Questions about the Overall Expediting Business

TrainFan · Sep 8, 2006

I have been reading these forums for quite a few years and I enjoy the posts and respect the opinions of all the authors. This is my first post (sorry for the length) but I have several questions for my fellow expediters. I have been involved in manufacturing & logistics for many years and last year I started a small logistics company here in Northeast Ohio. I have a cargo van with my own authority and do mostly airport work with some expedite work. My questions for all of you are as follows:

1. It appears that at least in Ohio freight is drying up. As I drive throughout Ohio (especially Youngstown, Cleveland, Akron, Canton, Mansfield and Toledo) it seems there are more businesses closing and very few that are opening. For those readers who drive in other areas of the country are there any â€œhot spotsâ€ where the economy is growing in a sustainable manner (not housing bubble induced)? Or is this an overall economic decline (not just here in Ohio)? In essence, how are other parts of the country doing?

2. As I drive around I notice that there are many vans and straight trucks that are hauling freight and have no markings, i.e. name of the company, city and state, MC #â€™s, PUCO # , DOT # if needed, etc. I wonder what you thoughts are on this and what your solution, if any, would be.

3. I noticed that on several posts the discussion centers on how straight truck freight (because of HOS) appears to be moving toward teams and away from solo drivers. Do any of you see the day where vans will be treated like straight trucks, i.e. have to log, be placed under DOT safety requirements (HOS) and have to scale in all states? In your opinion if this occurs how will this affect both your own situation and the overall expedite industry?

4. Lastly, I know that the 4th quarter is usually a very busy time because of the Holidays. Yet it seems (at least in Ohio) the overall psychology of the consumer is one of belt tightening because of layoffs, rising healthcare cost, etc. Since the freight industry is the first to notice changes in economic conditions (like the canary in the coal mine), based on your observations what are your expectations for the 4th quarter and also 2007?

Konrad A. Fuetter
ADSA Logistics LLC
Canton, OH

fastman_1 · Sep 8, 2006

RE: Questions about the Overall Expediting Busines

I'll answer the only one I can Ohio is Slow!! I lease to a Small Company near the Airport and this last Year my runs are down about 30%. I feel its just the Economy Cycle we are in. I'll hold on it should shake out and Improve in the coming Year.it always has. As drivers move on for the Grass is Greener Syndrome more freight will become available for us. and as the rest of the World catches up with the economy the business's should rebound. Just my thoughts.Thats my Story and I'm sticking to it.

Owner/Operator since 1979
Expediter since 1997
B Unit Semi Retired
Somedays are Diamonds and Somedays are Stones

ACE · Sep 8, 2006

RE: Questions about the Overall Expediting Busines

1- Ohio is a little slow right now because we are still an automotive state and when Ford and GM are slow so is North East Ohio.
There is still alot of freight but the pie is being divided into more pieces.

2- There are more and more courier companies that run different type vehicles but do not mark them and are not following the rules. It is to hard to enforce the rules when most of them are regional operations.

3-Expedite shippments can favor teams on long runs and teams do not need to shut down because they are out of hours. Solo's will do fine.
But it is easier for dispatch to book teams than worry if the solo still has hours.

4-We have noticed a pick up in freight the last 6 weeks and I feel it will continue.

DannyD · Sep 8, 2006

RE: Questions about the Overall Expediting Busines

>I have been reading these forums for quite a few years and I
>enjoy the posts and respect the opinions of all the authors.
> This is my first post (sorry for the length) but I have
>several questions for my fellow expediters. I have been
>involved in manufacturing & logistics for many years and
>last year I started a small logistics company here in
>Northeast Ohio. I have a cargo van with my own authority
>and do mostly airport work with some expedite work. My
>questions for all of you are as follows:
>
Rest easy on long posts. I generally like them. It's easier to get what someone means when there's more information presented. So feel free to take as much space as ya need to convey your thoughts.

>1. It appears that at least in Ohio freight is drying up.
>As I drive throughout Ohio (especially Youngstown,
>Cleveland, Akron, Canton, Mansfield and Toledo) it seems
>there are more businesses closing and very few that are
>opening. For those readers who drive in other areas of the
>country are there any â€œhot spotsâ€ where the economy is
>growing in a sustainable manner (not housing bubble
>induced)? Or is this an overall economic decline (not just
>here in Ohio)? In essence, how are other parts of the
>country doing?

On this I can only answer for Michigan. It seems as if there's been a slight decline. I have no numbers or anything to back this up. That's just my observation. Others may notice a huge decline or maybe even an upswing.
>
>2. As I drive around I notice that there are many vans and
>straight trucks that are hauling freight and have no
>markings, i.e. name of the company, city and state, MC
>#â€™s, PUCO # , DOT # if needed, etc. I wonder what you
>thoughts are on this and what your solution, if any, would
>be.
>

I like this. Given the choice I'd go incognito myself. If I'm going to advertise for someone I'd prefer to be paid for it. I sometimes think about trying to find a company that'll pay ya X cents/mile to advertise on your truck.

>3. I noticed that on several posts the discussion centers on
>how straight truck freight (because of HOS) appears to be
>moving toward teams and away from solo drivers. Do any of
>you see the day where vans will be treated like straight
>trucks, i.e. have to log, be placed under DOT safety
>requirements (HOS) and have to scale in all states? In
>your opinion if this occurs how will this affect both your
>own situation and the overall expedite industry?

Yes, I do see the day coming. When that happens I'm not sure exactly how I'll handle it. Being local I'm guessing it wouldn't affect me to much, but if it does I'll have to do one of those Ben Franklin balance sheets & see if the advantages or disadvantages of this industry weigh more. I definately see that day coming though.
>
>4. Lastly, I know that the 4th quarter is usually a very
>busy time because of the Holidays. Yet it seems (at least
>in Ohio) the overall psychology of the consumer is one of
>belt tightening because of layoffs, rising healthcare cost,
>etc. Since the freight industry is the first to notice
>changes in economic conditions (like the canary in the coal
>mine), based on your observations what are your expectations
>for the 4th quarter and also 2007?

I don't see the collapse of this industry like some. At the same time I think very few drivers will have what might be considered great quarters. Personally I know that I'm not willing to sacrifice what it takes to make 80K/year. Some may call that lazy. I view it more as I know what I want out of things & expediting is maybe 15% of my life's pie.

I have a hunch some get in this industry w/ grandiose (sp??) expectations. They're told "you can make $400 for going from point A to point B". Then they do quick math in their head & think "wow, I'll do that everyday & make 100K year". Then they buy a truck & find out that the $400/day run doesn't happen very often & that they have to sit 2 days after their delivery so that 400 is really divided by 3 days plus the expenses & so on.

In a nutshell, the ones who have this business well planned out will do well in the last quarter of 2006 & on into 2007. Those that don't will struggle. That just means expediting is no different than any other business. Some will do well & others won't. I don't feel the industry as a whole will be much different in 2007 than it was in 06 or 05.

Take care & good thought provoking questions,
Danny