Please help! Owner trying to start small cargo van fleet?

[Idkagoodusername]

Good Afternoon Everyone

Would you start a delivery business in Houston? Right Now at this time? Or Would You Wait?

These are the questions that I have been asking myself since starting the entrepreneurial process. This has been a two month process. I am 99.9% complete with the process of starting the company. I have already finished the following:

1. LLC filed / Completed with Texas
2. DBA filed/Completed with Texas
3. Logo/ Complete
4. Professional Website Complete (in house)
5. Virtual Office/ - No Rent
6. Shirts/ Complete
7. Social Media Accounts Created
8. Virtual Logo Ads and Websites Ready
9. Expensive Pallet Loader
10. Professional Account Manager on stand by
11. 1099 Driver w/ background check and driving record {business partner}

Key Projected Revenue
pallets loads,
courier services,
contract work
expediting Shipping,

The only thing I am missing is the van which I have secure for tomorrow. I guess I am having second thoughts but I hope someone who works or know someone who works in the courier / delivery business? Would you even start a delivery business in the Houston region? If you think yes, would you start the company right now or wait a couple of months? I see a lot of restaurants are closing down permanently and small businesses are still struggling. However; on the flip side, it seems the big brand delivery companies are profitable.

I was lucky to have a background in finance to know the ends and outs of creating a business. Logically, I created a financial model to create a profit and loss projection; however, I know the model has inaccurate data. Why you ask? I could only make assumptions and analysis with the information that I could find on the internet. Some of that information was outdated!

I know once I sign the dotted line in the morning, Its a wrap! I would have waited if I did not feel 100% on my decision but I know I won't get a better deal with a Newer transit at a reputable dealer.

Oh about the vehicle history.

The first van that I was about to get two week ago was vandalized the night before I was suppose to sign the dotted line. Honestly, I think its a sign! lol It was a 2019 ford transit 250 20998 |27k miles, lane assist/ camera - Reputable Nationwide Dealer, but now same dealer has 2018 Ford Transit 150 20998 |39kmiles only camera .

However, I am fired up either way the outcome, I appreciate all the advice.

Last but not least, No loans have been involved until tomorrow morning

 

[Turtle]

The real question is, how much do you know about the courier and expedite business?

 

[Idkagoodusername]

Most of my information has been coming from websites, financial data, youtube videos, and hand accounts from a friend of friend that does expediting and a friend that does courier service but as a 1099 using their vehicle. I also know one expeditors that does 60/40 split but he is pushing their vehicle as well. Not a lot of owner/operating information out there.

I have been a consultant for every industry but transportation. I have only dealt with transportation on a macro scale but not micro scale. So I love problems solving but I am trying to figure what problems besides shipping rates and gas flunctions.

So not a lot of information out there about the owner/operator small fleet capabilities.

 

[Turtle]

You need to go to the truck stops and talk to expediters both drivers and owner operators. There's some revenue in a straight truck, but a cargo van owner operator is tight, even more so when trying to split the revenue between a driver and owner. The entry barrier to expedite with a cargo van is so low that too many people have entered it thinking "have cargo van, let the money roll in." But what that means is, there are 15 or 20 cargo vans out here for every cargo van load, so the wait time (in days) between loads can be significant, and the rates are in the toilet. Most cargo vans are running 800-1000 miles a week on average. The ones who do better than that aren't new to the business.

Every successful expedite fleet owner I know of already knew the industry inside and out, and most (if not all) drove their own truck for a year or five before trying to become a fleet owner.

 

[danthewolf00]

Why don't you look up what it cost to insure a cargo van now as a owner operator that runs across the lower 48.......its the only thing i don't see on your list.

 

[Cwdispatchinggroup]

You are going to make mistakes. But if you feel strongly about it go for it. You never know what you can do if you focus on all the reasons you can't do it. Every successful person I know failed first.

 

[split]

You need to go to the truck stops and talk to expediters both drivers and owner operators. There's some revenue in a straight truck, but a cargo van owner operator is tight, even more so when trying to split the revenue between a driver and owner. The entry barrier to expedite with a cargo van is so low that too many people have entered it thinking "have cargo van, let the money roll in." But what that means is, there are 15 or 20 cargo vans out here for every cargo van load, so the wait time (in days) between loads can be significant, and the rates are in the toilet. Most cargo vans are running 800-1000 miles a week on average. The ones who do better than that aren't new to the business.

Every successful expedite fleet owner I know of already knew the industry inside and out, and most (if not all) drove their own truck for a year or five before trying to become a fleet owner.

What in your opinion are the reasons why some Van's are running more miles?

How low a rate is in the toilet? Is a .75 a mile average not likely over the life of a vehicle? Would it have been likely 6 months ago?

 

[split]

Watching this thread with interest. Looking to learn this industry starting behind the wheel, and I'm also in the Houston area. If I understand correctly, you are looking at both local and expedite as revenue sources?

 

[split]

Why don't you look up what it cost to insure a cargo van now as a owner operator that runs across the lower 48.......its the only thing i don't see on your list.

I'm struggling to get a good number for that as well. Hard to get any information from the reps I've talked to without having the vehicle yet. What is a reasonable range for this cost today?

 

[Turtle]

What in your opinion are the reasons why some Van's are running more miles?

Like I said, the drivers of those vans aren't new to the business. They've learned the nuances of where freight is likely to come from, what loads to turn down because they go to places you aren't likely to get loaded out of, and to take even crappy loads, or deadhead, to places where you are likely to get a good load.

u
How low a rate is in the toilet? Is a .75 a mile average not likely over the life of a vehicle? Would it have been likely 6 months ago?

Well, if your Cost Per Mile is 45 cents, and you pay yourself 35 cents a mile, that's 80 cents per mile. Anything less than that and you're losing money that's going to come from somewhere, and it's either going to be your pay or the funds needed for maintenance. Anything under $1 a mile is in the toilet, and the further away from $1 is it, the deeper into the toilet it becomes. And it's been that way for years.

 

[split]

Thanks. I figured the choice of carriers would have more to do with it than the driver. That is certainly sobering to someone looking to break in to the business.

Tough times indeed. With those numbers, hard to imagine being an owner of a van with .45/mile costs giving 40% of .80/mile to a driver. .03/mile margin? What a business lol.