Hard-Hit Trucking/Transportation Firms Must Battle Customer Perceptions of Failure

May 1, 2001
Trucking and transportation companies, among the hardest-hit businesses by the economic slowdown, must be careful not to cause themselves additional damage

Trucking and transportation companies, among the hardest-hit businesses by the economic slowdown, must be careful not to cause themselves additional damage by allowing customers to perceive that their specific operation is having difficulties.

This advice from a major consulting firm is based on a new survey that shows medium- and small-business owners believe companies involved in trucking and transportation are among the businesses most damaged by the current soft economy.

“This survey highlights the danger of a perception growing into a self-fulfilling prophecy,” said Donald J Fletcher, president of the George S May International Co, a consulting firm to trucking and other medium and small businesses.

“Customers respect and prefer to do business with successful people,” said Fletcher. “While they may feel sorry for a business that is having hard times, it is dangerous for a transportation operation to show its difficulties. If it does, customers will begin taking their business elsewhere.”

Transportation companies are expected to be ready to serve their customers. In addition, they're expected to be problem-solvers. However, when services are cut back or the problem-solver is seen as having problems of its own, customers begin to look elsewhere.

The importance for truckers of presenting a successful impression to the customer is confirmed by the fact that positive, growth-oriented actions were selected by 59% of survey respondents as their response to the lagging economy. These activities include increasing sales and marketing (30% of responses), retaining or increasing current employee benefits (12%), expanding internationally (9%), increasing employees (5%), and increasing inventory (3%).

Only 41% are taking actions to reduce business activity. Among these measures are actions to reduce inventory (17%), decrease employees (14%), reduce benefits (11%), and cut back sales and marketing (1%).

“Having the appropriate inventory on hand and a suitable number of employees for conditions are important issues. Reducing these haphazardly can have a boomerang effect when the economy picks up,” Fletcher said.

The May International survey showed a general agreement that the softening economy is hurting most businesses, at least in the short run. Among businesses being hurt the most are retailers, dealerships, manufacturers, and trucking companies. Another group of businesses, viewed as being moderately affected, includes restaurants and food companies, wholesalers, contractors, and business-to-business services.

The healthcare industry was the only category of business viewed as being helped by the slowing economy.

Most respondents (56%) said their companies are being hurt by the economic slowdown. This includes those experiencing moderate negative effects (50%) and those seeing a very negative impact (6%). A clear majority believes the downturn will last less than a year.

“While 76% of the respondents say the economy will turn around before 12 months is over, there is little agreement how many months it will take,” said Fletcher. “In our survey, people's opinions are closely divided among six months (21%), nine months (25%), or 12 months (20%).

A total of 71% believe the business environment is more competitive than in the past, 25% think it is about the same, and 4% believe it has gotten less competitive.

The consultant noted that even those companies that feel competitive conditions have not changed should be careful about a “business as usual” attitude. Unless they feel business as usual means ever-changing, they are could be in for trouble.