder what happened.