Truck Topics
A Continuing Success Story: An inside look at Express-1
The small southwestern Michigan town of Buchanan would seem to be an unlikely location for the headquarters of one of expediting's fastest growing carriers, Express-1, but this 15-year old family business continues to thrive in it's rural setting.
Keith Avery, Co-founder and VP of Partner Relations says, "The city of Buchanan opened their arms to Express-1 and gave us pretty good incentives to build here. We have a great location; we're a few miles off the US 31 bypass and we're close to the I-80 toll road."
The beginnings
The Express-1 story is that of a friends and family operation; Avery and Co-founder Mike Welch had been friends since grade school and Welch's three older brothers have all joined the company.
Reflecting on the beginnings of the company, Avery says, "Mike Welch and I have been friends since grade school. He already had a background in the trucking industry and saw a need for an expedited service."
"In 1989, Mike told me, 'Hey, we can do this.' I was working for an office equipment store at the time, but I saw the opportunity with our own company. We bought a couple of trucks - a pickup with a cap and a little 12 foot box truck. Between us, we did the driving, sales, billing; in short, everything. We started from scratch, working out of a small office in Niles, MI."
Avery continues, "At first, we didn't have enough trucks. We operated with company trucks and drivers back then. When we were just starting out, buying trucks was a big deal. Finding drivers who would be on call was a challenge as well. We were fortunate in that regard because our fathers were retired and they helped out quite a bit."
Co-founder Welch adds, "In 1989, expediting seemed to have a future. We got a good feel for the business by doing all of the tasks. Back then, it was fairly inexpensive to start, particularly since we were doing the driving."
"We didn't have satellites and we used a low-tech accounting system. The first year we had two trucks, the second year four trucks. After the third year, we didn't drive nearly as much, we concentrated more on the sales and the operations."
Avery adds that two of Welch's three brothers were also involved in the company in an ownership and investing role. The plan was that they would come to the company full-time once it was up and running. Avery says that the business really took off when they came on board. "They added their expertise and helped things grow greatly."
"People ask me now if I though that it would turn out the way it did. In the back of my mind, I knew it would succeed but I didn't know what it would look like."
Welch shares that feeling: "Our success has surprised me, especially with our humble start, but I think we have a good thing going. I anticipate that as we grow, I believe in our ability to become a bigger player in the expediting industry."
He continues, "Because of our Buchanan location, sometimes customers have the wrong idea about our operational area. They feel that we're just a local or regional carrier, and they're surprised when we tell them, 'yes, we can pick up your load in Missouri.'"
"It's a huge territory that we cover in western Michigan, Northern Indiana and other areas. Sometimes the perception is that we only operate regionally, but that's simply not the case as evidenced by our ability to work with National Logistics Management and their nationwide automotive freight. We take freight all over the country."
Their duties
"As the Vice President of Partner Relations, I work with outside carriers," says Avery. "When we are unable to cover a shipment outside of our area, we look outside of our owner-operators and partner with other carriers who have an available truck and they do the same with us."
"I spend most of my day in Operations where I work with building partnerships with the other carriers, maintaining those relationships and making sure that our freight is taken care of, making sure the controls are in place to track our freight."
"What we have found over the last few years is that ultimately, the customer doesn't care how their freight gets there. They simply want the freight to get there in good shape, safely and on time."
Mike Welch relates that his duties keep him on the road much of the time. "I spend about fifty percent of my time on outside sales, and the rest of my efforts are devoted to working in the administration, contracts, and future planning areas."
Paying tribute
Because of their time behind the wheel, the founders have a deep appreciation for the Express-1 contractor fleet: Avery says, "Our contractors do a heck of a job. What they do is not an easy task as any one who has spent time in a truck can tell you. I know that I couldn't do what they do day in and day out. They do a great job!"
Welch concurs: "I think our contractors care about being professional and doing the job. When you look at the performance of our contractors, they are very solid. We have some good people and they believe that we're all in this together. They are great representatives of Express-1. We don't have a large recruiting budget because most of our prospective contractors come from referrals from our present contractors."
"The difference in Express-1 is our people. Our customer service and the drivers we've had over the years; they've done a really good job helping the company grow. You'll get that answer from a lot of people."
"We're evolving. We're not a large company yet, but we're getting there. When I first started here, there was a lot less structure, but as we've grown, structure has come with that."
So says Jeff Curry, Express-1's Chief Operating Officer, who has been with Express-1 for over two years, coming to the company from a background in banking.
He describes his role with Express-1 as that of a General Manager. He says, "What I enjoy in my position is the strategy part of the job. I enjoy sitting down with our group every week and developing an overview of where we are and where we're heading."
"My primary focus is recruiting. I work with Michelle Pence and Bill Welch in bringing owner-operators to the company. I really enjoy bringing a contractor to the company and seeing them succeed in expediting."
"In a hallway connecting the original Express-1 building to the addition built in 2001, is a bulletin board covered with photos of the current Express-1 contractors. In a display of memory skills, Curry is able to name virtually all of his drivers and he has background information and personal anecdotes about many of the contractors.
Curry tells of his other duties: "I'm also the ISO management representative - I work with that system. We embrace ISO and it's been very effective for us. It forces us to look at segments of our business and make improvements."
He touches on a recent development in the company's technology: "We've developed a communications log through which our employees can enter our system at one central place and put in any concerns we might hear from a customer or any ideas they might have. The user can also enter any improvement they might have started."
He explains, "Our management group will go through this log every Monday morning and decide if any of the items need to be elevated to the next stage. Then, we let each employee or customer know that we have received their feedback. So far, it's worked very well."
"When we were a very small company, these comments would be passed around in the hallways, but now that we've grown, we have most everything online now," he adds.
"When you're part of a large company you take these things for granted, but when you're a young growing company, these are things we have to devise."
The numbers
Curry says that automotive freight is currently around 50 percent of Express-1's revenue base. "The auto freight has turned this company from a regional carrier into a national one."
It would appear that these are not the typical short haul auto runs, however; The average run miles are in the 300-350 mile range.
Curry says that Express-1's projections for 2004 estimate a 20-25 percent growth: "If we continue on the same pace as we did in the last six months of 2003, we'll hit those goals. Fortunately, we haven't experienced runaway growth; we've been able to handle the increased business."
The COO addresses Express-1's interest in improving its technology: "There are always IT issues. The Operating System was developed for a truckload application, so our two-man IT department is always working on the system, tailoring it for Express-1's special needs. They also work on the GPS and Qualcomm system.
Curry is proud of his company's community awareness: "We employ quite a few Buchanan people, and we try to be a good tax-paying company. We give back to the schools and we sponsor lots of things in the community."
Operations
Larry Larson is Express-1's Operations Manager and been with the company for six years.
"We rearranged our operations area recently and it was a good change; it's cut down on the noise level. We've put a load planner (dispatcher) and customer service representative right next to each other and it's much more efficient than the previous method.
"I'm in charge of the Operations staff. Some of my duties are to book loads, dispatch those loads and deal with the drivers. Part of my job is to act as a fixer and to smooth things out. I also try to keep everyone happy," Larson says.
Larson began with Express-1 as an assistant dispatcher and worked all three shifts before his move to Operations Manager three years ago. He says that, "Every day is a different challenge, you never know what the next phone call is going to bring."
"At peak times, we have 15 - 16 dispatchers working in the Operations area. During the overnight shift however, we might have only one person working. Usually, 70 percent of our fleet is available."
He continues, "Our dispatcher training has really developed. We do a better job of training before we bring new dispatchers into the job. They undergo two to three weeks of training depending upon how fast they pick it up. We try to give them a little bit of everything before introducing them to the specialized areas."
Express-1's dispatch process
"If a customer calls and gives us two hours to pick up a load, we'll book that run. Customer service will book the load then turn it over to the load planning department who will find an available Express-1 driver. If one can't be found, we'll turn the run over to one of our partners who will cover the load."
"Most of the runs that we handle fit into a two- to three-hour window for pickup and as soon as we determine whose truck the load will fit on, who can get there in time and who has the hours available to do it legally, then we'll call the driver and get him moving to the pickup."
"We send them the directions they need. That should take around ten or fifteen minutes. Sometimes when the load is partnered, it takes a little longer to find a truck," he adds.
"Occasionally we can't find a truck and then we call the customer within a half hour and let them know and we try to secure a little more time to pickup. We have a lot of trucking partners we can call. We know their operational areas and where their company is strong."
"Ninety-five to ninety-eight percent of those loads go without a hitch."
"At this moment, (during the 2003 holiday season), we've been very busy finding tractor-trailers. With that size truck there are a lot of peaks and valleys."
"The tractor-trailer guys have to have the mindset that 'I'll run 24 foot freight,' or, 'I'll run 12 foot freight'. If they won't run any other size load except for full truckload, that's a problem."
"Fortunately, we have a dispatcher here who works with our partner, US Express. That company has a fleet of 5000-6000 trucks and they can cover a lot of our tractor-trailer loads."
Express-1 is currently operating a fleet of around 160 units that includes tractors, straight trucks, standard cargo vans and some 15-20 Sprinter vans.
One of Larson's co-workers is Jeff Altergott of Internal Sales.
"It's my job is to handle the calls or emails from our different partners; I have to monitor that portion of our business as well as the freight from National Logistics Management."
"The NLM board is monitored 24/7 because we have to be on the computer screen to get the load. Virtually all of our automotive freight comes to us through the NLM board."
"When we see a load on that board, we'll check to see if we have a truck in the area. If we want to take that load, we'll submit a bid then wait to see if NLM accepts it."
"Jim Welch and I cover the US Express partnership during the day."
"I've been in sales my entire life, typically in charge of outside sales," says Jim Welch, VP of Internal Operations. "I started with the company in 1996, but Express-1 is still kind of a new job for me."
"I'm responsible for all of the internal operations which include customer service, load planning groups, the NLM group and all of our Internet sales groups."
"The way you sell this product (expediting) is a little bit different. You sell your service, but in expediting, you only get one chance to sell that service."
He continues, "We have employees working as our outside sales force, but we have just added an independent contractor in a sales capacity in the Cleveland area. As we grow and secure a larger market share, we will probably add more contractors to the sales force."
"Also, we've just expanded into the Cleveland area and we are probably going to move our sales efforts south down the I-75 corridor. We've been pretty successful even though we don't sell in Detroit or Chicago, for example."
"We've done well by infiltrating smaller towns and smaller markets and also by utilizing some of the tools like National Logistics. Our reputation has helped us get a number of referrals."
Welch says that Express-1's people are the key components that separates Express-1 from the 'rest of the crowd.'
"We don't have turnover here; we've had the same people heading up operations and customer service for six or seven years. People become accustomed to that."
"I always inform our drivers that our people will always tell it like it is. When Express-1 is busy, everyone is busy. When we're slow, the rest of the industry is slow. I think that when the business is slow, we're the best place to be. We do everything we can to make sure our trucks are running."
He continues, "We use National Logistics Management differently than other companies. We use it to keep our trucks are loaded. When we get people out in certain areas, we get very aggressive to get them back to busy areas, because we realize that you have to keep the wheels turning. We have formed valuable partnerships with other carriers and we work back and forth with them to keep our drivers busy."
"We do have some specialized handling loads," Welch adds. "One account we have is a major hospital bed manufacturer and we transport their products all over the country with special deliveries into their facilities. We just finished a cross country tour with a cargo van team who took a specially-equipped van to shows."
"If someone gives us an opportunity, we figure out a way to do it. We do the trade shows and we're looking to do more, because it's yet another source of revenue."
The Express-1 Facility
The company moved into it's purpose-built headquarters in 1995, but by the close of the '90's, it had realized that more elbow room was required.
Construction of an extension was completed in 2001, which nearly doubled the floor space of the headquarters building.
The facility includes a large operations area with plenty of room for expansion, a warehouse/storage area with cross-docking capability and a recently renovated Drivers Lounge with shower, workout room, computer stations, TV viewing room and other amenities.
John Welch is the Chief Financial Officer of Express-1 and he says, "My job includes the general oversight of all the finances, protecting the assets and accumulating assets. Mainly, hoping that we can make ends meet at the end of the year."
"I've been around Express-1 since the beginning. Even when I was the CFO of another company, I would help Keith and Mike with financial matters."
"You could tell the company had potential from the beginning. Express-1 opened in June of 1989 and by December of that year, we were making money. That's fairly unusual for a startup."
"All of the Welch brothers were investors in the earliest days. Jim and I came on board in 1996. We're very happy that we've been able to finish this past year with almost $16 million in sales and we're looking at $18.5 million in 2004.
"Between the fleet of 160 trucks and our employees, we have over 200 people in the company. We've continued growing all through the years. For example, we've experienced 24% growth just this past year (2003)."
Bob Tracey, Director of Safety, came to Express-1 in 1997 from his own consulting firm that specialized in safety training and ISO 9001 quality training. He was also the safety director for several large trucking companies.
Tracey is in charge of all safety and compliance issues for the company's fleet in addition to being the coordinator of Express-1's ISO 9001 quality program. He's also heads up the company's border security programs including FAST and CSA.
He says that in the trucking industry, there is no standard pattern to his work day: "At least a couple days of the week are filled with bringing on new trucks - orientation and the like."
"It's my responsibility to get all the details together for the new owner-operators, making sure that they have all their contracts and permits straightened out. I spend around two hours in front of the orientation class, but there is all of that behind the scenes stuff to assemble."
Tracey says that he's very proud of the Express-1's fleet safety record. "By mid-December of 2003, our drivers had compiled close to 10 million miles of reportable accident-free driving. Our safety scores are very satisfactory."
According to Tracey, the new Hours of Service Regulations that generated so much consternation prior to the implementation date of January 4, have been somewhat of a non-issue.
"So far, I haven't had a lot of problems with it, just a lot of questions. The jury's still out as far as how much impact it will have on us - I haven't seen it impact us at all from the standpoint of costing us any business."
"In the expediting business we run some short haul loads; the biggest challenge I have now is teaching drivers how to manage their sleeper berth times so they can maximize their hours."
Ms. Michael Ruelle, Human Resources started as the HR and recruiting manager four and a half years ago, and worked in that area for around two and a half years. As the company grew, she moved exclusively into HR.
She begins, "Many of the drivers I brought on board are still here, so we know each other and I still have drivers who call me on a regular basis."
"We have a personal relationship with our drivers. They have free access to our building and they have access to anyone they need to talk to. That's something we strive to maintain, our compact with the people."
"We have a database so when we're talking with someone on the phone and we can't place the driver, we can call up his profile and see his photo to help remind us."
She adds, "We really do try to keep a level of personal contact with our drivers. One of our dispatchers, Rick Demitruk, has a habit of assigning every one of our drivers a nickname. It's a way to personalize the driver/company relationship."
"That's part of who we are," says Ms. Ruelle "We tell people in orientation, don't be surprised when you get a nickname. It makes it easier for the owner-operators to work with us and it helps develop an atmosphere of trust and confidence in us."
"They believe that we'll stand behind them and support them and do everything we can for them. They believe that because we will help them and that's something that's very precious to us."
Express-1's Human Resources is actually composed of two parts - the HR side and the training side. Ruelle says that the company's training mostly focuses on employee training; maintaining employees' skills and expanding on those skills.
She tells of a program called 'lunch and learn': "Once a month, a topic is chosen and all employee are invited to attend. For example, a recent topic covered the new hours of service changes."
She says, "None of the departments here at Express-1 are truly separate. There is intermingling between all of the departments. Michelle Pence and I, for example, worked together in HR/Recruiting before she went to conducting orientation. Because of this, we share much of the same knowledge and we are able to support each other on the job."
"Pam Timm, our Training Facilitator, is a former owner-operator with Express-1. She ran team with her husband until joining us in the office about a year ago. Pam identified some needs in our Canadian border crossing training program and developed a program that has since been incorporated into our training agenda. It has greatly assisted our new drivers."
"The first thing I look at is the applicant's employment history.
If I see someone who has jumped from expediting company to expediting company, I'll be a little leery because they might not be happy with our company either," says Michelle Pence of Express-1's Recruiting Department.
"However, we have a lot of first-timers who apply with our company. I think most of them are looking for a career change or are retired and want to see the country."
Ms. Pence says that they welcome newcomers to the company because it allows them to learn expediting the Express-1 way.
As with most expedited carriers, Express-1's fleet is composed primarily of single-truck owner-operators, but she adds, "We have fleet owners with anywhere from 2-3 trucks all the way up to 10 straight trucks."
"Our recruiting needs at this time include straight trucks and tractor-trailers, especially teams."
She adds that Express-1 does not transport Hazardous Material loads because there has not been a customer demand for that service.
For those Sprinter owners looking for a carrier, she states that Express-1 is unique among expedited carriers in that the company pays a higher "C" rate for fully-loaded Sprinter vans - a rate that is $.28 a mile higher than a standard cargo van rate.
Ms. Pence says that the keys to success for an Express-1 Contractor include:
Availability Stay out on the road Don't turn down loads, take every run that's offered. One of those runs might put the driver in the perfect spot for that great run. Be a self-starter, after all, it's your business.
President Mike Welch shares his thoughts about the expediting business in general and his company's future:
"I didn't expect the industry to grow as much as it has and I'm optimistic that it will continue to grow. One thing is the spillover from general truckload transportation - the lack of tractors. The hours of service issue comes into this as well - I think there's more of a need for expediting."
"Companies are getting better at paring down their inventories and adopting just in time."
He continues, "The future for Express-1 includes working with other carriers, increased of the Internet and an even stronger sales effort."
"At Express-1, we do what we say we're going to do. I think everyone here is friendly and approachable and I think that's paid huge dividends for us."