The Week's Features
Van trailer loaded with potatoes gets stuck on highway
Company will challenge decision to revoke its license
Designed to ease wheel service for European vehicles
Accused of saddling consumers with excessive debt
It’s like a peacock with brilliant colors
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Brian J. Riker of Fleet Compliance Solutions offers the most current information possible on the ELD mandate and the most up to date status of the proposed exemption request from TRAA. Be sure to attend his informative seminar on the subject during the American Towman Exposition, November 16-18, at the Baltimore Convention Center in Baltimore, Maryland. Register today! atexposition.com

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American Towman Magazine Presents the Week in TowingSeptember 19 - September 25, 2018

City, State
RATES
Providence, RI
$82
(Pop. 179,154)
Cape Coral, FL
$150
(Pop. 165,831)
Independence, MO
$200
(Pop. 116,830)
Roseville, CA
$195
(Pop. 128,382)
Light-Duty nonconsensual tow rates as provided by Police Towers of America.
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Grading Yourself

ReportCard2 1e6c5By DON ARCHER

How do you grade the success of your business? How do you know if you're winning? We all like to look at the dollars we bring in each month and benchmark that against some high sales month from the past. But, it would be unwise if that was the only way we graded our success.

Sales and expenses can vary wildly from month to month. One month, the weather will cause you to be slow and you'll be forced to buy a new transmission or pay for unexpected damages. The next month, your fuel bill can shoot up due to no fault of your own, but frenzied motorists will cause a rash of accidents allowing you to offset your added expense.

There's no way to predict what will happen.

In general, monthly sales and expenses is a good place to start; but if you stop there, you could be missing out.

What about counting the number of tows or service calls you perform over a given period? That could tell you how you're doing.

However, the problem with this is the varied service types and dollars collected for each call: they're inconsistent. You could separate and count each type of service and dollars collected for each, but doing this alone won't give you a clear picture of how you're doing.

Have you ever made the decision to provide service to a customer that you knew would make you very little or no money, simply because you didn't want a competitor to get it?

I know you have. We all have.

But is this wise?

Keeping our rates low for certain services to compete can reveal that, if we did the math, we'd be required to do almost twice the number of calls we normally do in order to make a profit.

That line of thinking causes us to ignore some aspects of our business.

Because we're geared toward always wanting more, sometimes we don't stop and think about all of the costs associated with doing business.

Here are some things to consider:

• Are you paying for availability? And if so are you passing that cost onto the customer?
If you pay drivers hourly then you're paying them to be available. Each minute that has your drivers sitting idle is costing you. You must set your rates high enough to, at minimum, recoup those costs.
Remember, this is a business investment—and you should be looking for a good return on investment. If you took that same money and gave it to an investment broker you'd expect a decent return, right? It's no different here.

• Are you taking into consideration the fact that your trucks are depreciating in value?

An $80,000 truck ceases to retain its value the minute the salesman delivers it. The good news is you can trade it in later for half of what you paid for it; but the bad news is you'll need another one well before this one gets paid off.

We're all caught in this trap. We need new trucks to do our jobs effectively, but we want to keep them as long as we can to avoid added expense. However, the longer you keep a truck, the more miles you put on it and the less value it has. That means when you trade it in for another new truck (that's sure to have gone up in price) your mortgage is bigger. And if you're not careful, after a while you'll be driving a light-duty unit but carrying the mortgage of a single-axle heavy unit.

Your rates must be adjusted to offset this hidden expense.

• How about your insurance, repairs, damages, utilities, uniforms and other expenses? Do you even know how much these are costing you? If so are you considering these expenses when determining your rates?

How many calls did you run last year, 10,000 to 20,000? The easiest way to recoup your costs is to take the total of these expenses and divide it by the number of calls you run annually. Add that number to your other costs to get your break-even amount for each call. Of course, some calls will bring in more money and some will bring in less; but it's a good place to start to ensure you're not losing money.

After you have your break-even amount, you'll want to add in your desired profit to get at an average price per service.

Barring any unforeseen events or uninsurable calamities, you will now be reasonably assured that if you can charge at least this amount per call, this business is worth your time.

However, if after doing all this you realize that the market doesn't respond favorably to your rates—and that your competitors have priced you completely out of the market—you'll then need to make some tough decisions.

That may include downsizing, refusing service to customers who pay too little, changing your employee compensation strategy, using a different type of truck or many other money saving moves that can allow you to be competitive again, putting you back in the black.

To get a more accurate idea of how you're doing you need to have an all-inclusive, 360-degree look at your business. When you take everything into account and are 100-percent honest with yourself, you'll realize that the only way to grade the success of your business is to determine if what you're providing is what's needed and at rates the market will bear. Only then can you begin to learn how you're really doing.

Don Archer lives and works in Jefferson City, Mo., where he and his wife, Brenda, own and operate Broadway Wrecker, a 12-truck operation that's been in business since the 1950s. Email him at don@broadwaywrecker.com.
hd-rates

Storm Response Revisited

harvey dd8a0By Brian J. Riker

Hurricane Florence produced severe flooding from Virginia to the Carolinas and caused several deaths. It will require months of hard work by teams of dedicated professionals to clean up. Towmen have already stepped up to the task and are coming from across the country to lend a hand.

I would be derelict in my duties if I did not take this opportunity to remind you of some hazards and legalities of storm response. It is noble to want to help, but it must be done safely and legally.

Safety first, or as I prefer to say, safety always! With the immediate threat of the storm gone, you may be lulled into a false sense of security. Practice situational awareness at all times. Here are just a few of the many hazards that you may face during emergency storm response:


Missing sections of roadways, collapsed bridges or undermined pavement all pose a high risk of injury. Do not drive into floodwaters until they have receded enough to allow confirmation of safe road conditions.

Bacterial contamination in the water from damage to sewage treatment plants, failing septic systems and other infrastructure damage. Take precautions to avoid ingestion of floodwaters or direct exposure to your skin—especially if you have open cuts or sores.

Electrocution hazards from downed wires or flooded underground utility structures. Never assume that power is out until proven otherwise by a competent person from the electric utility service. As utility companies work to restore power they may miss some damage to their distribution system and could re-energize damaged lines accidentally.

Aggressive animals, snakes and marine life may pose a hazard if you are not alert for their presence. It is common for animals to be aggressive after a major storm; they are scared and confused, often displaced from their natural habitat and likely to strike.

Physical safety and security. Law enforcement resources are stretched beyond capacity during the initial phase of any natural disaster, which leads to an increase in theft and vandalism. Be alert for this type of activity, especially when working alone in remote neighborhoods.

Bring your own food and be prepared for limited supplies of fuel. I advise also bringing extra fuel filters and service equipment so that you can quickly repair your truck should you encounter water-contaminated fuel. Bottled water and other non-perishable food is easy to carry in the truck with you. I suggest being prepared for several days should you become stranded somewhere remote.

Waterlogged vehicles pose health hazards even after they have been drained of floodwaters. Mold and bacterial contamination grow quickly, becoming inhalation hazards. Take precaution to limit your exposure to the interior of these vehicles.

Flooded vehicles may have compromised safety systems. Even if they appear to be normal I advise against attempting to start them, as the supplemental restraint system, braking system and even the accelerator control system (gas pedal) may be compromised and could cause injury or death due to unexpected or unusual response.

Although the battery systems of electric vehicles are designed to remain safe from electrocution hazards when submerged, nothing is fail-safe. Always assume it is energized until proven otherwise; however do not attempt to disconnect the battery while still submerged. The presence of bubbling or fizzing from the battery compartment of electric vehicles is normal: it indicates the battery is not completely discharged. This process produces flammable gas and ventilation is recommended. Store these vehicles outdoors and away from all other vehicles, there is a possibility for them to catch fire are drying out due to short circuits, especially when exposed to salt water contamination.

There may also be communication issues. Cellphone service is likely to be disrupted when there are widespread power failures and fuel shortages. Two-way radio systems may be subject to interference from other local users since the licensing for those systems assume that users will remain local to their base location.

There are also legal issues to contend with. Depending on who requested your response, you may have some relief from state or federal motor carrier regulations. On Sept. 10, the FMCSA issued an emergency declaration of relief from some provisions of their regulations for motor carriers directly assisting in the emergency response.

This declaration does not supersede state-level licensing requirements nor does it apply to simple vehicle salvage operations such as transportation to salvage pool storage lots. The intent is to allow for unrestricted flow of emergency relief supplies such as food, water, fuel, generators, medical supplies and such.

If you are working at the request of a state, federal or local agency to clear the highway or assist with rescue efforts then you likely can use this emergency exemption. If you are only removing damaged vehicles from private property after an insurance company has declared them a loss, then you are still fully subject to all regulations including hours of service and state operating authorities, permits and licensing.

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