The announcement by Jevic Transportation - once considered one of the leading innovative companies - that they are shutting down, is a good lesson in learning how to control costs.
When I say learning how to control costs, I'm not only talking only about strategies or operational things, I'm also talking about having the will to do it.
We have to understand that the pressure in the media in connection to reporting economic and business news, where they continually promote higher wages and benefits. The problem is most of these writers and commentators are demagogues, and have no real idea on how that will affect a company.
While Jevic mentioned the economy, tight credit, fuel and insurance costs as the primary factors in having to shut down, in reality another big factor was they paid among the highest wages in the industry, as well as one of the best benefit packages. All the good press and slaps on the back didn't save the company though; that's the bottom line. Now all the jobs will be gone, and workers will have to go to companies that have more control over their expenses.
In our marketing efforts we need to understand that no matter what we do, we need to control and manage expenses; including wages and benefits. The reason why is that is one of the few areas we do have control over. The other things mentioned as reasons for closing, affect all businesses in that industry, and most others, and are macroeconomic issues; something we have little control over.
When all is said and done, we need to manage growth, contain costs, pay market wages and benefits, and manage debt. There will always be slower economic times, and those managing growth and operations the best will survive and thrive, while those paying beyond what the market and business can support, will end up like Jevic Transportation.
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