Jeremy Rayl has witnessed a lot of industry change since he became the third generation to take leadership of his family’s transportation company in 2007. But he knows that today’s stricter regulations and compliance standards are just the beginning.
“There’s a big fundamental change coming in transportation,” says Rayl, CEO of Akron, Ohio-based JRayl Transport Inc., which operates approximately 200 tractors and 600 trailers in the U.S. and Canada.
Yet while other trucking firms have struggled in the past years, Rayl’s company has opened up four new locations, made several acquisitions, grown sales and increased employment by 135 percent to 240 employees in the last five years.
Rayl says the company has stayed competitive in Akron and other areas by being able to identify opportunities, which a CEO needs to be able to do in both a bad recession and a good economy. One of the benefits of doing business in Akron is the access to capital from the area’s large banks.
“With my industry, if you don’t have access to capital you’re not going to have the ability to grow, let alone survive,” he says. “The ability to attract and retain companies here in Akron would center around the availability of capital.”
Because his company has many moving parts and variables that make measuring profitability difficult, Rayl also knows that having a well-defined cost model is absolutely essential in today’s business environment. Ultimately, not understanding your cash flow down to the penny is a critical mistake for a leader, because that’s how you recognize areas that can damage or improve your business.
“If you don’t understand the risks that are out there, then you’re being naïve to the potential things that could possibly bankrupt your company,” Rayl says.
“It’s being able to identify these opportunities and being able to accurately identify our costs, what our revenues need to be and really understanding what drives profitability for our company.”
ROI is the first area Rayl looks at when considering business investments, though the return doesn’t necessarily need to be in dollars. It could also come in the form of improved quality, service level or safety. Either way, the return has to warrant the risk that you are taking on.
“It has to have some sort of measurable ROI and it has to add value to the company whether it is dollars saved or overall quality improvement,” Rayl says.
As the company goes forward in making new acquisitions and adding more U.S. locations, Rayl looks for areas where there is already more demand than the company can support.
“If we open up a new location, we’re already going to have preexisting customers there ready to give us business before we even open the doors,” he says.
By breaking down the risk versus reward and return, Rayl makes calculated investments that meet the changing demands of customers.
“It gives us flexibility and the ability to change as customers needs change, whether it be supply chain solutions, whether it be more efficient delivery options or just reporting for those customers to measure how well they’re satisfying their customers with on-time deliveries,” Rayl says.
That goes for adapting to new industry regulations, as well, such as the now tighter limits on “hours of service” or the number of hours that drivers are allowed to drive in one week.
“Every single hour of that driver’s availability is that much more valuable,” Rayl says. “So it is very important that we are operating that asset and that driver as efficiently as possible to maximize the amount of miles and deliveries in a week that that driver and equipment can do.”
By identifying opportunities ahead of time to invest in new technologies and equipment, he positions the company for future competiveness.
“It represents an opportunity for us,” Rayl says. “If we can be a leading company when it comes to safety standards, equipment standards, driver standards, we’ll be that far ahead of the competition when these new rules are enforced, and they will be coming soon.”