Success in Expediting: Part 2 -- Three Opportunities for Expediters to Win in Today's Freight Market
Editor's Note: Perhaps you're considering expedited trucking as a new business opportunity where you can break free from the office, travel the country, and take on new and interesting work with each trip. Or, you're a veteran expediter looking for new ideas and advice to help you not only survive but thrive in today's market.
Whether you're just starting out or have been in this business for many years, one thing's for sure: knowledge is power. That's why at ExpeditersOnline.com, we've put together a new three-part series on "Success in Expediting" to empower you with the market insight, expert advice, and motivation you need to succeed as an expediter for the long-haul.
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In "Part 1 -- The State of Expedited Freight," we discussed how freight has been slow for the past several months, and industry experts predict market uncertainty through the end of the year, with an uptick expected around the first or second quarter of 2017.
Yet, for smart, hard-working expediters, slow freight can actually offer significant opportunities for success -- if you know what they are and how to capitalize on them. So, what exactly are those opportunities? That's what we're going to address here in the second installment of our three-part series on "Success in Expediting."
Here are three opportunities that can help put you in the best position to win in today's market.
Opportunity #1. Align yourself with a stable carrier.
One upside to slow freight is that it exposes weak and unstable trucking carriers. And while all carriers are affected at some level, they aren't all impacted equally.
"The carriers that have been around the longest are going to understand how to work through a recession," says Stuart Sutton, former president of Sylectus and now CEO of Full Circle TMS, a Toronto-based transportation management software firm. "Especially the ones that have been around for a while. They've lived through two or three downturns, so they know how to batten down the hatches."
But other carriers may not have the financial strength to survive the next several months before the market improves. And if you're with a carrier in that situation -- or you drive for a fleet owner who's leased to that carrier -- you're going to struggle to find enough loads to pay your bills. And in some cases, you may not even get paid for the freight you deliver.
"It's my opinion that all expedite owner-operators and drivers need to look at their carriers and fleet owners," says Paul Williams, chief executive officer for Expediter Services, which provides business and operational support services for drivers and owner-operators. "Are their fleet owners capitalized enough to survive a continued soft freight market? Are their carriers too dependent upon load boards for freight? If so, that's a sure-fire sign the carrier could have trouble. Drivers need to look at their carrier to make sure they have stable long-term contracts in place with shippers. And if your carrier doesn't have a sales force to secure shipping contracts, you need to move now before you can't move."
Keep this in mind: a strong, stable carrier in a slow market will become even stronger as freight picks up. So, assess the financial health of your current carrier and determine whether you should stay or go. This way, you can put yourself in the best position to accept more profitable loads as market conditions improve.
Opportunity #2. Expand your qualifications to earn more loads.
When freight is slow, more loads go to expediters with the most credentials, as carriers try to keep their best drivers happy. And the more qualifications you have -- from special equipment to hazmat and Department of Defense endorsements -- the more freight opportunities you'll have available to you.
"Especially in the slow times, you really want to be special," says long-time expedite owner-operator Linda Caffee. "You have to look at it as getting every endorsement you can, so that you can get every load that you can. To me, when freight is slow, it's really the time when you need to shine."
Opportunity #3. Focus on cost controls.
Even experienced, highly successful expediters, such as Linda Caffee and her husband Bob, have felt the impact of this market. She says that through the first six months of 2016, their income was down by nearly $30,000.
"The focus right now is on cost control," says Caffee. "Your expenses don't set the rates for freight -- the market does. You'll hear people say, 'I can't run for that,' and turn down loads because they won't make enough to cover costs. But you have to find ways to control costs, so you're able to run for less and can take on more loads."
One important target to reduce costs is the vehicle you're operating, says Williams. "Expediters need to make sure they're not in a piece of equipment that's getting under 9 mpg or that's breaking down every third trip. If they're in an older truck that's costing too much to operate, now is the the time to upgrade before they get behind with payments and their credit gets damaged."
Williams says that expediters should also examine their expenses associated with fuel, insurance, and maintenance to ensure they're getting the best possible pricing. For example, what fuel discounts does your carrier offer? How does that compare with other discount programs on the market? A 10 to 20-cent per gallon price advantage can translate into hundreds of dollars more in your pocket per month.
The Bottom Line
Think of these opportunities as a 3-point strategy to quickly re-focus your business, so that you can act immediately to not only survive but thrive in today's market. But what tools do you need in your "Expediter's Toolkit" to succeed for the long-haul, no matter what market challenges come your way? Stay tuned. That's what we'll address in the final installment of our three-part series on "Success in Expediting."