FROM THE DESK OF THE PRESIDENT: RICHARD LICATA – Page 2
Happy Summer! We are officially halfway through 2022. While Quarter 1 was still dominated by COVID-19, we have begun to return to a sense of normalcy. Since our game plan served us so well last year, we put in place many of the same strategies again for 2022. These strategies are motivated by the notion of operational excellence resulting in superior service and receiving excellent reviews.
Some of the unique actions that we duplicated from last year was to again increase our local rates; this action has now been done two years in a row. Additionally, like last year, we made the whole summer peak rates. Both these actions were done with the intent to pay our helpers and front-line crews the level of pay that can compete with the Amazon’s and Costco’s of the world. On the interstate side, we again established the Do Not Service List (DNSL), self-restricting the 20% of the business that causes 80% of the problems. Thus, eliminating moving customers to those hard to service locations that would cause our drivers to deadhead. In this manner, we were able to save our capacity and just service those shipments to and from our main routes. Finally, we again paused all non-account resident-to-resident local moves when our local capacity reached 80%.
We benefited from this game plan for the first half of 2022 as demand continued to be strong. Last year the pricing level for our interstate fleet was at an all-time high – level 15. In years past we’ve rarely booked business at this high pricing level. This year, we’ve raised the bar even higher and adopted pricing as high as level 20. I’m not even sure what that effective discount level is; but one thing is for sure, our over-the-road fleet is very happy as they retain most of that revenue. Our O&I business continues to be very strong again this year. We received the good news that Loyola Hospital has awarded us with their much sought-after internal moves. We anticipate this work starting as soon as this month. Also, despite stiff competition to resecure the Northwestern University business, we were again awarded the business for the next 5 to 7 years. As I reported, this was very tenuous as this account now represents almost 10% of our business. But with our excellent service and innovative technology, Northwestern saw the value in maintaining our relationship.
I am also happy to report that the areas most affected by the pandemic, our National Account and International business, has been bouncing back. Although not quite at 2019 levels, it is good to see that business ramping up.
On a down note, during this very hectic time of the year, it is with regret that Laurie Gomez has decided to retire after 35 years of faithful service to Reebie. Although I’m happy for her that she gets to do all the things she never had time for, it did create a big void for us to fill. We hired 3 new Reebie Team members to help fill that void. We hired Michelle Abbs in accounting, Roberto Vinci to be part of the sales team and Sam Stapleton as a summer intern. So, it’s safe to say that Laurie must have been doing the work for three.
As pleased as I am the first half of the year, I think we are heading into some headwinds going into the second half. The top economists are talking about an inevitable recession as the Feds are trying to slow the economy down with raising interest rates. We are already seeing a slow down in the housing market; and if people aren’t selling homes, they aren’t moving. So hopefully the economists can manage it in a way where we have a soft landing and we can finish the year strong.
But even with these challenges, I remain optimistic this year because of the excellent sales staff we have and the operational excellence we provide. The heat of the summer is upon us so let’s work together to bring us another successful moving season.
Bring on the Summer Sales!