3 ms·
If it's dead weight, why is someone buying it? Selling is different from shuttering.
by gowld 6y ago
If it's dead weight, why is someone buying it?
Selling is different from shuttering.
- tgtweak 6y agoEfficiency. Consider a semi truck as a server. Belonging to UPS it's a dedicated server - when UPS doesn't need it, it's idling for the most part. When it belongs to TFI it's offered as a VPS. If it's sitting in a parking lot because UPS doesn't have a need for it and can't rent it to someone else, it's a quarter million dollar lawn ornament. If TFI can instead, through increased client demand and smarter routing/logistics management ensure that the fleet is moving and making money 85% of the time vs UPSs 60%, that 40% improvement is mostly margin. Throw in economy of scale for things like fleet maintenance, financing, fuel and workforce/driver management and you drive operating costs down on the same fleet doing the same work. Add that up and of TFI can service UPSs demand for less + add their own on top as extra margin, they just created value.