A New Day About to Dawn in Expediting?

[ATeam]

In another thread, tallcal101 posted something that got lost in the mix. His point is important so I took the liberty of copying and pasting his post here, and to inject some questions to prompt discussion. Tallcal101 said,

"As most of you know,many van lines have gotten into expedting.But up until now,no MAJOR van lines have made the leap.Clark and Reed,Arpin and a few others have small,non household goods expediting divisions.Not much penetration in the market.
Well,that may change soon.Without mentioning names,one of the largest vanline holding companies(over 1 billion is sales per year,two van line operations)is making a serious proposal to their board to jump in.
With over 500 agents nationwide this pose's a pretty serious threat. Another major player in the market.With a potential sales force of over 1000 sales people nationwide,and multiple agents in every market,a very serious threat.
It seems this industry has become the new sweetheart of the transportation industry.It has become increasingly clear that there will reach a saturation point if this explosive growth continues.It will drive price's into the cellar.Not sure what the answer is,but I would recommend that companies like Panther and FedEx take a long look down the road,and brace for market intrusion that will surely have a major impact on bottom lines.As a service industry,stressing on time deliveries,many of Leo's comments about teams being 100% service oriented,and making an impact on the customers is even that much more important.I think raising the standard from a heart beat and a CDL as the only qualifications needs to change,and change quickly.It may be up to us owners to make certain that we put the best product on the road,or we may all fall by the wayside to the new competition.It's about to become a new day.Lets not let them have their way."

Question 1. Is that not the story of expediting now? Most people agree that expedting originated with Roberts Express about 25 years ago. Since then, the market has grown and numerous companies have emerged (some have come and gone) and now compete for market share.

Question 2. Is it true that the money was better when Roberts was the only game in town? If so, can you demonstrate it with actual numbers and can you tell us exactly how much better the money was?

Question 3. Tallcal101 speaks of a market saturation point. Can the saturation point of the expedting market even be known at this point? If so, what is it and how will we know when it is reached?

Question 4. While conventional wisdom says the more units all companies put on the road will force expediting rates down, at least one major company (FedEx) is raising its rates. How do you explain the FedEx rate increase (tarriffs charged to customers) when the numer of competing expediting companies (and trucks on the road, I presume) is greater than ever?

 

[Paul56]

Those in the business who...

1) Find a niche market.

2) Continously and proactively seek new customers & markets (not simply through advertising).

3) Have a very well developed sense of customer service & satisfaction and actually DO what is necessary to ensure customers are happy.

...will survive.

At the risk of tooting our own horns, we do the above and more. The advantage, or perhaps disadvantage, in our situation is that as a company we either sink or swim by reaping the results of what we sew.

No matter how good your individual or team efforts are, those of you who have partnered with a company better hope that company is doing the right thing to ensure business continues & develops. Unfortunately, you don't have much control over this.

 

[Prarysun]

I started as a Roberts Express Driver in '97 thru '02. I never made under one dollar per mile, and one banner year I made 27k between mid Sept and Christmas. I thought I was rich! Things however slowly changed and it seemed as the cliche began, they had a van on every corner. By '02, my bottom line plummeted as did that of my driver in another van and we left. It seemed that the Fed Ex CC takeover, impacted us in a negative way at least at the beginning, much like the Fenway takeovers are impacting some of our bottom lines now. I understand growing pains and am hoping for the best, however noticing that at least in the van owner arena, many are unhappy. I urge P2 to take a look at their policies and practices and establish some firm SOP's before mutiny's start effecting their bottom line. I also understand that vans are a somewhat disposable commodity as opposed to straight trucks, semi's. And for every 3 that leave, 4 are at the door waiting to get in. But something must be said for longevity and familiarity with the company, and it's practices, customers, etc. Surely loyalty of good company owners/drivers contributes and should be recognized. If we are facing heavy competition, as stated above, well established, good solid drivers can only help keep the company alive and ticking rather than the revolving door. Some may remember the negative impact of vast exodus of trucks from FECC in '02? I do know it prompted them to sit up and take notice, and many changes for the better were made. And as stated above, ALL expedite co's need to take better notice of whom they are bringing into the company, I have stood in driver circles many times and while more times than not, most seemed neat and clean and had pride in their work, but clearly there are some drivers/owners who simply do not care how they represent themselves or their vehicles to our customers and I would be embarrassed to be seen in public with them. Some could benefit from a shower and deoderant etc etc. Perhaps more follow up calls to customers to get their opinions of the drivers conduct, and presentability, would help weed out those who give the co's a bad image?

 

[Chad]

Landstar System, Inc. made over 2 billion last year in sales. They have approximately a sales force of 1,000 and multiple agents just as described and they have had an expediting division for at least 15 years or more. I'm not sure if that is relevant to the original post but it has already happened.

 

[greg334]

Landstar has been getting to be more known but UPS ($42,581,000,000.00 revenue in 2005) and FedEx ($29,363,000,000.00 revenue in 2005) and they have the branding already in place. They could control a lot of the market if they want to get aggresive and with DHL ($56,518,000,000.00 of revenue in 2005) sitting on the side line with Deutsche Bank to fund any venture, it could get interesting.

But I want to return to something that I got some rather mean mail about a while ago, define expediting services? I mean please explain to me what it means? I still contend that this has always been around, beginning with the rail services to air services to courier services, all moving freight and items as fast as possible for a customer. I know that this is or could be part of a service portfolio for a company like FedEx who can take a package of ANY size and get it from one side of the country to the other side in less than a day.

I truly belive that there are changes to this segment but to define it is rather like defining a computer expert, too vast and open to a relative point of view.

Maybe I completely msundertstand the whole thing so I am inclined to think it don't matter to me as long as I get paid for the freight I move.

 

[x06col]

I'm certain that there have been players in this environment that we are not aware of. You really don't have to be and Expediter{sic} to have pulled someones fat outa the fire. Also there always will be new and better players with a better mouse trap. With regard to those that align themselves and are satisfied with the status quo should be somewhat concerned about their future, if, they keep their destiny in anothers hands. Paul the only thing I don't agree with is the part that contractors can't do much about it. Really they can either be part of the solution to success, or, part of the problem toward failure depending if they are committed or merely, involved. And, there seems to be an over abundance of involvement these days from the folks i've seen knocking on my door.

 

[Broompilot]

You may want to look at this as a positive and not a negative. Think rates can go any lower? I doubt it but maybee who knows. I am not gona worry myself about WHAT IFS. I do a great job for my company 200+ loads in 20 months, been late once traffic and weather combo.

What more could I do to make myself more in demand, I am clueless? I spend way to much compared to most on PMs run the truck in on the first hiccup, keep myself and the truck clean and orderly. Have all the (White Glove Equip), keep a positive attitude. Stay out more than three weeks at a time. What else could I be not doing or doing wrong?

Possibly I read this wrong, but between the lines it is saying straighten up or ship out or am I wrong?

Do as a good as job as you can, if the market changes so much that your efforts are not profitable than find another industry or change carreers. These big companies, with all the complaining of late seem to only care about stock holders and not us the back bone of the industry, how much poorer does the poorest guy gotta be?

 

[greg334]

Broom,
I agree with you but as you said;
"Possibly I read this wrong, but between the lines it is saying straighten up or ship out or am I wrong?" I feel this is about what a few has implied.

You know that you also hit the nail on the head when you said;

"Do as a good as job as you can, if the market changes so much that your efforts are not profitable than find another industry or change careers."

What I find with some drivers is that their attitude is really bad. They want every dime for every little thing (I could give a lot of examples watching other expediters) and return little to the customer outside of getting loaded and whipping out of the parking lot. I am not saying that we should not get paid for the work but rather look at what customer service is all about and strive for the level of service to give that you expect out of people when you are the customer. Sometimes it is about sitting there and waiting for the load. I had one run where the load was not even finished being machined and watched them do all the work, 5 hours or waiting. I didn't get upset or made but they worked all night and throughout the day to get this finished for their customer, whom I would deliver this item 24 hours later. they were happy I waited and when it was delivered I got a nice thank you and a free lunch.

Oh, yea one other thing; Now this also means that if you accept substandard customer service as the norm in your life, than it is difficult that you could understand what real customer service is all about. I am critical about customer service, maybe because I had to strive to be better to beat my competition.

Oh well, enough said.