Focusing on the Future: Truckstop Operators Look to Innovation and Advocacy

Today's truckstops and travel plaza operators are navigating a mature industry. That means they must continue to innovate to maintain and grow sales. At the same time, they are also keeping tabs on government regulation that may change the way they do business and advocating for the future of the industry.

Being successful in business often means staying ahead of key industry trends and trials. In order to stay ahead of them, operators first have to identify them. NATSO recently asked members which challenges and opportunities will be with us for the next two to five years.

Operators said they remain concerned that government regulations may make doing business more difficult, but they also foresee new revenue streams and customer service opportunities.

“The people that are going to be successful in the future are the ones that know change is a part of doing business and look for the opportunity within that change,” said Don Quinn, president of Sapp Bros Travel Centers, Inc. “Being cautious about where you employ your capital so you can take advantage of those changes as they present themselves becomes a strategy for looking into the future.”

Diversifying Non-Fuel Sales
Improved fuel mileage, reductions in idling and the growth of alternative fuels likely means operators will see a decrease in future diesel demands. That means drivers won’t be stopping for fuel as often, which changes the offerings locations have to have, said Dan Alsaker, chief executive officer of Broadway Flying J Truck Stops and president of Alsaker Corp.

Alsaker isn’t alone. NATSO’s operator survey showed that 40 percent of operators who responded have concerns about the implications of lower diesel and/or gasoline demand.

Tom Heinz, president of Coffee Cup Fuel Stops and Convenience Stores, Inc., said, “Diesel and gasoline consumption will continue to decrease precipitously so non-fuel sales will continue to grow in importance.”

Alsaker said, “We have to ask ourselves what else we can sell them so stopping becomes a habit. The categories of fresh food, food prepared on site, tobacco and coffee take on new importance. We have to be inviting and be tuned into the psychology of selling.”

Alsaker said he is seeing a shift in both freight and drivers, which also means a shift in buying habits. “The long-haul trucking is looking more like the regional trucking as carriers look to appeal to people that don’t want to be gone for two weeks. It is attracting a younger driver because he has more loyalty to his family than his career,” Alasaker said.

With a greater number of younger drivers on the road, there are greater opportunities for full-service casual dining and quick-service restaurants, said Jim Goetz, vice president of Goetz Companies, Inc., which operates the Petro Travel Plaza in Portage, Wis.

“We’re seeing more people doing mini delis, hot sandwiches, cold sandwiches and fresh fruits for people on the go,” Goetz said. “It is clear that the trend is people want to eat healthier and smarter. How we help them with that decision making will be a tremendous opportunity.”

Premade meals may be another area of growth for operators. “The millenials are people that would come to a c-store or grocery store and buy a food product they can take home tonight. Millenials are becoming a bigger factor in how people set their stores,” Alsaker said.

Bob Ryan, president of Atlanta South 75, Inc., said the shrinking pool of owner-operators and increasing number of company drivers will change the products truckers buy.

For Goetz, sales of electronics are on the rise. “Sales of smart phones, iPads and laptops along with the cords, chargers and ear buds are increasing. They continue to have strong margins and appeal to four wheelers and truck drivers.”

Quinn said Sapp Bros. is adding new products in an effort to boost in- side sales, including purses, flip flops and belts, which are selling well.

Locations may also see opportunities in shop repair, Goetz said, particularly as the economy slows and carriers hold onto equipment longer, which means it needs more service. “We’ve seen an increase in road service and in the shop this year,” Goetz said.

Navigating Government Regulations
Operators told Stop Watch their greatest concerns for the future center around government regulation.

“I think the biggest issues for all of us are legislative issues in Washington D.C.,” Goetz said.

While commercialization and tolling have been ongoing concerns for the industry, Goetz said the slow economy and shrinking highway trust fund mean the issues will continue to come up. He said the industry is going to have to continue to be vigilant in maintaining the federal ban on the commercialization of rest areas.

Mark Augustine, president of Triplett, Inc., said, “Government regulations probably prohibit and slow down more growth in this economy than anything I can think of.”

For many operators, healthcare requirements remain a top concern, especially complying with the Affordable Care Act. “It has so many different things in it and it changes almost daily,” Ryan said.

Augustine said the Affordable Care Act might change the way locations staff their stores as business owners shift to more part-time employees because they’re subject to different health care requirements than full-time employees. “We’re trying to manage out of that area between 30 and 40 hours a week,” Augustine said, adding that the regulation likely will change the over- time operators offer workers.

Operators are already seeing changes in the way they operate due to regulatory changes to the hours-of-service requirements. “We’re seeing that continual degradation of a full meal to the drivers,” Alsaker said, adding that he estimates drivers eat one and a quarter full-service meals a day on average. “Otherwise they’re eating from a fast-food place.”

Goetz is seeing a shift in when professional drivers stop, with more coming in during the early evening hours. “In the past 10:00 or 11:00 at night was more typical,” he explained. “The challenge for all of us is that it is compressing our business rather than spreading it out over more hours. Your sit-down restaurant is busier at 4:30-6:30 p.m. It challenges your facilities and your team players.”

Goetz said learning how to navigate the changes hours of service has brought is a “work in progress.”

Government regulation also carries over into food labeling, handling and sanitation requirements, which will affect operators, Goetz said. “They’re going to be more active and I’m sure we’re going to see some changes,” he added.

Monitoring Alternative Fuels
Operators responding to NATSO’s survey said alternative fuels, particularly natural gas, may present either a challenge or an opportunity.

Quinn said Sapp Bros. is looking to invest in alternative fuels and said tax incentives can spur development of the fueling infrastructure. “The capital requirements in order to make changes for those alternative fuels is something that is going to be a burden on operators,” he said, adding that a fueling station can cost $1 million or more.

Alsaker anticipates some significant inroads into alternative fuels, but expects they will still be a minor portion of the industry. “Gasoline and diesel will still be the prominent fuels because that is what our formula and infrastructure is,” he said. “We can develop fantastic engines to burn CNG and LNG, but getting the product from the producing industry to retail is extremely difficult.” 

This article originally ran in Stop Watch magazine. Stop Watch provides in-depth content to assist NATSO members in improving their travel plaza business operations. The magazine is mailed to NATSO members bimonthly. If you are a member and not receiving Stop Watch, submit a request to be added to the mailing list. Not a member? Join today or submit a request to receive additional information.