My main question here is what do
>you all think of future for this business? Fuel costs, sur
>charges, competition, shift in economy and anything else..
>Thanks, Wayne
There will always be customers that have a need to move freight fast (expedite) and/or with special care (critical shipment, exclusive use trucks). In that respect, the business has a future. Just how those needs will be met and by what kind of companies, trucks, drivers and prices is an open question. Expediting is not the same today as it was 10, 15 and 20 years ago. It will not be the same 10, 15 and 20 years ahead.
In the short term, the economic slowdown and possible recession will wring out a number of expediters from the industry, putting downward pressure on the value of used trucks and expedite freight rates. The slowdown/recession will also reduce the amount of freight that is available to haul.
Expediting emerged in an era when just in time freight was all the rage. With fuel prices now being driven permenantly higher, due to increasing demand for fuel from emerging economies worldwide, warehousing may come back into vogue.
Information technology is more developed now than it was before JIT came into vogue. This time around, information technology could be used to better coordinate supply chains and reduce the need for expedited freight. Pup trailers and a company-owned fleet of day cabs may haul some of what passes for expedited freight now; not from dock to dock, but from one warehouse to smaller warehouses near the automotive manufacturer's factory (for example).
A bright spot in the expediting industry is in the high-end, value-added services like FedEx's White Glove Services and Panther's Elite Services. Those customers ship goods that are less sensitive to economic cycles and price competition. In that market, it is as much about quality as it is anything else. It is no big deal to comingle two skids of auto parts with other freight. But high-end customers are unwilling to comingle things like museum pieces or temperature controlled vaccine with other freight.
Another bright spot are the owner-operators hauling any kind of expedite freight that are debt free and have reliable equipment. They are positioned to survive slow times. They will be among those standing when the business cycle moves from slowdown and recession to recovery and accelerated growth.
What does that mean for someone like you who has business experience and the opportunity to purchase four used trucks? It means you have the opportunity to make the seller a very happy man.
