Change in fleet strategy fuels rapid growth for TEC Companies
While business prospects for the TEC Companies of Lake Elsinore, Calif., were trending upward a few years ago, the state of the organization’s fleet was trending in the other direction.
Operations manager Junior Pineda and owner Jose Aceituno had, in less than a decade, established one of the most highly regarded players in the Super 10 industry around Los Angeles. The TEC Companies they manage and their umbrella bidding firm, Chief Engineering, were known as reliable, value-focused contractors hauling dirt, concrete, asphalt, and aggregate for projects ranging from parking lots, highways, environmental remediation, heavy demolition, earth moving and a variety of civil projects.
But none of their trucks were company owned. And many of the owner-operators upon whom they depended could no longer afford to retrofit their equipment to meet California’s strict emissions standards.
“We lost 25 percent of our fleet,” says Pineda.
So in early 2014, Aceituno contacted Fernando Feroz, a well-regarded dump body builder from Corona, Calif., for some advice and spec direction.
“I told him he’s got the best built box on the market, and I want to run the best equipment on the market,” Aceituno says. “He sent me straight to Peterbilt.”
After some due diligence with dealer personnel reviewing options and the Peterbilt product line, Aceituno’s initial purchase was 10 Peterbilt Model 348s, spec’ed with PACCAR PX-9 Engines and Allison automatic transmissions.
“We started with 10,” says Pineda. “Fifty trucks later, we’re ready to move up to 75.”
Well before Pineda and Aceituno started building a company-owned fleet — indeed, now up to 50 trucks — focused on quality, they were running operations that focused on service and reliability.
“There’s one thing that’s important in this business,” says Pineda. “If a customer asks for 30 trucks on a job, you show up with 30 trucks. People have to know you’re reliable.
“That’s how we earn business. It’s based on the development of personal relationships that have their foundation in the quality of the work we do. We’ve never marketed, never advertised. We focus on the acquisition of clients, one by one.”
With such a business plan, Aceituno and Pineda had no objections when Feroz steered them to Peterbilt — and nowhere else.
“The Peterbilt brand means quality and class in this industry,” says Pineda. “A lot of trucks can give you decent performance, but the Peterbilt brand has helped us build our brand.
“It all starts with service,” he adds. “We don’t succeed because we’re the cheapest. We succeed because we provide the best service to the customer.”
While Pineda was aware that the role of Peterbilt equipment in building a brand was important, he was equally impressed with how Peterbilt improved his operational efficiency and ultimately, profitability. Peterbilt offers several vocational truck options, and he and Feroz dialed in on the Model 348 as the best fit.
“We liked that the 348 is smaller than the Class 8 alternatives, and the tight turning radius is especially important in the work we do,” he says. “We spec’ed it with a lighter, tougher box and we net almost 19 tons.
“We’re looking to save weight — we’re not trying to win any races out there with bigger horsepower.
The Model 348 really helped us maximize our payload.”
Pineda reports that their final Model 348 configuration saved about 1,200 lbs vs. other options they may have considered.
“Multiply that times 50 trucks, and those trucks each doing five or six rounds in a day,” he says. “That adds up fast. We’re simply carrying more material than our competition is.”
Greater operational efficiency allows the TEC Companies to return value to their client in other ways. For example, most jobs will have an on-site operations coordinator.
“It’s important to have on-site guidance,” Pineda says. “Let’s say you lose 3 or 4 minutes per truck per day because there isn’t on-site guidance, helping direct traffic and ensure efficiency. Multiply that times 20 or 30 trucks and you’ve lost an hour or more per day.”
It’s that kind of math that Pineda and Aceituno like to present clients in the bidding process. Their per-hour price may not be the lowest, but their quality and operational efficiency more than make up the difference.
“If we cost $10 or $15 per hour more than a competitor, our efficiency will save more than that for our customer,” he says. “That’s what we sell our customer and if they’re receptive to that way of thinking, that’s a customer we’ll succeed with. They’ll learn they can rely on us.”
Another group learning they can rely on the TEC Companies are many of the former owner/operators who were pushed out of business. Several have landed jobs driving the TEC Companies’ new Peterbilts.
“We’ve had zero turnover since we bought these new Peterbilts,” Aceituno says. “All our original employees are still here. We have new Peterbilt equipment, offer competitive pay and we treat our people right. That’s the reason they stay here.”