Bruce Oakley, Inc. Competition
Now Viewing Bruce Oakley, Inc.'s competition in: Inland Barge Transport
Call Preparation Questions
Customers, Marketing, Pricing, Competition
How does the company manage customer contract negotiations? - Since companies rely on long-term business with key customers, salespeople must be able to maintain positive customer relationships while negotiating favorable contract terms.
How does the company avoid competing based solely on price? - Companies are arming salespeople with tools that emphasize the quality and breadth of company services and capabilities.
Who are the company's primary customers? - Customers for inland barge transportation include energy, agricultural, and industrial companies.
How dependent is the company on its largest customers? - Barge companies maintain ongoing relationships with customers and often depend highly on a small group of large customers.
What are the terms of a typical customer contract? - Services are usually provided under long-term contracts, ranging from one to five years with renewal options. Contracts provide a fixed rate for cargo movement between a specified origin and destination, with adjustments for fuel prices and, in some cases, inflation.
How much of the company's revenue comes from spot contracts? - Barge companies will typically earn between 20 and 40 percent of their revenue from spot contract shipments.
Does the company compete with captive suppliers for business? - Three of the top five dry cargo carriers are captive subsidiaries of American Electric Power, Archer Daniels Midland, and Cargill. The third-largest liquid cargo carrier is owned by Marathon Ashland. These captive suppliers occasionally compete for spot contracts when they have idle vessels.
Competitive Landscape
Demand is driven primarily by the level of agricultural exports, petroleum refining, coal usage, and chemical shipments. Large companies have advantages in handling a broad range of cargo types, along with economies of scale in purchasing and marketing. Small companies compete by specializing in particular cargo types or services, subcontracting to larger companies, and offering responsive customer service. Average annual revenue per employee is about $200,000 for small companies and over $300,000 for large companies.
Business Challenges
CRITICAL ISSUES
Dependence on Petroleum Products, Coal Markets - Petroleum products and coal account for over half the tonnage shipped by inland barge companies. Bulk petrochemical shipments are driven by US production of paper, fibers, and plastics. Demand for black oil products, such as fuel oil, and refined petroleum products, such as gas, depends on weather conditions and auto and air travel. Coal demand is driven by electricity and steel production.
Dependence on Agriculture Exports - Demand for dry cargo barge shipments in the US is affected significantly by the volume of agriculture exports, primarily grain, passing through the Port of New Orleans. Agriculture exports depend on the size of US and worldwide harvests, and on subsidies or tariffs imposed by US or foreign governments. These exports can be volatile: US annual grain exports have fallen as much as 11 percent and risen as much as 16 percent yearly since 2002.
Industries Where Bruce Oakley, Inc. Competes
- Transportation Services
- Trucking
- Specialty Trucking
- Marine Shipping
- Trucking
- Agriculture
- Agricultural Support Activities & Products
