February 11, 2011

Dear NJGCA Member:

Here's what you'll find in this edition of the NJGCA Road Warrior, and thank you for reading:

EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS!
•Marketplace mischief, Cash/Credit Pricing & Sting Cars

NEWS AROUND THE STATE
•Legislative panel reviews constitutional amendment on privatization guidelines
•New Hudson commuter rail tunnel announced
•Governor, mayors discuss regional police departments; aim to save public funds
•Toll collectors consider concessions to avoid privatization

A SPECIAL MESSAGE FROM BELLOMO FUELS
•Serving New Jersey since 1910 -- 100 years of supplying gasoline retailers like YOU!

TRAINING CLASS SCHEDULE
•See our latest training class schedule below!!

POLITICAL PARTICIPATON: THE NJGCA PAC
•Participate in the NJGCA PAC today and help us keep our Agenda rolling in Trenton!

THE MEMBER TOOL BOX
•On the NJGCA Homepage
•Know your Territory Manager!

 EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS! 

MARKETPLACE MISCHIEF, CASH/CREDIT PRICING & STING CARS

The volatility – and confusion – in the marketplace continues this week.  Even as I digest all the production reports and related information out there, one cannot escape what is plainly obvious: Actual inventories are stables and demand is flat.

Crude oil is traded as a commodity, in which the laws of supply and demand are SUPPOSED to determine the value of the product as it is bought and sold on the open market.  However, I’ve also been complaining ad nauseum about the speculative nature of this all-important commodity and how traders will bet up or down the price by trying to peg future needs.  I can honestly say that, while the past jump in prices have been utterly excessive, right now is the first time in two years that speculators are somewhat justified to bet up the price, thanks to the situation in Egypt.  Remember, much of the world’s oil passes through the Suez Canal on the way to and from refineries.  It’s strategic and economic importance can’t be overstated; any disruption in the control and operation of the canal could make fuel prices skyrocket.

Troubles in Egypt aside, usually the price in January and February typically trend lower since people aren’t driving as much.  However, that certainly isn’t the case right now.  In fact, prices for February 2011 are at the highest level we’ve ever experienced in a February.  EVER!  We didn’t even see prices hit this high in 2008, when gas topped $4 a gallon and the public was calling to have all retailers executed for high pump prices. 

So what does this mean?  Truthfully, I don’t have a clue!  Experts say the price is going to continue to climb as the unrest in Egypt is played out (and probably after as any new/reform government takes shape).  Markets love stability and foreseeability – and we currently have neither in the land of the falafel and Pharaohs.  As a word of caution, however, I will say that these experts ALWAYS say the price will skyrocket during ANY conflicts, so I’m not surprised to see them repeat the same prediction again here. 

Keeping all of this in mind, I will maintain that because of the fragile nature of our economy, and because motorists don’t have extra cash to pay for additional fuel, the average person will find ways to drive down their personal consumption.  And I don’t need fancy spreadsheets or hours of pundit commentary to figure that out – it’s just common sense.  That is especially true as unemployment remains very high and job creation is very low.  However, if the situation in Egypt stabilizes, and both oil consumption and production remain even, then prices will have to drop.  Yes, yes – much more seasoned experts than I will disagree with me, but what would be the basis of an additional increase if supply lines aren’t interrupted in the Suez Canal?  If that were to happen, and any kind of blockade or civil unrests prevents ships from transporting oil to the worlds’ economies, then the price will climb and stay high.

Even while the geopolitics of the situation play out, YOU MUST SUSTAIN YOUR PROFIT MARGINS!  This is especially true as the volume of consumption drops and the prices rises.  None of you got into this business to give product away and lose money.  This is especially important since credit card fees will assuredly cut into your profits. 

When and if this happens, I strongly urge you to reconsider how you price your product.  If you are not already implementing Cash/Credit Pricing, then I advise you to do so.   As the price climbs well beyond $3.00-mark, the credit card fees will make your profits evaporate.  Do not give up the 8-10 cents that that credit card is costing you.  Trust me on this – it could mean the difference between making ends meet and boarding up your shop. 

HOWEVER, if you are already utilizing a Cash/Credit Pricing structure or are planning on implementing one, I INSIST YOU DO IT PROPERLY!! 

Remember that we don’t have the most sterling image in the small business world and an (often) unfounded stigma continues to harm the public perception of retailers everywhere.  Don’t let the public (and lawmakers), who are constantly looking to throw you under the bus, have even a slight chance to pounce on you. 

Do NOT give them the ability to come fine you!!  Do NOT give them the opportunity to say you’re a crook and paint all your fellow small business owners as thieves!!  This means your street signs MUST match the price sign on top of your pump, and you must display both your cash and your credit prices. 

If you don’t remember what proper signage looks like, please see a few examples below to help you implement a Cash/Credit Pricing plan:

Example of a properly formatted and displayed pump-topper sign.  Notice the cash price is listed above the credit price, in accordance with the regulations NJGCA worked out with the Department of Weights & Measures.


Example of a properly formatted street price sign. If your sign does not have room for all fuel grades, be sure to at least display your regular octane gas price with the cash price listed above the credit price as shown above.

Since Safety Inspections were eliminated last summer from the motor vehicle inspection program, many of you (and your inspectors) have started to forget what steps you’d have to take to do such an inspection.  I know you are thinking, “Sal, but we don’t have to do those anymore – they changed the law!” --- and you’d only be partially right.

Remember that the law said that Safety Inspections were eliminated for private vehicles, but NOT commercial vehicles.  Since then many of you have fallen out of practice on how to do Safety Inspections and a few of you have even gotten caught by MVC covert sting cars for not recognizing that commercial vehicles are still required to pass them. 

As such, I think it’s important for you all to have a kind of check list of what to do/what to look for when conducing a Safety Inspection on these vehicles.  Take a look:

• Verifying Credentials
• Drivers License
• Registration
• Proof of Insurance
• Check both Plates
• Other Credentials
• Odometer Function
• Verify Safe Condition to perform tests
• Perform road brake test or equivalent
• perform steering tests
• Glazing - No Mirrored Tint Anywhere on vehicle
• No Tinted Windows
• Horn
• Wipers
• Mirrors
• Tires and Wheels
• Visual obstruction
• Headlamps
• Rear lamps
• Turn signals and Flashers
• Plate Lamp
• Other Lights
• Wiring and Switching
• Perform Brakes Inspection
• Exhaust
• Check for presence of converter
• Check for tampering
• Note any miscellaneous conditions
• Perform visual smoke test
• Perform emission testing
• Complete Inspection according to current MVC guidelines

Just with visits form DEP or the Department of Labor, don’t let government officials catch you with your guard down.  You should be doing these things already, but remind your technicians to keep their eyes sharp for those commercial plates and avoid costly fines!

As an additional reminder, last week we sent out a special Events & Announcements to tell you about a change that may affect your Underground Storage Tank insurance policy. If you haven’t done so already, please CLICK HERE to read the most recent Events & Announcements, and then call me with any questions.

Thanks for listening - See you next week!

Regards,

Sal Risalvato
Executive Director

NEWS AROUND THE STATE

2/10/2011:
Legislative panel reviews constitutional amendment on privatization guidelines
Assembly State Government Committee is considering a constitutional amendment to create strict requirements on state and local governments seeking to privatize government functions.  The measure would force agencies seeking to implement any privatization plan to prove it will save money and not lower the quality of service.  Controversially, the company that is eventually contracted would have to pay their private workers the same pay and benefits as government employees with similar jobs.  Critics contend that the proposal is largely political since it will not significantly save public dollars and is meant to deter the recommendations of the Governor’s Privatization Task Force.

2/6/2011:
New Hudson commuter rail tunnel announced
New Jersey’s two U.S. Senators and executives from Amtrak are anticipated to announce an alternative Hudson rail tunnel plan.  Known as the ‘Gateway Tunnel’, the proposal would replace the ‘Access to Region’s Core’ tunnel that faced billions in cost overruns and ultimately killed by Governor Christie. Click above to read more.

2/3/2011:
Governor, mayors discuss regional police departments; aim to save public funds
In a move to meant to save considerable tax dollars, Governor Christie, urban mayors, and other officials met to discuss the possibility of creating countywide police departments.  While very common in other states, New Jersey towns typically maintain their own municipal departments at great expense.  As budget realities continue to impact government services, the officials hope that shared services will help to keep costs in line while maintaining adequate public safety services.  Already Somerset County is exploring the consolidation of all 19 municipal police forces into a single, unified police department by 2013.

1/26/2011:
Toll collectors consider concessions to avoid privatization
In a move aimed at avoiding a plan privatize toll collections, New Jersey Turnpike and Garden State Parkway workers may make concession in order to avoid losing their jobs.  Officials from the Turnpike Authority have requested proposals from private firms to take over toll collection in July.

CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE