Express 1 purchase air frieght company???

charlee · Feb 7, 2008

Did I miss the announcement? I just heard that Express 1 purchased a new air freight company and spent a bunch of money on it. Is this true? Has anyone heard this? I know they have been competing in the marketplace on price, how does this help them, expecially after thier 4th quarter earnings release that show a very strong 4th quarter loss?

I have been watching them but I think I will stop now. I called them to check thier rates and got a bunch of wierd responses. They have rates for this and rates for that....what is the rate? Interesting.

Charlee

Jefferson3000 · Feb 7, 2008

Yup. They bought Concert Group Logistics. CGL's main office is on the Chicago O'Haire area, but they have offices in Cleveland and other places. I believe they even have one in Canada. I'm not too surprised, especially after Panther bought Integres last year. It seems that they all want a logistics company in their corner. All part of being a "One Stop Shop."

Of course, LEAM AND Nations have had a presence in both areas for some time.

riverrat · Feb 7, 2008

so far all I have seen nothing good about a all in one shop "logistics"= lower rates an I mean WAY lower rate to the trucks and less freight for the expediter. people are forgetting what expediting is suppose to be and are looking at rates only if a logistics can throw it on a ltl carrier and save a few bucks so be it if they can find a guy that bought a penske rental truck for five grand they do it I know one guy that hauls freight in a 85 ford pickup.
there is some light at the end of the tunnel as I am starting to see that the customers we all rely on are not happy campers they are still paying for premium service and with all the outsourcing their freight is not getting the care they are paying for I hear more and more of freight not arriving on time, arriving damaged ect. I think the customers are starting to get upset about it and are more and more demanding that they get the service they paid for and are finding that the "logistics" companies only care about maximizing their profits any way they can thru volume and cheap rates to the trucks. Hopefully these expediting companies will wake up to the fact that when they constantly outsource their customers freight they are also outsourcing their good name and every time a load gets screwed up it isn't the truck with xyz logisitcs spray painted on the side that the customer blames for the mess but the company that they contacted to take care of their freight.,which means that that customer is going to go looking for a expediting company that WILL take care of their needs. It is hard to find a good customer and a lot of work and dedication to keep that customer all it takes is a load or two that falls apart and you have lost that customer and possibly several others from the bad word of mouth that the former customer is bound to share with associated business pardners.

davekc · Feb 7, 2008

There rates use to be $1.20 a mile for a straight. I heard several months ago they dropped it to $1.12.?
That would be a tough number to operate at if it is accurate.
I have no trucks there so this isn't first hand information.
Maybe someone from there could indicate their rate and what the rate is when someone signs on. Might be beneficial for one looking at them.
As for vans I wouldn't have a clue what they do.
I do know they have been aggressively seeking business from their competitors but I believe they struggle as evident by the numbers because they can't provide the required coverage that many customers expect.

dhalltoyo · Feb 7, 2008

Looks like 70-80 cpm is the major compensation range for cargo vans at Express 1.

http://www.express-1.com/Library/VP_Compensation.pdf

Jefferson3000 · Feb 7, 2008

riverrat said:
so far all I have seen nothing good about a all in one shop "logistics"= lower rates an I mean WAY lower rate to the trucks and less freight for the expediter. people are forgetting what expediting is suppose to be and are looking at rates only if a logistics can throw it on a ltl carrier and save a few bucks so be it if they can find a guy that bought a penske rental truck for five grand they do it I know one guy that hauls freight in a 85 ford pickup.
.

Ok. First off, CGL is a very different entity than Express-1. Expedite is still expedite. You could conjecture that the buyout will mean that Express I customers are going to be introduced to things that will take away from their expedite division. But what about the other side? Concert Group customers will now be introduced to Express-1. I really don't see it to be a losing proposition.

Jefferson3000 · Feb 7, 2008

If Express-1 begins to fail in their expedite business, it won't necessarily be because of CGL. If their rates are dropping in an attempt to gain market share, it is because they must answer to shareholders who are demanding that their investment be met with substantial profits. That's the downside of being a public company.

I never sell lower rates. I always sell higher service.

maybe_driving · Feb 7, 2008

majors are 1.12 and the rest are 1.20 plus fuel for a STruck

E1Lori · Feb 7, 2008

Express-1 has purchased Concert Group Logistics. CGL provides transportation logistics services on a global basis through a network of transportation professionals who own and operate their own businesses under the Concert Group Logistics umbrella. They serve a different customer base than Express-1 as the press release indicated. CGL has been a strongly profitable company and in combination with Express-1 will help form a company ready to thrive in all types of freight markets. The 20 plus CGL agents will serve as additional salesman for Express-1 and also offer strategic cross-dock locations throughout the country. Express-1 has not released 4th quarter earning results so the "strong 4th quarter loss" statement is false and misleading. There is not an expediter in the country at this time that is not competing on rate as we are in the middle of a freight recession. The press release also indicated that Express-1 paid an industry standard multiple for CGL. This acquisition makes an already strong company stronger and introduces Express-1 to new customers.

davekc · Feb 7, 2008

I wonder if the "majors" at a 1.12 are the majority of their runs?
That would certainly be a deal breaker for me.

greg334 · Feb 7, 2008

Opps! I thought yous were talking about the stock price there, it is down and on the down slide as I type.

Well am I missing something here? will the average contractor see an increase in opportunities (and/or revenue) or is this just a wash for them due to the company trying to hedge any losses because of a declining market?

I don't see the opportunities, unless someone can explain it really matters.

groinster · Feb 7, 2008

My wife and I drove for Express-1 for 7 months in 2006. Their rates were and I heard that they haven't changed them, 1.12 for majors and 1.2 for a few loads. 99% of our loads paid 1.12. In 7 months we had two loads that paid 1.2. We lost a lot of money working for them because their customers were so far away from eachother. We have been with Panther ever since, including the last 7 months in Elite Services.

Jefferson3000 · Feb 7, 2008

Yeah, 1.12 would be a dealbreaker for me as well. It just means that any GOOD expediter who can get on with another carrier will, and E-1 will just have the scraps to serve their customers. It's too bad.

davekc · Feb 7, 2008

Thanks Lori for the details on their logistics buy.

dhalltoyo · Feb 8, 2008

I believe that Express 1 also only pays a flat-rate fixed FSC.
Moreover, that rate is only on the loaded miles.
Considering the fluctuating prices of fuel it would only seem prudent for any company to compensate an O/O with a FSC based upon the weekly government averages as they would apply to the contractual agreement with the shipper. Needless to say, not every shipper would contract for 15 cpm (Example). Quite possibly the major accounts would negotiate lower FSC's, but one-time shippers pay markedly higher rates. Most carriers pass along that increase to the O/O.

Major account rates coupled with fixed FSC's...I don't see how anyone could purchase decent equipment to meet their requirements and then make the payments.

OntarioVanMan · Feb 8, 2008

David...Yes the FSC is NOT fixed more flat rate but changes every Tuesday.....

Last trip was in Indy...Logistics warehouse serves 5 different customers...networked across the country...our salesperson was in there...co-ordinating loads for them and designating expedite loads...says he gets about 10-12 loads a day out of them...thats how this arrangement works with logistices and frieght forwarding...

E-1 is much better with Sprinters We get far more Sprinter loads the CV's and at a buck a mlle...Why drive a D for .12 cents more??

groinster · Feb 8, 2008

I forgot about the FSC. YES, they do give a fixed-rate FSC. They claim it is based upon the current fuel price. But you have to wonder....who is keeping the rest. You know darn well that Express-1 is charging their customers way more FSC than they are paying their drivers. We couldn't make ends-meat with them. I always give the advice that if you have a pension, Express-1 is for you. If you require and depend on your check....find another carrier.

maybe_driving · Feb 8, 2008

what is it express-1's week to be kicked lol

I did 2093 loaded miles and 327 MT miles grossed 2827.10 with FSC. Thats is about 16% Dead head?? and avg. 1.16 for all miles. Not the very best but good for a solo in the slow time of year

OntarioVanMan · Feb 8, 2008

maybe_driving said:
what is it express-1's week to be kicked lol

I did 2093 loaded miles and 327 MT miles grossed 2827.10 with FSC. Thats is about 16% Dead head?? and avg. 1.16 for all miles. Not the very best but good for a solo in the slow time of year

Hey everyone gets a turn in the barrel!! *LOL*

At a buck 12 and straights getting about .26 FSC they'd really have to watch the DH...I find them generous with us Sprinters in that dept....paying for DH that is. any where from 20-40 cents a mile.