Post by montegobayjobs on Dec 5, 2019 6:07:38 GMT
Entrepreneur Jerome Stampp has identified two business models that can offer success in the tough trucking business.
The owner of Stampp Trucking buys second-hand trucks and maintains them under his own personal supervision, using veteran drivers, to minimise operating costs. The alternative he has identified would minimise operating costs by using brand new trucks to fulfil special service contracts.
“Trucking is a rough business,” Stampp declared. “You can reap from it, but you have to get yourself personally involved. Otherwise, it is going to be a challenge.”
His knowledge comes from having acquired his first truck in 1991 after leaving Kingston College. His father, also a trucker, gave him the second-hand truck, while he used his income to buy another. He now has six, along with seven trailers.
“I get to know my trucks by driving them myself, before handing them over to one of my drivers,” he stated. “I do my own mechanical work and ensure preventive maintenance is carried out. It is the cost of the mechanic and the downtime when a vehicle breaks down that take away your profit.”
He now buys his trucks overseas when they are about 12 years old, and has deliberately limited the size of his fleet to ensure that he can directly control the operations. He has also kept the same team of drivers since 2002, pointing out that careless drivers are a major cause of high vehicle maintenance costs.
“I do container haulage and I am comfortable with my scale of operations,” he explained. “If I had to haul bauxite, or wanted to operate a bigger fleet, I would need a different business model, probably using new trucks.”
CHINESE IMPORT
Tank-Weld Equipment Limited took that alternative path and started to import new Shacman trucks from China two years ago.
John Ralston, managing director, of Tank-Weld, said as a construction industry supplier, the company operated the largest privately owned fleet on the island, approximately 123 trucks, before they became the sole dealer for Shacman in Jamaica and the Caribbean.
“On average, 23 per cent of our second-hand trucks were broken down at any point in time,” Ralston said. “These were trucks that would be licensed and insured, but not functioning. It was a massive expense.
“Truck operators were in a bind because banks didn’t want to lend money for used trucks; however, new trucks cost so much that the operators could not justify buying them,” he explained. “That is why the average age of the Tank-Weld fleet was about 20 years.”
Since acquiring the SHACMAN dealership, Tank-Weld has sold more than 400 of the new vehicles.
“These trucks cost substantially less than new ones from the United States, so they are attractive to operators,” Ralston said, pointing out that “Tank-Weld Equipment and JN Bank also formed a relationship to provide financing.”
New, affordable trucks and financing by the JN Group subsidiary offer an attractive package, and parts availability is also an issue in the industry. Mr Ralston declared that for the SHACMAN trucks, “We have 100 per cent of the parts available to our customers.”
SPARE PARTS
He explained that Tank-Weld Equipment made a strategic decision to limit the range of trucks imported, thus ensuring its capacity to stock an adequate supply of spare parts.
“We want to significantly limit or eliminate any downtime for the trucks. We can do this with our 100 per cent parts availability promise and quick service turnaround,” the Tank-Weld managing director explained.
Chris Hind, general manager of JN General Insurance, another JN Group subsidiary, explained that “one of the frustrations for motor vehicle operators in Jamaica is getting their vehicle fixed quickly after a breakdown or an accident. There is often a scarcity of spare parts, as they are not kept in stock on-island, but are shipped in on demand.
“Unfortunately, the sourcing and shipping of parts can take a long time, to the great inconvenience of the vehicle owners,” said the head of the general insurance firm, which provides insurance coverage for a range of motor vehicles, including heavy duty trucks.
“Tank-Weld is to be commended for ensuring that it has a healthy stock of spare parts on hand for all of the models it imports,” Hind said. “This should speed up the repair process and limit the downtime for owners and operators whose businesses depend on the availability of their trucks. Tank-Weld’s strategy is a wise one.”