Tenneseahawk said, "All I'm saying is that if the money is in specialized freight, that's where Tom, Dik, and Harry will invest. Soon, like what has happened in expediting in general, the specialized area of expediting will see an overflow in both companies that will get into the field, and trucks used to haul the stuff. It happens in every area of business. Ppl go where the money is. Those who got into it early are lucky, as they're making the money now. But the belt will eventually tighten on them as well.
One other thing. You'd think Dr.Phil would've learned that bragging about where he found the nugget would bring a lot more miners."
You are not wrong, Tenneseahawk, but you are not entirely right either. There is more to the picture than the market and one truck's place in it. I am optimistic about the future and confident in the value-added aspect of our business plan because Diane and I are not in business alone. We have a contractual relationship with FedEx Custom Critical in which FedEx does a lot for us and we for them.
One of the things FedEx has done for its drivers for many years is develop new markets. Expediting itself was invented by FedEx's predecessor company, Roberts Express. As competitors emerge and price competition develops (as you correctly observes), FedEx has distinguished itself from all other expediting carriers by developing new and lucrative markets.
FedEx developed White Glove. FedEx developed expedited reefer freight. FedEx developed Temperature validated freight. FedEx developed a niche for itself in the museum art market. FedEx expanded into high-value car transport with the purchase of Pasport Transport (yet another specialized-truck, value added business model).
My confidence in the future is based partly in my confidence in FedEx. Before expediting was invented a chorus of nay-sayers could have been stirred up to pooh-pooh the concept. Fred Smith, the founder of FedEx once wrote a college paper about how overnight letter delivery could happen. His business school professor pooh-poohed the idea saying it would never work.
Ideas that seem strange today sometimes turn out to be big money makers tomorrow. FedEx is not today trying to figure out how to get more NLM freight. Visionary and intelligent people in Custom Critical are thinking instead about how to turn $2.00 a mile freight into $3.00 a mile freight.
Because we have confidence in our carrier's ability to develop new and lucrative markets after the bottom feeders have moved in to previously-developed markets, we have confidence in our future as well.
That's why we were happy to spec our truck for White Glove service. It's a business relationship. We do a lot for FedEx (provide a specialized truck and qualified drivers). They do a lot for us (develop customers that will use that truck to ship freight, plus all the other stuff like permits, dispatch, etc.).
In other words, we have hitched our wagon to a star, and the star is FedEx Custom Critical. But if FedEx Custom Critcial were to evaporate off the map tomorrow, the need for specialized trucks would still exist and we would simply find another carrier or get our own authority to continue on.
Another item that supports our optimism is more personal. Long before our truck has lived out its useful life, it will be paid for and we will be once again debt free. The future tough times that frighten some people do not frighten us at all. We're prepared to haul freight if it is there and to sit if it is not.
Heck, if times got really slow, and loads only come once every week or two; with our truck configured as it is, we could live in it for an extended period of time while working day-labor jobs between loads.
If things got that bad, we'd have no trouble meeting expenses and continuing to add to our net worth. That would be partly due to the kind of day labor we'd do. Diane is an RN and attorney. I have computer and sales skills. The day jobs we'd get would not be corner-office positions but they would pay well above minimum wage.
If things worked out even worse than that, it might go that we'd deliver an $0.80 per mile load in the morning, find a place to park that day, contact day labor companies that afternoon, and work in that town as we waited for the next cheap-freight load; Diane emptying bed pans at a hospital and me doing data-entry by night and pitching meatballs in a grocery store aisle by day. At the end of the week, we'd still be able to put a penny or two in the piggy bank.
If the doomsday predictions come true and only those who can haul cheap freight will survive, our simple lifestyle, debt-free status, ability to live long-term in our truck, and skills beyond truck driving will leave us standing as fierce competitors. Unless they operate at a loss, no one will be able to run freight cheaper than us and add to their savings too.
The good news, we believe, is we won't have to compete for freight on the basis of price alone. We'll leave the frozen fish and dash board knobs to others as we provide added value to our carrier that will continue to develop new and lucrative markets for us and our truck.
As for keeping the source of the nugget secret, I disagree. The more people know about the White Glove and Elite Services opportunity, the more people will seek to come in (as you correctly observe). The more people come in, the more selective recuriters can be. The more selective recruiters can be, the more competitive drivers will have to be to make the White Glove or Elite Services grade. The better drivers become, the better our customers will be served. The better our customers are served, the more likely it is they will use our carrier next time or return to it after trying another. The more customers return to our carrier, the more business there will be.
We are not talking about a mine in the ground where there is a finite quantity of gold and an infinite number of people who can swarm in with nothing more than a shovel. We're talking about markets that can be invented, expanded, niched in to, acquired and even abandoned (like to NLM) in favor of more lucrative endeavors.
My take on the future is no better than anyone elses. The above analysis could be entirely wrong. If so, please stop by my booth at the grocery store and try a meatball. You'll find me happy to be there too and praising my empolyer.
