Looking to start an expediting company and need help!

[paullud]

OK now you have given the information needed, it all boils down to money not drive and ingenuity. You can have all the drive and ingenuity in the world but the inability to fund a project brings it to a screeching halt. I wasn't joking or trying to be rude when I was talking about millions of dollars to get a company started. There is a tremendous amount of cash needed to get even a small company going but if you really want to start a company any person giving good advice is going to tell you that you need to drive for a company first. If you are just interested in investing in the transportation industry then I would recommend that you invest in a company like JB Hunt (JBHT) in September. The 52 week low was less than $35/share and just got to about $55, your $100k could've made you over $50k in 6 months. People are giving you good advice when they say you are going about this the wrong way, I know it may not be what you want to hear but it is very sound advice. The amount of money you have is not enough to get a transportation company going but it could be wisely invested and still make you rich without all the headaches. This industry is HEAVILY regulated and making a mistake could mean you get off easy and just get fined into bankruptcy but there is also a good chance you will end up bankrupt and in prison simply because you didn't follow some pointless paperwork or your drivers did something wrong. The best chance for making a lot of money in this industry is by dumping cash in from the outside. Save your drive for selling cars and then sit back and watch your money work hard for you.

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[davekc]

These folks are trying to help you. It has nothing to do with the "American dream".
I would be careful confusing a perceived negativity on your part with reality.

 

[ATeam]

We're both hard workers and trying to move up and forward in life and if no one here has any advice because they don't know or don't beleive in American drive and ingenuity please don't post here but any good advice that help us would be much appreciated!

I think if you look closely, you will find that everyone or nearly everyone who replied to your inquiry believes in American drive and ingenuity. Indeed, most if not all who responded are entrepreneurs in their own right. As such, they, like you, are not ones to take no for an answer. But in this case, they happen to be the ones with experience and insights into the expediting industry. Don't take what they are saying personally. Consider their points.

Do you have enough capital? From where will you get the freight? Etc. You have no experience in this business, which is fine because many of the above posters had no experience when they started either. Everyone has to start someplace. But before you start, the points made above should be embraced, not resisted. You asked for advice and received it. What else are you looking for in this forum?

 

[LDB]

Did you read my reply? It was meant to be helpful.

 

[Rocketman]

I am interested in starting an expediting company in which I would hire drivers and manage the dispatchers as well as possibly dispatch myself until I get established.

This part of your original post is what through up the flags. You have plenty of capitol to "get started" in the business. You have no where near enough capitol to jump in at the level you describe in the statement quoted above.

Most members of this forum, including myself, would be happy to have the resources you have accumulated in a short period of time. Congratulations!

Also, most members of this forum have never attempted to do what you are contemplating. There are a few who have and a few who have been successful. I will not name them as it's not my place to volunteer their mentorship. I would suggest that you seek out the 2 or 3 people who have successfully started an actual expedite company. They are their own carrier. Most of them started out driving for themselves with their own authority, finding loads, hauling freight by themselves.

It takes a lot of work. It will consume you every hour of every day. You will be responsible for your own marketing, collecting ( a HUGE problem these days), book keeeping, compliance and all the other things that go along with running a trucking company. A trucking company IS what your proposing. Just because it's called expedite doesn't get you around one single regulation.

Be prepared to live on a lot less than your accustomed to for the next several years if you decide to go this route. You do have a lot of cash saved up, but it's not that much when you jump into this kind of business. You have enough money to get started, but you will be a very small fish in a very large pond and the only way to get past that is sacrifice and a lot of it.

Personally, if I were in your shoes. I would be looking at opportunities with a lot more potential for profit margins. The margins in this industry are not a little but tight, they are really, really tight. Coupled with the regulations and the liabilities of owning even one truck much less multiple trucks, it's just not the business I would sink that kind of savings into...unless you just want to be a truck driver. That's what most of us do. We just enjoy the job. We are NOT here to get rich.

I personally would take that money and get it invested in the markets. If I wanted to learn something new..and had the resources you have...I would learn the markets. If you put the same amount of time and energy into learning how to manage your money in the markets you will make a lot more money, with less risk and a whole lot less headaches than you will ever make in trucking. AND, in the meantime, you will not be distracted from what your doing now that has generated the income and savings you are currently generating. Don't fix it if it ain't broke!

You've asked for advice. You probably haven't gotten the advice you were looking for. If you would prefer, we could paint you a pretty picture and tell you a lot of lies?

 

[blizzard2014]

Plus, IMHO, using a screen name like "shipit" has a "Website" idea that one thinks will bring them lots of money in the Expediting Industry from sitting behind a computer all day.

Trust Me, I have seen hundreds just like this over the years. People think they can get into Hotshotting, LTL Freight Hauling, Auto Hauling, the 3PL Freight Industry, and "Trucking" Venues just by sitting behind a computer all day.

As Moose said.......Don't Do It. You'll get nowhere.

Come on now Brisco. There are some really intelligent start-ups out there. Can I have you do a little test for me. Just type the words air freight into googoe and tell me the name of the first company that pops up on the page. Then type in ground expedite and tell me the third website that pops up and they are all owned by the same guy. The first one is airfreight.com and the second one is groundexpedite.com. They pop up first - not even panther or fedex pop up within the first three hits when you type in air freight or ground expedit in the google search engine and they are milti-million dollar companies. You tell me that the owner of thwose two domain names is not one intelligent guy!

Opening up an expedite company can be done - it is being done each and every day of the year. In fact one of the most recognized members of the Alliance is a company that has only been in business little over a year and they are doing just fine. The problem is building up a reputation in the industry. Knowing how to set up a company and where the different load boards are is one thing but actually building a reputation with other carriers and brokers is the hard part. There are some customers that I have been bidding on their freight for 5 months straight and getting the same message "bid not awarded" who are now awarding me loads and trusting my company to move their freight.

It's not as simple as creating a website and getting a few drivers together - there is a lot that goes into the development of a company. The people on here who say it can't be done are just the "employee mentality" types. It's not easy, and sometimes I wish I was just a driver again, but now that i've gotten my company up off the ground, you'll have to pry it from my cold dead hands...

 

[paullud]

There is a big difference in what you did blizzard, you put in the time and learned the industry. You are also running a small company and keeping overhead low. No one is saying it can't be done but that coming in with no experience and limited knowledge is not the way to build a successful company. Anyone can start an expedite company but, they might be bankrupt before they book a load.

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[Rocketman]

Opening up an expedite company can be done - it is being done each and every day of the year.

yeah..we know...that's the problem

 

[Rocketman]

The OP states that he and his brother combined are grossing $180k per year.

I would like to hear how many of these startup expedite carriers can claim half that in net earnings for a year?.... Anybody?

For sake of discussion, I'll take anybody up to 5 years after startup and up to 20 trucks...anybody?

 

[blizzard2014]

There is a big difference in what you did blizzard, you put in the time and learned the industry. You are also running a small company and keeping overhead low. No one is saying it can't be done but that coming in with no experience and limited knowledge is not the way to build a successful company. Anyone can start an expedite company but, they might be bankrupt before they book a load.

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This is very true Paullud, but you are not reading their entire post. The guy said that him and his brother have 100k to invest into a company. It shouldn't cost even 5k to start up a small expedite company. It costed me more because i', paying for a broker bond and some other stuff. All they will have to do is not make any money for 6 months and work their butts off trying to win bids. If they have enough money to survive that and don't mind working for free for 6 months - they can make it. But they will have to knw how to do it which they do not know. It took me 6 years of asking questions to figure all of this out and i'm still figuring it all out. It's like that novel the firm by John Greshem... Just when you think you've got it all figured out you learn something new.

 

[blizzard2014]

The OP states that he and his brother combined are grossing $180k per year.

I would like to hear how many of these startup expedite carriers can claim half that in net earnings for a year?.... Anybody?

For sake of discussion, I'll take anybody up to 5 years after startup and up to 20 trucks...anybody?

I know of one that grosses 2 million in sales a year and they haven't even been in business for 2 years. It's what separates the men from the boys. Also, they run all cargo vans with low overhead, they pay weekly, and they are really good to their drivers. They have built a system that works and they have invested the time and money to build the company up. I'm not going to mention them to anyone - not even in a private message. But they are out there and they are doing well. I'm not saying everyone is going to do that.

I personally do not want to get bigger than 15 trucks. I don't want to be monitoring a whole bunch of dispatchers and customer service peoplr. All I ever wanted out of this is a way to be able to take winters off and still have a few grand of income coming in while i'm waiting out the ice - or to work from home and make a few grand a month. It's not easy work either. I start booking loads early in the morning and then I have to stay up off and on throughout the night providing position updates and monitoring drivers.

But I prefer this over the parking lot any day! I'm not trying to bash the nay-sayers, I understand your advice. I struggled with dropping the hammer on my company for 4 years. I had all the info needed to do this for four years and I was scared to death to make a move until one day I just said screw it and went all in! Now i'm here and I can't turn back to the way things used to be.

 

[shipit]

I am definitely going to go through the previous forums looking for something helpful! and yes, I plan to go to the expo!

 

[ATeam]

Essential reading for anyone thinking about starting a trucking company:

Have we seen the end of the trucking tycoon?

I stumbled onto this piece this morning. Excerpt:

"Trucking companies today face an overwhelming list of societal, human and compliance requirements that didn’t exist in the past. At the same time, costs have risen and as a result, trucking operators no longer have any margin for error. None whatsoever. Think about this for a second: a small fleet or one-truck operator that’s involved in an accident will need to generate $200,000 in revenue to cover the $10,000 insurance deductible, assuming they’re running a margin of 5%. Good luck with that. And that’s not to mention CSA implications and all that other stuff. One mistake can put you out of business."

 

[Brisco]

I have sufficient capital to invest and also time to commit but
I need to be pointed in the right direction.....

This part of your original post is what through up the flags. You have plenty of capitol to "get started" in the business. You have no where near enough capitol to jump in at the level you describe in the statement quoted above......

IMO, not actually having any Experience in the Trucking Industry at all, and only knowledge of the Trucking has been learned by studying Trucking "Online", how would one know if their "Capital" was sufficient enough to start up such a venture?

Another bit of advice....take all those $$$ figures you have ran across during your online studies and cut them in 1/2. Do this just to be safe. Too many "Truckers" out there boast about their income ONLINE just to save face amongst their "Online" Friends. Very few actually admit that they're losing there akk out there. The ones that do, and there are MORE of them out there than there are that are actually making money, just disappear off into the sunset doing something else with their lives.

 

[Brisco]

I am definitely going to go through the previous forums looking for something helpful! and yes, I plan to go to the expo!

That's a Start when it comes to Expediting.

 

[shipit]

You've asked for advice. You probably haven't gotten the advice you were looking for. If you would prefer, we could paint you a pretty picture and tell you a lot of lies?

No, I would rather have the brutal truths! thanks for you input! It is appreciated!

 

[shipit]

Originally Posted by shipit
I have sufficient capital to invest and also time to commit but
I need to be pointed in the right direction.....

IMO, not actually having any Experience in the Trucking Industry at all, and only knowledge of the Trucking has been learned by studying Trucking "Online", how would one know if their "Capital" was sufficient enough to start up such a venture?

Another bit of advice....take all those $$$ figures you have ran across during your online studies and cut them in 1/2. Do this just to be safe. Too many "Truckers" out there boast about their income ONLINE just to save face amongst their "Online" Friends. Very few actually admit that they're losing there akk out there. The ones that do, and there are MORE of them out there than there are that are actually making money, just disappear off into the sunset doing something else with their lives.

When I stated earier that i have sufficient capital, I feel I have enough to get started in the business. By no means do I feel that i have enough to start an insanely large comapny over night. But, do I feel I could get my foot in the door and start small and work my way up with that! I just didnt want to state I had $100,000 to invest and no one take me seriously. I feel that everyone thinks I want to just throw money at it and pray it works out. This is not the case at all. If I do enter this field I will eat sleep and breathe making this work and yes I am willing to risk everything to be successful. I am not willing to just waste it though.

 

[Rocketman]

I know of one that grosses 2 million in sales a year and they haven't even been in business for 2 years.

1. Doesn't mean that they are a making even one penny in profit. Being able to turn a profit out of it is what seperates the men from the boys. Anything less is just another wannabe putting on a show.

2. I seriously doubt that the company you are referring to started up 2 years ago with little knowledge of the industry and just magicly knew how to run a successful expedite company. It ain't that easy. They had experience in the indutstry from somewhere before they started.

It IS easy to get into this business. It is hard as hell to make it profitable.

To the OP: I don't want to discourage a young guy from trying to succeed. I admire what you and your brother have done in a very short period of time. I have also seen a lot of very successful people lose a LOT more money than you are starting with by very simply trying to venture out into something other than what got them to where they were. Don't think for even a minute that it can't happen to you. In fact, in the trucking industry, it's almost a given. Some succeed, but most fail miserably.

If you do choose to pursue this as a business venture. Start very small and let the business build itself. You will learn a lot in the process.

I have 2 problems with what you want to do. Obviously it's my opinion and it's your money, your responsibility.

1. To do what you are proposing will eat up a lot of the time that you are currently dedicating to your other jobs/investments. You apparently have something very good going. In my opinion, your wanting to throw away a dollar trying to earn a dime.

2. There are simply better places to invest your money. You need to think long and hard about what your goals really are. Is it your goal to own a trucking company? or... Is it your goal to grow your investment? If the latter is true, then you need to explore a lot of options. I believe you will find something much easier to manage with a lot more potential for success.

If it is your goal, your dream to own a trucking company, then by all means, you have what most startups don't have...at least "some" cash. Do a LOT of research. Associate yourself with successful trucking company owners...not successful o/o's.. which is mostly what you will find on this site (including myself). It is a completely different ball game. There a few on here that do what you are proposing...and some of them are even successful..lol

Good luck!

 

[roadeater]

This is like a guy who wants to play in the NFL and dosent know how to play football... just made my day lol

 

[paullud]

Originally Posted by shipit
I have sufficient capital to invest and also time to commit but
I need to be pointed in the right direction.....



When I stated earier that i have sufficient capital, I feel I have enough to get started in the business. By no means do I feel that i have enough to start an insanely large comapny over night. But, do I feel I could get my foot in the door and start small and work my way up with that! I just didnt want to state I had $100,000 to invest and no one take me seriously. I feel that everyone thinks I want to just throw money at it and pray it works out. This is not the case at all. If I do enter this field I will eat sleep and breathe making this work and yes I am willing to risk everything to be successful. I am not willing to just waste it though.

With no experience in the industry you are more likely to be wasting the money or throwing up a Hail Mary. I drove TT for 3 years and I researched and asked questions here for a year before I got involved in expediting. I made some mistakes, stayed with a company out of a sense of loyalty that I should've bailed on and I was slowly bankrupting myself. I paid a good sum of money as tuition to the school of expediting and picked up a lot of information along the way in a relatively short period. If you are going to have even a small part of the dedication you clam you will have go ahead and buy your vehicle and live the life. Find a company to lease the vehicle on with and run for them for 12-18 months gathering information along the way. You can make the mistakes and learn the lessons that will cost you money rather than taking on the responsibility of having other drivers and bankrupting them. After that sign on to a company along the lines of Landstar for 18-24 months which will give you a little bit better idea of owning your own company. After getting the experience there you can try and take a run at running completely independent as a 1 truck operation. Things are going to be really rough for awhile since a lot of companies won't use you since you will be a new company. After 3-6 months of taking loads no one else wanted because the broker or shipper has a history of not paying or they are bad loads you might get better ones as long as you have done the job better than others. In 18-24 months as long as you have been profiting above industry average you will be better prepared financially to sign on 3 to 5 O/O. You will have a tough time finding quality O/O to sign on since there are so many that perform poorly and many better quality O/O won't want to risk signing on. I would estimate 6-12 months to sign on and get the O/O you want representing your company. Of course before you sign these drivers on you will need someone doing orientation, safety, logs, load finding, etc. You really won't need any dispatchers at this point because you should be able to manage 5 on your own. After 6-12 months as long as things are going well you should look at signing on another 3-5 O/O which at this point you will want to hire a dispatcher since you will still need 10 hours a day off the clock for your mandatory DOT break since you will still be driving. You will want to make sure you hire a seasoned dispatcher that you can rely on and that knows how to treat drivers. This should help you get started and is a little bit more than a 5 year plan. You can do more research along the way as you figure out exactly what vehicles you will want since it will change what insurance, authority, etc that you will need.

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