I was waiting to discuss just how big I think today’s PR was and don’t understand why it was discounted because of a few pics. All the chatter about the web site and anything else to remove attention from the PR was an obvious attempt to distract attention from just how big this really was. Tytan established a 20-25 % increase in profit margins over its competition based on changes to shipping.
This was only the tip of the iceberg; the CEO said a lot of things in very few words. Unfortunately it fell on deaf ears because it was brief and today’s discussion lacked the substance and solid DD that I’m used to seeing on the board. People focused on minor details or flaws in the PR and missed the big picture. Here’s my take on the info we received today. They only other topic I didn’t cover was the shipping line which is best suited for another discussion.
Feel free to pick this apart so we can talk about how Mark is learning from his past experiences and planning for future growth or not if that’s how you feel.
1.Tytan was able to move port of debarkation to a location within one mile from what is stated as the permanent central distribution hub for North America.
2.Tractors will be shipped preassembled thus eliminating the cost of packing in China and un- packing/assembly at a distant location once on the ground in the US.
3.Once driven off the boat, driven off the boat; not lifted by crane in shipping containers and transported to a warehouse for storage and further preparation for the transport from Seattle.
4.Total elimination of transportation cost from Seattle.
5.Rail Head located at the port of Kalama. The mention of this being the major port from which most of the grain shipped from the Western half of the US is exported was intended to inform us that the railroad had easy access to anywhere in North America.
6.The proximity of the railhead being within one mile of the Tytan facility was intended to inform us that once unloaded the inventory could be transported to the facility or loaded directly on a railcar for immediate delivery to one of the hundreds for dealerships that will be selling Tytan tractors. I said will be, I’m sure it “will be” hundreds some day.
7.If tractors or parts needed to be shipped from the central facility again it is only a short drive to load the equipment on either the boat or train.
8.Customs located at the port means shorter time the cargo is held for processing and released to Tytan.
9.All of this means that orders will be received in a timelier manner reducing the need for dealers to carry excessive inventory. This reduces cost to the dealer by eliminating the need to tie up capital for long periods of time on parts and accessories. This” just in time” supply model makes Tytan more attractive from a dealer stand point for the reasons I mentioned above and probably the number one reason is with quicker turnover of inventory dealers require less square footage to store and display Tytan’s products. Less square footage means less money spent on leases.
10.All of this combined sets Tytan’s distribution system up to be one of the most efficient in the industry and I don’t think any of this happened by chance. This process was well thought out and way too coincidental for it to just happen. No one is that lucky IMO, Mark choose his current location well in advance of implementing his shipping and distribution plan. Well in advance, he knew what he was going to do years before it happened and I’m willing to bet that he is tens steps ahead of us or the competition in figuring his out his plan to ”begin Tytan’s raise to the top”. IMHO.
