Management & Operations

Tougher market requires creative solutions

Posted on January 1, 2001 by Cliff Henke, Associate Publisher/Editor

Last year we forecast that the market for new motorcoaches would grow as well as the economy would. While the economy and the operating side of the industry did just fine, the coach market did not. There were several reasons for this situation, and these factors look to remain important well into 2001. First, interest rates remain high and they look to come down only slightly, especially if new President George W. Bush has his way with big tax cuts. High interest rates, of course, drive up the cost of financing and leasing options, the methods used in the vast majority of new coach purchases. The second factor suppressing new purchases, one that will continue into 2001, is the abundance of used coaches, priced at perhaps historic bargains compared to new unit prices. That further undermines market demand, and it’s why most manufacturers do not see those trends bottoming out until the end of this year. Bigger operating costs in general are the third worry undermining new purchases. Concerns range from additional costs associated with environmental regulations to higher fuel prices to rising driver wages. Plus, operators are seeing competition heat up, which limits their ability to raise linehaul fares and charter and tour rates. These trends are certainly verified in this year’s edition of our exclusive annual survey of the industry’s Top 50 fleets, which can be found in Metro Research. Assistant Editor Caroline Casey reports that the largest operators are buying significantly fewer new coaches this year—and if the largest operators are planning to do so, imagine the plans of the rest of the industry. Stay creative to stay on top All this means that, in times of challenge, operators have to do what they have always done pretty well, and that’s become creative. In this spirit, METRO presents the seven most innovative motorcoach companies that we could find in North America. As Senior Editor Leslie Davis points out in the Top 10 Innovative Motorcoach Operators (found in Metro Research), the companies show there is a broad range of meanings for the word “innovative.” It could be those who started up new types of services, or those who developed unusual partnerships with those affected by the motorcoach industry. It could also be companies that found new ways to make their operations more efficient. Whatever the innovations, they are all examples from which we can take inspiration. Maybe their stories will also get your creative juices flowing. We have new ideas planned, too We, too, are planning some innovations for this year. The first, of course, is the seven most innovative list in this issue. We are planning to do two more similar lists this year, one on the most improved transit systems and another on the fastest growing systems in North America. Those are in addition to our regular annual industry studies, the Top 50 Private Bus Fleets in this issue, the Top 100 Transit Bus Fleets in September/October and our Top 50 Rail Projects survey in June. In the next issue, we will publish an expanded edition of our Guide to the ISO 9000 quality management standard as applied to the public transport industry. Finally, we will debut a new series of Bus Technology Conferences, the first one to be held March 6 to 7 in Anaheim. Space is limited, so contact our conference staff at 310/533-2410 as soon as possible. That, of course, is in addition to BusCon, the annual trade show and conference we help produce, which will be held September 10 to 12 in Cleveland, as well as the annual one-day conference on practical strategies to launching new rail projects. Details for the latter event will be coming soon. All these new ideas stem from a strongly held conviction our magazine has operated by since its beginning in 1904: Listen to the industry, and offer it products and services it can use. Accordingly, if you have any new such ideas, we’d love to hear from you.

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