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From: Lance (Fuel Price Studies)
Date: 18 May 2003
Time: 20:29:37
It appears we are having a terrible situation with the diesel fuel prices in the US. Prices have now come back down, but it did hurt us a Service Company in our washing divisions as profits of trucking companies shrank in the 4th quater of 2002 and first quater of 2003. It is affecting everything, since everything we buy is shipped by train or truck and most of the times both. We have artificial fuel price manipulation and large trucking companies operating at less than 3% margins. We have seen 100s of medium size trucking companies file bankruptcy and 1000s of small companies file as well. This is causing problems in the used truck sales market. We have noticed this affect Truck Detail Guys Sales and monthly volumes. Also with all these used trucks on this market it is affecting new truck sales right after several major mergers. There have been lay offs at all large trucking company manufacturers. Employees from Volvo, Peterbuilt, Daimler Chrysler who have been laid off can receive a $2,000.00 franchise fee discount if they join the WashGuy.com team. Fuel prices are a disaster in CA, we have a mandatory diesel engine emissions statue for vehicles over 14,500 GVW. And EPA causing underground tanks to be dug up everywhere. We have huge fuel taxes, which OR has now decided to induce as well. Any truck with no OR plates will be charged extra tax for fuel. Trying to keep road tax money due to a recent law passing to keep registration fees low. Consumers believed they would save money by low registration, now it is simply added to diesel fuel, which affects everything you buy and leads us into recession. This is a big tax on all diesel sales of trucks. WA same thing. Some of the highest prices are now in the west. Even ID, AZ and NV are raising prices but keeping them just under WA, OR and CA. Many truck stops in NV, and AZ even though just over the CA border are keeping inline with just under a nickel per gallon less. Big saving for trucks with 200 gallons of fuel capacity. So now the truck stops in NV, AZ are crowded. And the ones in NM, TX, KS, OK insane where fuel prices are a good 10 to 20 cents per each gallon cheaper. Truck stops in San Bernardino, LAs main distribution hub are busy, but are not selling much fuel. In NV and AZ where fuel does not get taxed as much and wholesale prices are lower but prices only 5 cents less. Diesel fuel Sales and distributors are making insanely high margins, or at least a lot more than normal. Noticed that where most of the people live, such as near water (great lakes and Ocean) that is where the fuel is more expensive? This is causing consumers to be damaged in that the cost of everything goes up. Eight to ten months ago trucking companies all started raising prices 5%. And then another increase. We have not seen a fair price for fuel in UT, MT, WY, CO either yet we should have. The railroad industry is fairing only a little better able to import their own fuel cars to the locations they need to fill at and buy at a bulk price where it is cheaper. After huge consolidations and soon to be more in the rail industry with Canadian Rail Companies. We see problems here too. Especially recently when the Railroads were shut down due to freezing of switchers and safety devices needed for operations. We think we maybe able to realize a great market in these venues in the future. When trucks and trains stop, America Stops too. Most grocery stores and Major Retailers operate on a real time basis, meaning that Inventories of the past and big warehouses are not needed to the same degree as before. This is what the new economy is bringing. It means lower prices to consumers due to inventories being less and less cost needed to store goods for any amount of time. It also means foreign trade zones and areas where there are no inventory taxes such as NV will not be as significant as before, but still needed to compete in the fast paced World. Those foreign trade zones, which were decreed after many of the BRAC military base closures have a one ups man ship on those other areas with warehousing incentives. Places such as Columbus OH and Mathers AFB in Sacramento CA. Of course there are over 400 of these foreign trade zones in the US now and more than 100 more waiting with permits. Some of these old military bases are now superfund sites such as Dobbins AFB out side of Atlanta. As America matures, we have learned allot from our past and we should be taking these learned experiences with us as we deal with any potential threat of economic melt down. With Inventories being less for large retailers, it also means that small manufacturers who want to service the large retailers will have to be able to adapt or die to the relentless need for that retailer to move products faster and faster and inventory the products at their manufacturing facilities, and then move them quicker. But they cannot afford to run their own trucks because the fuel costs will take them out of the running to offer the lowest cost to the purchasing departments of retailer, store the product, make the product, ship the product and offer the best terms on payment to the retailer. Who is not anticipating on paying quickly, but stringing out the payables almost as bad as Sears in the 70s and 80s. Look at the new boss at Home Depot, from GE, savvy guy, watching numbers and look at their CFO, both sharks. Great for shareholders equity, but devastating for the small manufacturers. Will these large companies look to Sam Waltons buy American philosophies? No, they are beholden to Wall Street to save a buck and if that buck is in China, tough. Great makes us competitive here, but we have a standard of living to protect, if we erode our job base and therefore having a declining middle class we lose anyway. Home Depot loses their market and we lose to China. We have allowed 1 million immigrants per year to enter our country nearly unchecked, what happens when these new people are happy at a lower standard of living, driving the wages lower and then causing civil unrest with different races vying for the same jobs before we can stop our self segregation and start melting as was our original plan. If we kill our job base, we are sunk. All over oil prices? It is time for us to stop this bull and move back into the grove. America works better when everyone is winning together. That same mission works well on a sports team, military armies, at the WashGuys and even in the economy. Everything relates to everything else and nothing can be considered of no value and no decision of policy should be arbitrary. Deciding not to decide is a decision and that has not worked yet and we need to do something now. Large manufacturers are competing overseas fiercely due to the dollar being so strong and absolutely running away from every other currency on the Planet. As our dollar runs hard to those other currencies we see Foreign Manufacturers eyes on the US market with her open borders as a place to sell their wares. We have seen just recently many companies in the Car Wash Industry come into our markets. Germans, Italians, Japanese, Chinese, Koreans and their products are the same as ours, it is our designs and technologies mostly. We need to threaten to open up the Alaskan Parks area that was reserved for oil exploitation to get the World prices inline. If they do not respond we need to open up the flood gates and turn on our natural resources with the spicket full open. I see Bush has appointed a Manufacturing Man to the top Treasury position who understands our need for manufacturing jobs. Just because we have been leading the World in innovation and computer intellectual property, expertise and design does not mean we can afford to let our manufacturing dominance continue to depart the US soil. We once made everything here. We mined, manufactured, shipped, consumed and reinvested in our manufacturing ability. Consumers saved, businesses borrowed and we worked together to build. What happened? If and when we become one World economy, and eliminate protectionism and the poor impoverished nations come up to our standard of living then we must come down to match them. I do not believe that the American People want to lose even one ounce of quality of life. The American Dream need not be so elusive. We need to put an end to this fake fuel price increase. If we are to run efficiently with the real time market economy outlined in Dells book, Future Perfect and the Gates book and still make it happen Fed Ex style and run the corporations the GE way. Then and only then we will come full circle. It is time for full scale attack on this fuel situation, which threatens to steal from us all that we have won in the greatest expansion period this country has ever seen. Or if Bush wants to help buddies in TX then allow them to gear up and start supplying at a price that works for the US Citizentry as well as the Good Ole Boys. Lets get the oil to the buyers faster than slower and more than less, at a price competitive and inline with a strong economy. Friedman would be proud if the free market system dictated the fair and equitable price and we could all watch his theories correct our market fluctuations in all sectors due to oil prices. How long would it take? Nearly over night. Greeenspan could watch and control the rest. WashGuys do not care where or who solves our fuel problem. TX is a good market for us. If their economy flourishes so does our company. If oil prices are in check then the industries such as Trucking, Aviation, Automobiles, Marine, etc do well. We wash transportation items so we are good with that too. If not lay offs, bankruptcies, closings in businesses in most all sectors will occur. Fine, we will have more qualified team member applicants out of work ready to join Team Yellow. I believe that no matter what happens 2001 it is going to be one kick ass year for us. It would be better if we regained lost ground in our manufacturing sectors through clean and controlled methods. It would protect us even as we give all of our innovations and secrets to Asian markets ready to capitalize on our Brain Power through imitation at a drop of the hat, because we would have that strong manufacturing base no matter what. Even if they cannot always launch satellites in a country know for its invention of the firecracker, they are coming of age with our free information distribution and their hardwork study habits towards education. The instant communication of the new economy brings with it a need for us to pay attention and keep elementary decisions away from committees, to move quickly. If government cannot cope with this new rigorous pace, then perhaps they should be leaving some of this to Business Leaders. Paul O Niell is a good choice for Bush. We have new technologies and new methods in manufacturing where the solution to the pollution is not in the dilution, but in the manufacturing process. Asking the third World countries to stop polluting is a great idea, why are they not all interested? It is like asking the drug lords to stop growing cocaine and yet tempting them simultaneously with a huge US market of willing buyers of whatever they wish to grow the most of. Previously we have polluted our waters, ground and air. Now we are more responsible and so are many countries in Europe and Japan is also doing well. We need to make sure that our nearest trading partners in the Americas are on the same page if we are to help strengthen their middle class by lending them monies to develop their own manufacturing. These monies for infrastructure should be tied to a clean environment and population growth control. Manufacturing stuff directly over the borders with a country that does not have similar environmental controls is ignorant. Pollution does not stop at man made lines drawn in the sand by man. Wind, rain, rivers deliver and distribute pollution where ever they flow to. One thing Mr. Paul O Neil ought to do first and foremost is to see that the fluoride, which is a by-product of the manufacturing process of Aluminum is no longer sold to water companies and that it is no longer given to the American People at a parts per million rate higher than is safe. It really does not stop tooth decay, but rather hurt the soft membrane tissue in the back of the brain near the area where man gets his stick-to-it-ness and resistance traits. After all Calvin Coolidge did say that Perseverance could solve all the problems of mankind. Paul O Niell knows this having been chairman of Alcoa. Stand up and make a difference Paul. Now is a good time. It is not my intention to blast anyone or cause a rift amongst the masses, but rather to point out the obvious and call for action rather than studying anything while Americans lose their jobs due to improper planning, non understanding, and partisan politics clouding the choices which will decide the fate of the entire Worlds economy. And will inevitably affect our team for no reason other than inconsistent, irrational, and intolerable neglect of the problems at hand. So do something. Stop talking about it and lets get this show on the road. WashGuys will be here tomorrow, will you? All business people ought to pay attention to what is happening as the cards are laid on the table and the future unfolds. The writing is on the walls more than ever before. Be down side protected by detecting the opportunities perceived either good or bad by others, because when the strategic game of business that never ends, is in play, as always, it is you that decides whether to punt or go for it. I cannot wait to see the first XFL game. We are in it to win it and we are in it for the long haul. Thick or thin, we will prevail in the end. If things get tough for a while, so will we. We may not have to worry about our competition, the lack of a formal economic policy with teeth, is sure to kill them anyway, along with 2/3 of the workforce currently employed by small and medium sized businesses. It hurts me to watch this unfold, but we have been through worse and we will never surrender. 2001 is our year, we will seize the day and take what is ours and as our destiny awaits. We still challenge all comers in the market place and promise to continue our commitment to our customer. Lets get this thing turned around, we cannot let our country end up like the competition WashGuys. http://www.orderawash.com
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