niche freight

Finding a Niche: Freight that fits

“Don’t ever forget where you come from—that you had to work hard—regardless of how big you get. You see a lot of people get in the trucking business, then they’ll get a few trucks and start making pretty good money and the next thing you know, you don’t see ’em. The ones that make it are the ones that stay with it. They’re out there, still involved, regardless." —Darrell Beverly, owner, Beverly Transport

There’s a quote attributed originally to a Roman philosopher, and it’s been borrowed and modified by generals, business gurus and football coaches ever since—and it absolutely applies to owner-operators and small-business truckers who haven’t yet found the lanes or the markets to make them as successful as they’d hoped to be.

“Luck,” said Seneca the Younger, “is what happens when preparation meets opportunity.”

Seneca was a leading figure in Stoic philosophy, which teaches the development of self-control and fortitude—again, fine traits for a modern trucker to have.

Darrell and Erica Beverly aren’t famous for sitting around pondering the human condition, but they have plenty to say when it comes to building a successful small trucking company.

They are owners of Beverly Transport, a growing Mobile, AL-based steel hauler. But if you look them up in online trucking directories, you’ll find them listed as Beverly Transport and Livestock. What happened to the cows, you ask?

The answer is a case study in Stoic “luck,” or the good things that happen when experienced, hard-working truckers come across an opportunity, see the potential, and—to borrow again from the Romans—carpe diem, or seize the day.

Darrell Beverly began trading and hauling cows in 1981, taking them west out of Florida. But the livestock market began to fade in the Southeast, so after more than 20 years, he began looking for other opportunities.

“I had four cattle trucks and it was just hard running from can to can’t,” Darrell says. “The DOT would eat us alive out West. I love cow hauling, but I came home one week, sold my cattle trailers, and bought a flatbed the following week. It was kind of an experimental deal.”

Darrell leased-on for a year with a friend’s company to learn flatbedding before Beverly Transport got its own authority in 2012.

“It’s one of the best decisions we ever made,” he says now. “I’d never pulled a flatbed, but it didn’t take me but a couple of weeks to realize that’s the direction we needed to go to make a good living and expand.”

Success didn’t come overnight, of course. But as a lifetime resident of the Mobile area, Darrell recognized his best bet would be to take advantage of the heavy industry there.

Having local connections—or, as Darrell puts it, “knowing everybody in any kind of business” in the area—was critical to getting a good start. And driving the truck himself while Erica managed the business end allowed him to go into the steel mills and visit with customers.

“The best way to meet people is hauling in and out,” he says. “The more you go in there, the more people get to know you. That’s when we’d get to talking. I knew a lot of them already, but the more they see you, they see you’re hands-on and somebody who’s here to stay. And that’s when we’d get more loads offered to us. They see the truck, they see the name, and they know that I’m the owner. That’s the key.”

Growth

Darrell’s chances of success as a flatbedder were boosted by his marriage to Erica, who, as luck would have it, was a broker with flatbed experience, she recalls with a laugh.

The couple soon recruited some owner-operators to join them, then bought another truck, and another. But the real growth has happened over the last year and one-half. Beverly Transport has expanded its fleet from eight trucks at the beginning of 2015 to 24 today.

The rapid growth is the result of a big contract with the largest steel mill in the area. As Erica explains, the company had handled, through brokers, loads for AM/NS Calvert’s customers. AM/NS then approached Beverly about handling some moves within the plant.

“They had an emergency job that had to be done really quickly,” Erica says. “Because Darrell was there supervising, it was done very efficiently and safely. We performed, and they liked that. They gave us more freight, and their customers gave us more freight. It’s just ballooned from there.”

Asked about challenges, she readily cites finding drivers. Fourteen of the fleet’s trucks belong to owner-ops.

“It’s the selection process,” she says. “You find the ones that fit with what you do and the way you run. For the most part, we have drivers that stay with us.”

And understanding “the program” includes managing compliance issues. Erica points to problems with “senseless errors” such as a driver not wearing his seat belt. Beverly has implemented cash “rewards and consequences” for good and not so good inspections. As for hours of service, the company is still using paper logs while getting “familiarized” with requirements of the ELD mandate.

Beverly has also added two dispatchers and a safety manager and is having a website built. But cash flow, not surprisingly, has been the biggest challenge for a small company that’s growing quickly. Big contracts with the mill also come with demands for specialty equipment, for example.

“So we went out and bought three new dump trailers and put them to work,” Erica says. “We coordinate purchases with the mill.”

Cash flow

To help fund those investments, Beverly Transport has begun to factor its receivables.

“Express Freight Finance helped us out by working directly with our customers on billing and then backing us up with a credit line that would grow as we grew,” Erica says. “It’s a great relationship.”

The process is straightforward: The carrier hauls a load and submits the invoice and proof-of-delivery documents to the factoring company, which verifies the customer’s credit and then disburses funds.

The factor takes on the responsibility of performing credit checks and collections in exchange for a percentage of the invoice, typically between 1.5% and 4% depending on the factoring volume and the creditworthiness of the account.

“We factor almost all of our accounts,” Erica says. “We came to Express with a request from a customer to move 322 loads in a month, following a 200-load order just a few weeks before. I asked if they could handle such a big volume of work, and they took the bull by the horns and provided the credit line we needed to take on the job.”

Beverly Transport’s needs are typical of a small, growing trucking company that might not be able to secure a sufficient line of credit from its bank, explains Brent Gottlieb, Express executive vice president for sales and marketing.

“Using factoring over a traditional line of credit provides flexibility because [clients] are really only limited by the amount of invoices they have to submit,” Gottlieb says. “There is no regular loan payment with factoring because we get paid back when our client’s customer pays the invoice.”

This is in contrast to a traditional line of credit where the borrower regularly pays down the loan to keep it revolving, but will eventually run out of availability on the line and be stuck without cash flow, he explains.

Along with specialized equipment—dump trailers in Beverly’s case—hauling in a specialty niche often means other added expenses, as Gottlieb notes. This includes:

  • Equipment purchases as many contracts require newer equipment in order to do the job, which means a larger expense to the carrier to acquire the equipment
  • Higher pay for drivers with experience operating the specialized equipment and in working in more hazardous areas of operation
  • A more rigid and costly maintenance schedule because of the type of hauling and where the vehicles are hauling

But factoring is a tool that should be used only when needed, Gottlieb points out. He encourages truckers to shop around but to be careful about “splitting hairs” when the terms are very similar.

Beyond the spreadsheet, he advises that factoring companies differentiate themselves through services such as credit checks on customers and additional offerings such as fuel card discounts or load board access.

“Factoring allows trucking companies to comfortably meet these demands,” he says. “It is really peace of mind.”

Homework

In this data-driven age of trucking, there’s no reason to jump into a new market or lane without knowing  something about previous cycles for loads and rates and what to expect in the future.

While most truckers should be familiar with load boards as a source for freight or a place to post equipment availability, “that’s just a small, small portion of it,” explains Roxanne Bullard, director of research at Truckstop.com.

The technology provides tools that can be used to determine load density in an area as well as the number of trucks available for loads—both at the shipper’s location and down the road at the receiver—to plan the backhaul.

And, more to the point, that real-time information is stored and can be accessed and analyzed, both historically and to project future trends.

Truckstop.com and FTR together put out the weekly Trans4Cast, including a Market Demand Index that measures spot market pressure in regard to freight versus capacity. It also provides regional heat maps, revealing hot and cold spots regarding rates, capacity, and available freight; timely analytics of the current market as well as historical trending; and spot market conditions, including truck and load availability, load searching, equipment-specific rates, and load turnaround.

“This is something that’s overlooked by carriers; typically, our brokers are looking at this,” Bullard says. “But if you are looking to switch, obviously the flatbed world is completely different than the refrigerated world. You can really separate those and see where rates have been and where they’re going.”

Additionally, Bullard suggests that truckers looking for a new niche talk with other truckers and get more specialized information from trade associations.

Otherwise, she recommends that carriers take advantage of the profile information that goes along with a load board account. Complete profiles, including equipment type, preferred lanes, and insurance information, streamline the onboarding process on the customer side of the shipment.

Technology also can optimize routes and make fueling suggestions, generating substantial savings in time and fuel costs, Bullard notes.

“We see, especially for small carriers, using load boards just for freight is the way they’ve been doing it for years and it’s worked—but it’s not necessarily working for them now,” she says. “We encourage carriers to be open to new technology. Change is scary, but these changes are going to help you with your business, making it more efficient with better decisions.”

Managing Success

Indeed, understanding pricing has been important to Beverly Transport’s success.

While the market typically sets over-the-road rates, for more specialty work—such as the plant moves at the steel mill—pricing often comes down to the trust that develops in a good working relationship.

“We have a ‘word of honor’ with the mills,” Darrell says. “We make sure it works for them and us too without either one trying to rob the other. We look for a long-term commitment. We don’t want some kind of get-rich-quick trip.”

And Erica quickly dismisses the suggestion that Beverly Transport might be relying too heavily on the plant.

“It’s not just one customer. Being the preferred carrier for AM/NS has opened up doors to all the little steel mills around it,” she says. “You don’t throw all your eggs in one basket. And you always keep them rolling.”

As for betting on the success of the steel industry, the company seems to have a winning hand either way the economy moves.

“When the prices of the good steel drop, the scrap market goes up—so then we’re hauling scrap,” Erica says. “The market always moves; our loads just depend on which way it’s going.”

Both Erica and Darrell caution that success—and keeping it going— isn’t automatic.

“You have to knock on doors, in person,” Erica concludes. “Darrell never gave up; he kept going back. If you want something, go after it. It just takes hard work and persistence.”

Darrell agrees, and he suggests success is not so much what a trucker hauls as it is the way the business is run. “You can make money doing anything, no matter what you decide to haul, if you’re committed to it and you work hard at it,” he says.

And Darrell, in turn, credits Erica’s work.

“She’s the key to my success,” he says. “My wife oversees all the money going in and out. Really and truly, it’s all about having that person in the office that you can trust.

“And being married to her helps,” he adds, laughing.

Most importantly, one’s commitment to his or her business doesn’t take time off once there’s breathing room in the profit and loss statement.

“Don’t ever forget where you come from—that you had to work hard—regardless of how big you get,” Darrell says. “You see a lot of people get in the trucking business, then they’ll get a few trucks and start making pretty good money and the next thing you know, you don’t see ’em. They’re fishing or on vacation every other week.

“The ones that make it are the ones that stay with it. They’re out there, still involved, regardless,” he continues.

The Beverlys aren’t speaking Latin, but theirs is a pretty good philosophy for long-term success in trucking.

 

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