FlamMan Posted December 3, 2014 Share Posted December 3, 2014 Most corps would be much better off paying down debt and otherwise shoring up their balance sheets than reducing tour fees or splurging on new equipment. It's not the nice option (cut tour fees) or the sexy option (new stuff), but its the smart option. Exactly. Quote Link to comment Share on other sites More sharing options...
Jeff Ream Posted December 3, 2014 Share Posted December 3, 2014 Ahh, finally, the meat of what I was hoping the thread would produce. I don't particularly care whether anyone agrees with the report I quoted (I, personally, absolutely agree with every word of it), I'd like to know what will happen if it's right. From save some corps to help others buy unis... What could each corps do with a windfall such as that? (Don't forget, many smaller corps don't travel the number of miles in the example, so the dollar savings would be less while no less important.) Sorry Lincoln, I've come to trust the sources I read because I've been weeding out crap for 30 years. So, yes, I believe we're going to see SIGNIFICANT reductions in tour fuel costs over the next several years and, well, for many, many more. So, I'm personally convinced it bears discussion. Corps are about to get a pay raise for touring. What impact might those numbers have on the activity? Each corps? I think how the money is used will vary corps by corps. Some will reinvest the savings into upgrading equipment or paying off debt. Some will of course add more toys Quote Link to comment Share on other sites More sharing options...
cixelsyd Posted December 3, 2014 Share Posted December 3, 2014 I truly hope you see that having our own source insulates us to a great degree from those spikes. But let's keep this pertinent and on topic. Humor us and play along. Corps may have a windfall in tour fuel costs like not seen since 2008 or before. What's the impact? If corps directors set budgets based more on 2014 fuel prices rather than future forecasts, then the price drop really would be a windfall. It is then easier for the director to take that windfall and quietly apply it to debt reduction/elimination before anyone else gets the idea to spend it on more props/lighting/jetpacks. Quote Link to comment Share on other sites More sharing options...
Daave Posted December 3, 2014 Share Posted December 3, 2014 I recall discussion here in the last several years that indicated many corps had gone to lease contracts with carrier companies and those leases included the buses, drivers, fuel, etc written into the contracts. If this is the case, the lease company would benefit from the fuel savings if there was no language in the contract regarding fuel, would they not? I would imagine that the lease would be a flat fee for a service for a period of time and would not be broken down to take money off the contract if prices drop. Corps would then only save money on whatever rolling stock they controlled to pull equipment trucks food trucks, etc. A savings for sure, but potentially not as much. Yeah... Insomnia sucks. Quote Link to comment Share on other sites More sharing options...
xandandl Posted December 3, 2014 Share Posted December 3, 2014 two corps about whom I am aware of a little something about their current leases has it written this way: gas is included in lease presuming a cost per gallon of X; if cost per gallon increases beyond X per gallon, the corps pays the difference. for one corps, that payment is due at re-fill of busses, not at end of season. Leases are always written so bus companies don't lose. Quote Link to comment Share on other sites More sharing options...
chaddyt Posted December 3, 2014 Share Posted December 3, 2014 Just saw on NBC News that some US energy folks feel that OPEC might be low balling the price to try to drive some US producers out of the market. And after that they will have more power. IOW - enjoy it while you can. J D Rockefeller would be proud as that was one of his early tricks in the oil game...... PS - PA governor who is a real buddy to the fracking industry lost his election (first gov in decades not to be re-elected) so things might change in one of the big fracking states. I don't know that Wolf has any plans to limit or halt fracking here in PA (I don't know that he has many plans, period), but I'm sure he'll be taxing the ever-loving **** out of it. Quote Link to comment Share on other sites More sharing options...
garfield Posted December 3, 2014 Author Share Posted December 3, 2014 two corps about whom I am aware of a little something about their current leases has it written this way: gas is included in lease presuming a cost per gallon of X; if cost per gallon increases beyond X per gallon, the corps pays the difference. for one corps, that payment is due at re-fill of busses, not at end of season. Leases are always written so bus companies don't lose. The one who gains is the one taking the risk. If corps lay the fuel risk on the carrier, the carrier gets the benefit if there is one. Dry leases, where the carrier has no fuel risk, are just a common but they take someone with the knowledge to understand the price dynamics and the guts to take the risk. If the corps takes the risk on fuel then the corps gets the benefit of declining prices. Quote Link to comment Share on other sites More sharing options...
BradF Posted December 3, 2014 Share Posted December 3, 2014 A typical corps drives three buses (average 5 mpg diesel), two 18-wheelers (average about 7mpg diesel), an advance vehicle (a van of sorts, est. 15/mpg gas), and a staff RV (est. 10mpg gas or diesel). An average tour is about 30,000 per summer for total of over 210,000 road miles. Your estimate of mileage is off by nearly a factor of three. A long drum corps tour these days is typically between 11,000 and 13,000 miles. Many corps operate less than 10,000 miles during the summer. Quote Link to comment Share on other sites More sharing options...
JimF-LowBari Posted December 3, 2014 Share Posted December 3, 2014 (edited) The one who gains is the one taking the risk. If corps lay the fuel risk on the carrier, the carrier gets the benefit if there is one. Dry leases, where the carrier has no fuel risk, are just a common but they take someone with the knowledge to understand the price dynamics and the guts to take the risk. If the corps takes the risk on fuel then the corps gets the benefit of declining prices. Does a corps have a choice? Thinking if a carrier takes a risk like this might not be in business too long. Our fuel oil guy has a program like this (buy in bulk at current price in advance) but the understanding is this fuel is in storage somewhere so he is not risking losing money on the deal. From my understanding he does it to build up some cash before the heating season kicks and/or have the cash to start loading up fuel oil. Edited December 3, 2014 by JimF-LowBari Quote Link to comment Share on other sites More sharing options...
xandandl Posted December 3, 2014 Share Posted December 3, 2014 Your estimate of mileage is off by nearly a factor of three. A long drum corps tour these days is typically between 11,000 and 13,000 miles. Many corps operate less than 10,000 miles during the summer. Based on this poster's position in his corps, I trust his word on this subject. However, his corps tends to take a very timid tour up and down the Mississippi with not so many variations or wanderings compared to other finalist corps. I believe the "timidity" is actually a strategic business plan working for the corps thus far. Quote Link to comment Share on other sites More sharing options...
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