As 2022 comes to an end, TruckNews.com reached out to several trucking industry executives to ask about the biggest challenge their fleets will face in the coming year, and how they plan to address these issues.
In this installment, Ron Tepper, executive chairman of Fastfrate Group, offers his thoughts.
Q1: What is the single greatest challenge that your business will face in 2023?
Our biggest issue — one of many at the moment — is dealing with the economic slowdown that appears to be coming.
This is a period of inflation. Wages are higher. Oil remains very expensive, even though the price per barrel is down 20%, the actual price per liter is just modestly down. Insurance costs are up significantly. Parts, new and used equipment — everything is more costly, but recuperating those costs while business slows down will be difficult.
Our leadership team and our employees have been resilient facing the various supply chain issues in the last couple years and will continue to navigate through the new challenges that inflation will present.
Q2: What steps are you taking to address that challenge?
We have tools that predict our margins. We will make sure nothing we handle falls below our margin requirements and we will act as we have always done, and that’s as a solutions provider. It simply means we have a team of engineers that looks at our customers’ needs, and we find ways to reduce costs or speed up service or provide alternative solutions. This is offered at generally higher margins but is a win-win for us and our customers.
On the truckload side, we plan to sweat the assets an additional 12 months where it makes sense. This will reduce our requirement for cash by 20%. We plan to grow this business by opening new facilities in Winnipeg, Halifax, and a new terminal in Montreal, and we are open to acquire companies that could enhance our total package.
We are both asset- and non-asset-based and we plan on increasing variability and reducing fixed costs.