What Ground Transportation Can Learn from the Toilet Paper Shortage
The pandemic brought to light a global conundrum. The shutdowns showed us all how vulnerable and ill prepared we’ve been for such an emergency. Today, there isn’t a company –or industry – that isn’t hyper focused on supply chain management. So, what is it exactly and how does it relate to transportation service?
The pandemic brought to light a global conundrum. The shutdowns showed us all how vulnerable and ill prepared we’ve been for such an emergency. Today, there isn’t a company –or industry – that isn’t hyper focused on supply chain management. So, what is it exactly and how does it relate to transportation service?
In its simplest form, Supply Chain Management describes the “flows of goods and services downstream, flows of money upstream, and flows of information both ways. Supply chain management means taking charge of those flows in order to satisfy demand and increase efficiency,” according to Chris Nicholson, CEO of Pathmind.
Just like the toilet paper shortage, our services are reeling in a new reality of lack of human capital and vehicle supply, which has become our own supply chain dilemma. What to do? Well, here’s some researched advice for you that hopefully will be about some relief.
1. Focus your market approach. Stop being all things to all people. Concentrate on a specific market niche for now – whether it is retail business, delivers, contract shuttle or luxury, or if you all your work is overflow for another company (called a White Label business) pick your sweet spot and stay in that lane for now.
2. Keep your core customers an absolute focus! A customer, by the way, can be an end user of your services or a particular affiliate – the point is, make sure your top accounts come first in all you do. Don’t be afraid to turn down a random job if you have to in order to take care of your key clients. They were with you first, and if you take care of them in this shortage situation, they will be your longtime loyal customers in the future.
3. Keep your offerings and your pricing simple and straight forward. Keep your payment policies simple and straight forward too. Do not float money at this time because the cost to collect is more time/money and distraction you can’t afford.
4. Pool your regional resources. Partner up with other local transportation providers who do not compete directly with you. For example, if you specialize in bus wine tours, outsource your sedan work to a trusted luxury operator and visa versa. Those same non-competitive companies may be able to share staffing resources to.
5. Improved operational efficiency through automation is key. Outsource your customer service, your book keeping, maintenance, detailing and all other time-consuming tasks.
6. When short-staffed, your most valuable asset, your people, shouldn't be overworked trying to keep up with unrealistic expectations. Let your employees know what's a top priority and ask them to put their best into that rather than asking them to put their best into everything. Burning out your employees just exacerbates the staffing situation and increases the likelihood of losing more staff due to frustration.
7. Leverage technology. Technology is the great equalizer for most businesses. This is why software-as-a-service (SaaS) has been booming. No longer for the “big guys” technology for just about any price point is available – a whole topic of its own.
One of the biggest and best practices in dealing with low staffing levels is communication. Talking with your employees about the situation. Getting their strategies for coping with work demands is key. Your customers should also be kept in the loop. Keeping lines of communication open and being transparent makes it easier for everyone to understand the limitations and the timeline for resolving issues. Avoid the temptation to say nothing, hoping no one will notice: This strategy almost never works.
GCLA EXPO Coming August 30-31, 2021
Exclusive 2022 SUPER BOWL SUCCESS PLANNING – Breakfast of Champions Panel Announcement
Things are getting exciting here on the pacific coast. The U.S. Open, which generates nearly $200 million over the course of 14 days, will debut at San Diego’s Torrey Pine Golf in early August. At this point, the total daily count for spectators is at 12,000 but by August the PGA believes that they will be allowed to have more than 60% capacity.
The Super Bowl, a one-day event but for chauffeured transportation spans a full week, generates about $100 million for the local community. But this event, unlike any other live sporting event, is massive in terms of attendance and Los Angeles holds the record for the largest Super Bowls in the history of football. Coming off a state shut down like no other, next year’s Super Bowl hosted in Southern California is going to be (H)Yooj!
How big? So big that we don’t have enough transportation inventory to handle the demand. Even with 40 million residents and more than 3,000 active CPUC license holders in the state, California will need a lot of help from the rest of the country to service the Super Bowl.
It’s a tangled process and the reason the GCLA is getting involved. We will be training and mentoring operators within our membership with exclusive information so that our people succeed in cashing in on the Super Bowl next year. For those of you that want our help, you’re in luck. Becoming a member of the GCLA is $6.25 per month. Just sign up on www.gcla.org as a first step.
Be on the look out for information about our EXPO that includes 2 days of networking, education and 30,000 s.f. of exhibits – mostly outside and against the beautiful backdrop of the Pacific Ocean at LA county’s famous Redondo Beach. www.gcla.expo is under way. Attending this session will insure you actually MAKE money…great money. There’s a lot that can go wrong during these insanely busy events and we will cover it all so you avoid disaster. You’ll hear from veterans and experts at Super Bowl logistics, from the NFL and from our state enforcement agencies.
Get ready to RUMBLE!
Join Maurice Brewster and Robert Gaskill for Problem-Solving Session
The luxury transportation industry’s first LIVE event is taking place next Tuesday, March 30 from 9am - 4pm at the Huntington Beach Hyatt Regency. It’s facilitated by the Greater California Livery Association but open to all owners of transportation near and far. There’s still a handful of seats open. We budgeted for 150 but are able to set the room(s) for 200 so if you’re on the fence, here’s another reason to attend!
Robert Gaskill, owner of Motev in Los Angeles along with Maurice Brewster, owner of Mosaic based in the San Francisco bay area are hosting a trouble-shooting session that addresses your biggest concerns.
This session tackles Insurance. Why are premiums for transportation so high? What can be done? Also included are concerns over cost management – how to revamp pricing transportation, how to bring back staff and what to pay people; how to reduce debt and how to make sure you get the government assistance programs both from the state and federal government. Finally, this team will address the concerns about the amounting accounts receivable challenges from big affiliations who’ve slowed down or stopped paying.
The spirit of this program is to allow attendees to engage in conversation so that we can all come away with methods for dealing with these issues and to clear up the misinformation and confusion in the marketplace today.
Robert and Maurice serve on the GCLA board of directors. Robert is the Vice President and Maurice serves on the Membership Committee. They are seasoned business owners who, just like you, are trying to survive in the most challenging of circumstances.
We are in this to win this and hope we can count on your support so in turn we can help one another move forward in a positive direction.
VEHICLE INSURANCE PERFECT STORM UNPACKED
Many members want answers to the questions surrounding insurance costs for commercial vehicles and all the confusion surrounding the subject.
The first thing you should know is that in California, there was an exodus of insurance carriers that left the market or went out of business in recent months. With exceptions like Merced who was undone by the extensive wildfire damage claims, most
simply were not making money. In fact, commercial auto was unprofitable from 2015 to 2019 and generated underwriting losses from 2012 through 2019. While I know you’re all experiencing “sticker shock” at the cost to insure your vehicles today, the truth is that prices were artificially too low for the past years. Insurers who are left in the market are trying to keep their doors open. We want that because we need insurance. Also, there are much less companies and vehicles doing transportation work. The market has been down 85-95% since early 2020. With less companies buying insurance, there is less dilution. The more insureds, the more the cost of doing business can be spread out. On the converse, a smaller market drives per unit pricing up.
Insurers are targets for claims and suits. There exists an entire industry devoted to milking insurers. With the huge surge in vehicles on the road due to Uber and Lyft, accidents and claims up through 2019 skyrocketed. Defending claims today is 10xs more expensive than just 10 years ago. Guess who has to bear the brunt of those claims? Your premium.
Here is some good news. The California market is opening up with new insurance companies coming in. The Pandemic, for better or worse, has helped insurance companies reinvent themselves with more tools to streamline their businesses and creative ways to approach insuring vehicles, including by-the-mile programs. Also, while not much activity was happening on the insurance underwriting front last year, with so few cars on the road there were many less claims paid out which helped to save insurance company’s bottom line.
You need to have a relationship with your agent. The best way to find the right agent is to network with your peers here at the GCLA. We are taking on this subject at our Spring Conference, being held at the Huntington Beach Hyatt on Tuesday, March 30th. TIB and D.W Ferguson & Associates (Western Partners) are two excellent agencies who are sponsoring our event and will be there to talk in person with you. The cost is $50 as a GCLA member. If you’re not a member we have a combination membership + conference package for you. Just email me at sara@gcla.com or go to www.gcla.show
GCLA Hosts First Town Hall on the Subject of Insurance in Today’s COVID-19 State
This past Tuesday, our association held a ZOOM Town Hall to a PACKED crowd. Selim Aslan, GCLA board of director and owner of MIB in San Diego and Harry Dhillon, GCLA VP and owner of Ecko Worldwide were duel moderators.
The big question of, “What is the state of affairs in CA regarding for-hire transportation regarding changes brought on by the Covid-19 crisis?” was the cornerstone issue. It was addressed by Ken Bruno, the California Public Utilities Commission Program Manager for Transportation Enforcement and Don Wise, Licensing Supervisor for the CPUC. Mark Freeark with TIB Insurance got deep into insurance challenges we all face and Patrick O’Brien, attorney at O’Brien Law and GCLA board of director weighed in on legalities and workers comp issues. Also, Ashley Richmond joined us from AK&A Labs to address drug testing.
Selim asked a great question of the panel to start the session off. “What can we do to improve our relationship with all of you in the spirit of working together while we strive to get through these tough times?” Mark Freeark spoke on behalf of the panel and said the answer is, consistent and clear communication. Staff changes, remote challenges, and new rule have upended our world and what this panel wanted us to know is that they only win if we do. We are in uncharted waters but they are on our side and stand ready to help us.
The question of why insurance costs are rising was also addressed. Transportation insurance has grown to be so costly for insurers they are pulling out of the market. Why? Because litigation expenses have supersized over the last decade and reform laws are needed. For instance, what was a minor accident 10 years ago with a payout of say, $20,000 to $50,000, now settles for $1 million or worse. Even if an operator has a perfect incident record, their premium must help subsidize those humungous claim settlements - which irks a lot of people. In the state of California, the panel noted that only two primary insurance companies – Lancer and Philadelphia are left. Atlas was an example of an insurer that jumped into the transportation market only to file for bankruptcy. Northland Insurance pulled out of the state last month.
The group tackled the idea of the GCLA creating an insurance captive only to determine the costs were too high and the risks too great. The best thing we can do is work together on collective purchasing – meaning group buys on safety equipment that helps lower insurance costs such as vehicle cameras.
Ken and Don from the CPUC helped to clarify confusion about requirements involving Transportation Charter Permits. They also touched on the TNC matter regarding Prop 22 by stating it was too early to know how or what enforcement policies will change. That subject is unfolding. The GCLA was tasked with spearheading a task force to address all things involving the new outcome to which our legislative team has already met on. Stay tuned.
Sara Eastwood-Richardson
It’s Time to Talk, Face to Face.The GCLA F&I Town Hall is on the Books!
I mentioned last week that the GCLA has been working on a virtual Town Hall for its members. Well, I’m happy to report that we have secured the dates and are moving full steam ahead with planning the program.
The GCLA Town Hall is an association first and there is already much buzz! This event will be held on Tuesday, November 10th from 1:00pm – 3:00pm. The program is broken into two parts – starting with an expert panel from the credit and finance world followed by another expert panel from the insurance industry.
The GCLA Town Hall will be moderated by Selim Aslam, CEO of MIB Worldwide Chauffeured Services and Harry Dhillon, CEO of Ecko Worldwide Transportation Group.
Attending this FREE event requires you to (a) be a current GCLA member. If you’re not, go to www.gcla.org and sign up (our membership’s affordable at only $6.25 a month) and (b) register for the event. We will have the registration forms available next week after we secure all of the speakers and an event sponsor.
What You Can Expect from the GCLA Town Hall
We expect more than 100 attendees so all mics will be muted. The moderators will lead a debriefing on what panelists will be asked. Then the Town Hall, made up of questions from our attendees, begins.
You must submit your questions to us in advance. Once you’ve registered to attend, you will receive an email from us soliciting up to 3 questions you want answered by either panel or by both. You are required to submit them by the deadline on the email. The moderators will read the questions on a first-come, first-served basis until our time runs out.
We will record the session and make it available to GCLA members who cannot attend the virtual Town Hall.
Topic Descriptions
The F&I Town Hall will try to clear up the confusion on equipment deferments, address all options for managing fleet overhead and let operators know what are our realities moving into 2021.
On the insurance front, we will unpack confusion surrounding the costs to ramp up portions of fleets. We will address workers comp matters and discuss what is left on the table to negotiate, including extensions if any.
We believe this session will be a positive experience for our members and will do our best to help put your fears to rest by clarifying the uncertainties that we all are facing.
Stay Strong,
Sara Eastwood Richardson
And Now A Word from Our Airlines….
Just today, the CEO of Delta Air Line, Ed Bastian, gave his viewpoint on the return of flight. “In [my] 20 years dealing with crisis, business travel has always come back stronger than anticipated despite what critics say.” Delta’s president, Glen Hauenstein confirmed the worst is over and said the company believes the pandemic's impact on business travel would be behind them in two years or more. “With a slow and steady build in demand, we are restoring flying to meet our customers’ needs, while staying nimble with our capacity in light of COVID-19.”
Hauenstein concedes that, “While it may be two years or more until we see a normalized revenue environment, by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth.”
Let me repeat Mr. Hauenstein’ s key point here. We must RESTORE consumer confidence. But how? By working alongside the airline and hotel efforts. We must be singing from the same sheet of music and since we have a program that is earning praise from the White House to the School House, I urge you to do your research (www.SafeCleanRidecert.com). This is the only frontline training and testing program available to the transportation industry – including school, commuter, luxury, taxi, trucking, military/government, hospitality and corporate fleets. And, the GCLA recently endorsed it which is exciting news in and of itself.
Today I participated on a strategy panel with Scott Calhoun, P.E., PMP, USDOT Policy Advisor to the Secretary of Transportation, Dr. Jonathan Yoder, Lead of the Water, Sanitation, and Hygiene (WASH) team and COVID-19 Response at the Centers for Disease Control and Prevention (joined by his team) and two of the SafeCleanRide advisory panelists, Dr. Amesh Adalja, Ph.D., Senior Scholar at the Johns Hopkins University Center for Health Security, Dr. Dennis Harp, Ph.D., Chief Scientist and Vice President of Food Safety and Quality Assurance. They are all extremely enthusiastic about SCR and its mission to help mitigate risks associated with infectious and contagious disease through education.
The objective of our meeting was to review the best path forward in getting the SafeCleanRide program adopted by states and within all markets. The great news for transportation – that includes YOU – is that this program exists. I am personally involved. From the inception of SCR in April, I worked with the Advisory panel and the training/testing company’s teams along with dozens of other health groups and focus groups to bring this program to life and deliver it to you. We now must educate our employees, our affiliates, our customers, our communities, our airports and municipalities. Importantly, I encourage you to expose SCR to your insurers since training and certificated testing programs can help lower business liability expenses.
The airlines and the hotels are making the same efforts here. They too are working on certificated program, albeit they are much more complex and thus taking much longer. That just means transportation is ahead of the curve and we will be that much more prepared as travel continues to come back. Delta's CEO Ed Bastian stated that, “Roughly 90% of its primary corporate customers have business travelers who are traveling in small numbers, but are getting their own sense for what the new travel experiences is." The recovery has begun.
Stay Safe,
Sara Eastwood Richardson
The Skinny on Transportation Insurance in Today’s COVID Climate
Everyone in this industry took most of their vehicles out of service last spring. Those that did so, received a discounted insurance rate. As counties throughout California and beyond are opening, we are seeing signs of life – albeit mostly retail work – return. It’s probable that many of you are considering taking a vehicle or two out of mothballs. When you do so, I regret to inform you that your premiums will be much higher than they were before they were shuttered. It is simple math and nothing nefarious on the part of the insurance companies. One vehicle is more expensive to insure than, say three or four or ten or fifty. Whatever your old plan was is no longer so you must start anew with literally a new program.
Insurance companies are finding other industries to underwrite while transportation across all channels is in a lull. That means there is less competition. As an example, Northland Insurance is no longer writing in California effective this month. Philadelphia, Lancer and limited to select companies National Interstate are still underwriting in our state. That’s only three companies (or at least that is all I could find and I made a lot of calls). There is a reason there are so few – reward vs. risk and the transportation revenues just don’t bear out for insurers at this time. The good news is that the companies who are in the market have been very fair to us during these times while they have suffered heavily on the commercial side. I believe they will continue to nurture us back to health and will work with each of you on an individual basis – relationship plays a huge role in all outcomes so let civility reign.
What can the GCLA do about this you ask? Just what I am doing now. We can inform our members of the realities of what it costs to fire back up. We can give you advice on what to do, help you to consider all options like pooling fleets, and more. This is one reason we feel it’s time to get a Town Hall meeting on Zoom initiated for you. Selim Aslam, GCLA board of director and CEO of MIB Worldwide Chauffeur Services has offered to moderate for us. Watch for a date to our first Town Hall as we sort out the details. Also, email me a must-have topic and I’ll do my best to accommodate you.
There is something else you need to be aware of regarding insurance. Risk management is now front and center in every conversation I have with travel management companies. Corporations are scared to death to have their employees travel on business or even return to their offices because they fear liability issues relating to Covid-19. As an employer, you too must face the new reality that your frontline has to be protected. You do not want any illness on your watch – regardless of passenger or driver.
This is the absolute reason the GCLA endorsed SafeCleanRide. This is a 3rd party TRAINING program that requires participants to be TESTED on hygiene and sanitation safety. Those that pass the test receive a certificate of completion. This is a standardized program that helps mitigate risks and this MATTERS to the risk management team at insurance companies – and it will help protect you as an employer. Covid has opened a pandora’s box to a world on hyper alert of germs. Operators who are taking a passive stance on this, who think they have covered their basis because they have created company protocols need to think again. Training and testing conducted independently takes this matter to a more secure level. It will help to mitigate risks involved with contagions and public and employee health matters and may help, God forbid, if you should ever have to legally defend yourself. Go to www.GCLA.org and get certified.
Stay strong!
—Sara Eastwood Richardson
Airports and Branding - Are We Falling off the Radar?
Is Our Industry Falling Through the Cracks with Airport Branding?
FlyLAX.com has a beautiful website. There’s a nice tab called GROUND TRANSPORTATION INFORMATION. I clicked on it and here is what travelers see:
“There are several modes of ground transportation that operate at LAX to facilitate the movement of passengers and visitors to and from the airport.”
FlySFO.com is better. At least they actually include our niche on their site. Limos, alias chauffeured services, is bundled with taxi and ride-share under their GROUND TRANSPORTATION tab. However, there is only ONE “limo” company referred by SFO called or Sabet Transportation, better known as Teslaoncall.com. What’s that all about?
San.org, the international airport in San Diego forgot about us too but strangely, they didn’t leave out “walking or biking” under their TO and FROM options tab. Boo!
Making sure that this isn’t just a California thing, I checked out the busiest airport in the country – Atlanta. Much better. They do have a “limousine” exclusive tab. They do have a directory of services. However, the entire block of information is three sentences. I wish I could say the same for LaGuardia. If I had 3.50 reading glasses, I might be able to find a slight mention of chauffeured service, but since I don’t own a set of cheaters that powerful, I have to give New York’s main airport a fail on the industry’s exposure front.
This is an opportunity for our industry – especially now – to work closer with our airports. Help them recognize that our industry carries their First-Class passengers and that those people are major airline users and influencers. By leaving us out of their branding, they are shortchanging their client relationships with their top-tier travelers. At all touch points, our clients should be able to find us on signage, on apps, on websites. This is important. The squeaky wheel gets greased. Let’s take this slow period to do more marketing work with our airports. They need our services for their well-heeled travelers just as much as we need them.
Sara Eastwood-Richardson
Pandemic Insurance Matters
Starting Your Engines – Time to Talk Insurance
Governor Gavin Newsom relaxed some statewide restrictions last week but that was not enough to quell the ever-growing frustration by Californians who want to get back to work. Nearly 30 California counties are threatening to jump ahead of Governor Newsom’s orders and open up. Meanwhile, Los Angeles Mayor Garcetti was forced to walk back a statement his county public health director Barbara Ferrer made on Monday that suggested the Coronavirus lockdown would continue for another three months. In another act of defiance, Tesla CEO Elon Musk reopened his plant in Fremont this week as well.
With more than 4 million people in California on unemployment and a nearly $55 billion budget shortfall for the state, the pressure is on for the state to open the economy faster than leadership is comfortable with.
According to CA-Gov there have been 1.1 million residents tested to date. Of those, just under 7% have tested positive for COVID-9 (73,000 cases). As of May 14th, of those that are carriers of the virus, a little under 4% (3,000) have died due to complications that were exacerbated by the virus. California has 40 million people so all things being equal, the data that CA-Gov has shared means that 7% of our population is likely carriers, or 2.8 million. All lives are precious but at some point, we have to ask ourselves are we winning the battle to only lose the war? I think that is the sentiment being spread all over as more testing and data makes things clearer to all.
What does this mean for us? Cutting through the clutter of all the unknowns, we know these truths. One, clean is the new safe. Sanitation protocols are a must. GCLA is working hard to fine tune a standard for all of you which will happen in the next two weeks. Messaging to the traveler must be aligned with new priorities and new opportunities. I will reiterate what I shared weeks ago. We have an emerging opportunity to recapture lost market share to ride-hail enterprises. We have a chance at procuring more contract work in the “people-mover” space including commuter, non-emergency medical and courtesy shuttle. We know that local business and leisure travel will come back before international travel does. Meeting planners will find a way to reconvene, beginning with selecting destinations that offer fresh air spaces. We are in the sunshine state and as restrictions for meetings relax, expect more open-air gatherings to be the trend which we have an abundance of compared to any other state. We will rise to the occasion, pardon the pun.
If you furloughed your fleets, start getting quotes now for insurance. I say this because you must have insurance to reactivate your CPUC license. While the CPUC announced an expedited plan, which waives the 30-day wait period, you still have to have your vehicles insured before you can get your TCP. You don’t want to leave this to the 11th hour. Give yourself plenty of time to ensure you are on the right side of negotiating your best insurance rate and plan. All things are changing, including insurance.
As always, I am thinking of you in these stressful times. My team is on overdrive to help you recover as fast as possible. Remember to lean on facts and stay clear of all the rhetoric and keep a positive attitude.
Reach out to me any time. We got this!
Sara Eastwood-Richardson
Clean is the New Safe
Clean is the new safe
There was an interesting article recently in Fast Company written by a futurist who sees this pandemic as a very real turning point for transportation in the future. The article goes on to describe all the great lengths transportation businesses will need to take to make their business models work. Of particular interest to me was the part about ride-hail companies. Think about it for a minute. The hail-model of transportation–from a germ standpoint–is fraught with peril. They move random people who come in and out of the vehicles with no duty of care, no insurance of sanitizing protocols, no quality control. Now, think about the chauffeured transportation industry. We have ALWAYS had vehicle cleaning protocols between runs. It’s not a big deal to add a few new kinds of procedures to what we are already set up to do. The article mentions new technologies such as touchless doors but just how in the world is Uber or Lyft going to be able to deliver that product consistently? On the other hand, our chauffeurs handle the doors so for our part this is easy to ensure.
My final takeaway from reading this article (and others similar to this) is that we have a golden opportunity to reclaim the lost “mid-tier” market of business that went to Uber and Lyft simply for being who we’ve always been—high end services. CLEAN is the NEW SAFE. Coming out of this mothball, more consumers will be frightened by interactions with strangers. We have the upper hand here. Our chauffeurs are not random drivers. Our clients know where to find us. We can easily prove our cleaning protocols. Let’s imagine that somehow, we limp through this terrible time only to find what is waiting for us is a new world of consumer consciousness that opens doors for us. Envision you are talking to travelers who do not feel safe (yet) to fly but are willing to travel by vehicle to get from place to place and they (or their employer) chooses YOU over a ride-hail company because you can prove your service is clean therefore, safe. Clean saves lives. This is our new reality and our industry is better poised to sell “cleanliness” than any other transportation vertical in the world.
In the meantime, Silicon Valley is already fast at work for new technologies for the ride-hail industry to include in-vehicle cameras that see in advance who else is in the vehicle pool, including thermal cameras that detect if other passengers have fevers or other indications of disease. Talk abut Big Brother! If our clients are uncomfortable with the drive cams mounted on our windshields, just think how they’d feel getting into a car loaded with virus sensors and backseat cameras? I argue that the tech world’s utopia is our client’s dystopia.
As the markets begin to re-open (the governor of Georgia is opening up the state this weekend), we must start to really imagine the opportunities before us. On this note, we will be offering free webinars, beginning in May. Our first one will be a training video on vehicle sanitation procedures. More on that next week. I love the emails from everyone. Please keep ‘em coming!
Sara Eastwood-Richardson