Spending is estimated to advance another 7.1% in 2018 and will expand to $1.7 trillion total by 2022.
As part of LCT's ongoing Q&As with leading industry operators, Linda Moore talks with the owner of MTC Limousine & Corporate Coach, Inc., headquartered in Westchester County, NY.
LCT: Tell us about MTC
Trevor Franklin: MTC is one of the larger ground transportation companies in the New York metropolitan area. We have offices in New York, New Jersey, and Connecticut and are running about 135 vehicles, including company owned vans, shuttles, mini-coaches, and motorcoaches. All reservations, dispatching, and accounting are consolidated in our headquarters location, sales and marketing are managed out of Connecticut. Our business is 95% corporate and meeting/event logistics.
LCT: You are taking going green to an extreme. Can you expand on some of things you are doing?
Trevor Franklin: It is probably more of a question of what we are not doing! We have put an environmental management plan in place. And, as part of our process, MTC is working with the EPA Climate Leaders partnership and have also become the first ground transportation company to join the Climate Registry. With Climate Leaders, MTC is the first ground transportation company to develop a base year inventory and Inventory Management Plan. I assume that we will be the first to officially set our emission reduction goals when they are announced in September. Over the year, we have quantified what we do, how we do it, and how we can make our business less damaging to the environment. We are quite proud of what we've done. Now, there are probably 20 ground transportation companies in Climate Leaders and they are in because we fought hard to get in. Initially, they didn't want to let us in because we were not big enough. But, a number of our clients are not only BIG enough to be Climate Leaders, but they thought it was important for us to be a part of the organization, so they put some pressure on the powers that be and now all it takes is an application. Which is a good thing. I have always said that environmental sustainability is not just an "MTC thing," the entire industry needs to get involved and we are happy to be the ones pushing the agenda. Today, 25% of the MTC fleet is alternatively fueled or hybrid powered and we have committed to reduce our emissions by more than 40% in five years.
LCT: What made you make such bold moves? This is a big investment in time and capital purchases.
Trevor Franklin: It is. But in 2006, we got a call from a client who wanted to know how many miles each job involved, what types of vehicles were used, and how much gasoline was used for each ride. When we dug into it, we found out that they were beginning to report their supply chain emissions as part of their overall environmental program. It was a wakeup call for us and we knew that sustainability was starting to go mainstream and we made a commitment to being on the forefront of change. Lots of folks think it is costly-man hours; vehicles are just as expensive. When you trade off the new business you get because you are involved in a program like this, it balances off. Put aside the fact that it is "the right thing to do." If it didn't make economic sense I wouldn't be doing any of it. Marketing it makes sense, of course, but we have structured a program that is forcing us to look at what we do and how we do it. Today, 25% of the MTC fleet is alternatively fueled or hybrid powered. We have modified our traditional vehicles with aftermarket improvements. We are using 100% biodegradable cleaning products and oil and air filters that allow all our vehicles to get every possible mpg out of the equipment. Forget about the recycling program in our office, automated lights in every office, and energy efficient appliances. We have opened a new location so that are vehicles are closer to our larger accounts, cutting down actual mileage to/from pick-ups. Our administrative staff and managers work from home a couple of days a week, and our reservationists are, in large part, virtual and are located throughout the U.S. "Green" has led us to be more efficient and smarter about how we do things. Overhead is lower, profitability is improved. It has been more than worth our initial investments or the expenses required to maintain our programs.
LCT: Have you put this on the back burner for now?
Trevor Franklin: Not at all. We are taking it to the next levels as a matter of fact. In conjunction with LEAP, we are releasing a web based emissiontracking/reporting program for corporate clients that will allow companies to measure against all of their ground transportation providers. We will be rolling out the product to the corporate travel buyers at NBTA in San Diego later this month.
LCT: Why did you go this route?
Trevor Franklin: Clients. They started us down this road and they still want it. We are doing some innovative things because they want it. Our automated ride sharing program provides for ride-sharing at the time of booking. It is driven by corporate policy and suggests, or requires, that ride-sharing opportunities are taken and everything is done before it ever hits dispatch. It is revolutionizing the acceptance of ride-sharing because it is no longer something that we are doing after the fact. Now, as part of the booking process, sharing rides isn't something we are forcing down their throats. When a passenger sees that the company will save 50% of the cost of a ride . . . well, in this environment, not too many people are saying "no" especially since the lost savings are reported back to their management. One of our clients has set the program up so that VIPs don't have to share a ride, but if anyone else declines, they must provide a reason. Automated email confirmations split the cost of the ride down the middle. From and environmental perspective, the system calculates the carbon emissions by passenger, by mile traveled. If and when cap and trade ever comes in play (which I believe it will) this will become increasingly valuable information for companies to have. Although health care has taken the front seat in Congress at the minute, I am fairly confident that you will see the environment as the next legislative action. Too much is riding on the "new green economy" for it not to happen.
LCT: Are you doing any other sustainability initiatives within MTC?
Trevor Franklin: We are. Clean Vehicle Solutions is waiting for approval for a grant for the conversion of more than 500 vehicles to CNG. MTC has committed to buying 50 CNG town cars, vans and shuttles over the next two years.
LCT: Are you concerned about the lack of filling stations for these vehicles?
Trevor Franklin: We are in a market where there is adequate fueling for the vehicles we have now. As part of the grant application, there is a commitment to build eight or nine more stations in the NY metro area. Of course, there are challenges, but the cost efficiencies and emission reductions are worth the training and extra effort required. There are millions and millions of CNG vehicles on the road around the world. I don't think that we can ignore its potential for fleet operations in the U.S. anymore. AT&T has already committed to move its fleet to CNG and others will follow suit. Demand hasn't warranted more stations until now. I believe it will in time and it will not be an issue.
LCT: How are you fairing during the current economy?
Trevor Franklin: Early on it was extremely difficult. People were down 20% and they were actually happy. I know folks in the industry who are down 50%. Our rides per day is down year to date 28%, but we are profitable and we continue to see a lot of opportunities out there. It is going to be a tough time for a little bit. I have a management team that is second to none and they know what the situation is and they manage based on the real numbers and the realities we are facing. We have cut hours. We have trimmed the fleet but we have not cut people. Our virtual reservationist program has helped us cut our overhead. We have refinanced our fleet and to take advantage of some of the lower rates. We have not had to tap into any of our credit lines for anything. I think companies should look at their infrastructure. They need to be confident that they are positioned to be the last man standing. I think that there will still be some consolidation in the industry. We are exploring some acquisitions.
LCT: What would you tell other operators who want to make the leap into going green and sustainability initiatives?
Trevor Franklin: Advice if operators want to do this? That is hard to answer. We were fortunate to have a client that is one of the most environmentally concerned companies in the world. I think my advice would be to not wait for Congress to force the issue and then try to play catch-up. Environmental management is no longer as hard as it was for us -- there are now established solutions. I think that companies should talk to a company like LEAP to help establish your plan and get moving in the right direction. My best advice is to make sure that if you decide to talk green, you better be walking green. Many companies say they are green but they are not green if they just have a hybrid in their fleet. You need to identify, measure, verify, and then actually reduce your emissions. I don't say that MTC is more sustainable. The Climate Registry and Climate Leaders and independent verifiers tell me that I am sustainable.
LCT: You have a large group management division. What trends are you seeing in group bookings?
Trevor Franklin: The two primary changes we have seen this past year are that groups are staying local and the the lead time has shortened. Like everything else, things are starting to get better and we are starting to see the lead times starting to increase and we do have bookings into next year. It's funny -- staying at home for a sales meeting in New York is probably not cheaper than other places, but the perception is better and perception seems to be the driving force in today's market.
-- Linda Moore, LCT East Coast Editor
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