Case Study Question: Case Study Question; High Fuel Costs, Bad Time to Start a Truck Wash Business?

Automotive Guide Case Study Question; High Fuel Costs, Bad Time to Start a Truck Wash Business?

By: Lance Winslow

Automotive:Trucks Guide

The transportation sector is under a bit of stress with high fuel prices. Does this mean there are less trucks on the road and thus less trucks to be washed? Actually, no there are not less trucks on the road, actually large truck fleets are making more money by adding fuel costs into customer pricing.

What about competition during a squeeze to save costs and streamline the sector, more money for fuel means less money for other expenses right? But the larger trucking companies generally sign up with Blue Beacon for $30.00 washes with a corporate discount and they have 90 plus truck washes plus their side brand Hand Wash Charley's.

Now then the smaller trucking companies, which have long-term contracts cannot react to the increased fuel prices as fast like a FedEx, Swift, JB Hunt and they are really hurting. Small Trucking Companies and Independent Truck Drivers do not have the economies of scale to allow them to raise their prices and if they do they can lose contracts and if they don’t they can go bankrupt due to the increases in costs. Either way they lose and typically the Independents are the highest paying truck wash customers you see? Independents are more apt to be the best customers for $55-70 Truck washes, taking pride in their ride.

There are more trucks on the roads, but also extreme pressure to keep quarterly profits up. And economic hick-up and you could find issues with load levels and pull-backs. Right now we are in a major transportation up swing and running redline, so is this a good time to set up a bunch of truck washes? Well, it depends if one can roll with the punches and market to the larger trucking companies who want faster washes to keep the trucks moving down the highway and low prices to meet their budget commands. Please consider all this in 2006.

Lance Winslow

Automotive Guide Tag : Case Study Question   High Fuel Costs   Bad Time

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