There are three certainties in life Death, Taxes and that the cost of doing business will perpetually rise. We try explain what were doing to make our business as efficient as possible to keep our prices fair and our service level high.
INCREASED FLEET OPERATING COSTS
The Auckland Regional Fuel Tax coupled with a weakening NZ dollar against the US and higher importer costs has seen Diesel Prices increase massively in recent months.
While we may see some plateauing of prices over the Christmas period the general consensus among economists is that we will continue to see fuel costs rise well into 2019.
October also marks the governments increase in Road User Charges (RUC) to the tune of
4-6% depending on vehicle rating. When combined with increased fuel prices this has a substantial impact on operating costs.
Our Response
Work Smarter not harder. Building an efficient fleet and optimising our dispatch to ensure we can maintain a high service level while reducing kilometres travelled by each vehicle.
BUILDING AN EFFICIENT FLEET
We have long been fans of Hino Trucks since we purchased our first one new 10 years ago. Aside from the quality and driver comfort we love the fact that the Hino 300 and 500 Series trucks are rightsized for the work we do, making them efficient to operate and yet they outperform the rest of the market in power and handling. In the last 2 years we have completed the build on four new Hino trucks, that keep our fleet lean and reliable.
To learn more about Hino Trucks click here
WORKING SMARTER WITH ASSET ONE
Asset One is a complete end-to-end online solution for the towing industry that covers job creation, dispatch, storage, quoting, document storage, invoicing, and customer communication.
AssetOne has allowed us to more efficiently manage our truck movements ensuring that we not only send the nearest truck to a job, but it allows us to track an enormous amount of data that we can use to analyse the efficiency of our fleet.
For more information on AssetOne click here
LABOUR COST INFLATION
Labour Cost Inflation is set to rise in line with historical trends over the last few years, as we move towards the Governments target of $20 per hour minimum wage by 2020.
Our Response
Build a great team that want to stick around and then look after them like family. When it comes to our team we play the long game.
We support paying our staff a living wage so our focus here has been to automate some administrative tasks so that our team can focus their time and energy on tasks that add more value to our customers.
We consider our team family and we work hard to retain staff over a long period with 50% of our staff having ticked up five years of service or more. This allows us to reduce the cost of turnover from employees leaving and the need to retrain new employees from scratch.
We maintain a strong affiliate network through our National Recovery Alliance partners and others who are able to support us in times where staff are unexpectedly away means that we can maintain service levels without having to carry as high a staff levels as we would if we worked in isolation.
This year John celebrated 10 Years with our Alfa Westcity family, you will see him most mornings stationed at the Waterview Tunnel ready to assist at a moments notice.
COMMERCIAL PROPERTY PRICE INFLATION
The following image is taken from Auckland Councils GIS viewer and represents relative land values across Auckland, its interesting to note that since 2014 the price of land in West Auckland Industrial precincts has increased from $300-350 per square meter to an average of $1,000-1,200 per square meter.
If we consider that a standard car occupies a space measuring 2.5 meters by 5.0 meters or a total of 12.5 square meters, this puts the current price of a car parking space at $12,500 to $15,000.
For more information on cost of land increases click here
Our Response
Improve the movement of vehicles through effective storage management, while considering engineering solutions to increase capacity.
With land prices ever increasing it is paramount that we find ways to best use the land we have available.
LEAN STORAGE MANAGEMENT
One way for us to do this is to ensure vehicles are kept moving through the storage process. That is to say they are assessed quickly and moved on to repairers or damaged vehicle auctions as quickly as possible.
AssetOne provides us with an easy tool to manage this process.
We can see how long a vehicle has been in our yard and assess how that compares with our internal business metrics. On average we like to move Accident Vehicles through our storage yard inside of 10 days while 28 Day Police Impounds are moved on in no more than 40 days, if they remain uncollected.
Using our unique interactive checklist system we can see how far through the storage process each vehicle is while a pie chart provides a visual representation of the vehicles progress, ensuring we pick up lingering vehicles quickly.
CREATIVE ENGINEERING SOLUTIONS
It is conceivable that in the near future we will need to consider the introduction of multilevel vehicle storage systems to get the most our of every square meter of land. We are constantly exploring cost benefit analysis on different storage systems taking into account not only the capital costs of installing such equipment but the ongoing maintenance lifetime maintenance costs of operating such equipment.
In Conclusion
ALFA Westcity Towing & Storage will always seek to innovate as a preference to increasing prices, in our 20 year history we can count on one hand the number of prices increases we have undertaken. Our goal is always to operate efficiently and intelligently while maintaining a high quality service, fleet and team.