This opportunity is a Southeast Michigan-based interstate motor carrier. Its core business activities include dedicated contract carriage, multi-stop pickups, deliveries, and full-truckload and partial-truckload moves. The Company’s tractor fleet has averaged 25 to 30 tractors over the past several years, and it currently has 31 drivers servicing the Midwest, Southeast, and Gulf Coast.
The Company is split into two separate business entities, Logistics and Freight Management, that are being sold together.
The Logistics entity is an asset-based interstate motor carrier specializing in providing dedicated contract carriage with over 30+ years of management experience supporting 3PLs, automotive OEMs, and Tier I and II suppliers.
The Freight Management entity leverages technology, people, and equipment to navigate complex supply chains and create solutions for their customers. This entity is a non-asset based transportation company.
Founded in the middle of the financial crisis of 2008, the Owners have successfully navigated the fast-paced industry by constantly changing and adapting to the needs of their customers. The Owners have successfully run the Business for 13 years and have reached a point where they believe it is best for them and the Business to transition ownership.
Potential Buyers must have a minimum of $400,000 in available liquid capital to receive information about this opportunity.
Real Estate: Two offices are leased on a month-to-month basis, as well as two drop yards.
2020 Rent: $17,400
Seller Financing Available: Yes
Seller Note: Limited Seller-Financing Available for Qualified Buyers
Number of Employees: 5 Employees (3 Full-Time and 2 Part-Time), 31 Drivers
Year Established: 2008
Facilities: The Business operates out of two suites, both on month-to-month leases. The Company also leases two drop yards.
Support/Training: The Sellers are willing to assist in the transition to ensure new ownership is positioned for success. Longer-term involvement from the Sellers is possible depending on the circumstances and mutual desires of the Buyer(s) and Sellers.
Reasons for Selling: Started in the depths of the 2008 financial crisis, the Owners are very pleased with what they have built over the past 13 years. The trucking industry is fast-paced, with constant change and adaptation necessary. While the Owners have successfully navigated the waters of the industry for decades, they have reached a point where they believe it is best for them and the Business to transition ownership. The Business is on solid footing and will provide the new owner(s) with a profitable investment.
(1) Low Driver Turnover and Robust Driver Pool: The Company offers its 31 drivers a much more enjoyable experience than most logistics companies. This has reduced driver turnover to 30% instead of the much higher industry standard. According to the American Trucking Association, the driver turnover rate for small carriers, or those with less than $30 million in annual revenue, is 74%. The driver turnover rate for large truckload carriers stands at 92%, a rise of 10 percentage points on an annualized basis.
By providing a better work environment for its drivers, the Company avoids the time-consuming and expensive process of sourcing new drivers. This ultimately helps it provide higher quality and more consistent performance to its customers. The Company offers its drivers several perks, including a safety bonus, fuel discounts, weekly settlements, breakdown assistance, owner-operator insurance programs, and consistent work.
(2) Breadth of Services: The Company offers a variety of services that allow the flexibility to best serve customer needs. Its philosophy is to try to develop innovative solutions to meet its customers’ transportation needs. Knowledge of market segments and understanding customer expectations ensures the Company will continue to stand out from competitors.
(3) Customer Satisfaction: The Company has built a loyal customer base because it has prioritized service and pricing. By outperforming competitors and doing so at reasonable rates, it has maintained a stable customer base of Tier I and II manufacturers, consolidation centers, and third-party logistics providers. This is supported by the Company’s focus on contract shipping rather than one-time deliveries. This allows the Company to develop a long-term relationship that exceeds customer expectations with excellent communication no matter the circumstances.
Aside from price, competition is based on the quality of service, transit times, scope of operations, and reliability. The trucking industry must understand the Delivered In-Full On-Time (DIFOT) requirements that customers expect. DIFOT is important as it implies that a shipment will be delivered completely by a specified time and date. Service quality can be measured by frequency of service and capacity. Reliability is essential, along with on-time pickup and delivery in full.
(1) New Markets: The Company opportunistically explores entering new markets with demand for its services. For example, it has been building its footprint in the Southeast United States and Rio Grande Valley in South Texas.
(2) Value-Added Services: Many trucking companies have been expanding the range of services offered to secure their place in global supply chains. An emerging segment within the industry is the value-added services segment, including door-to-door transportation, customs brokerage, packing, logistics consultation services, and other related activities. Additional services include distribution, repacking, storage, and freight forwarding. It is expected that these services will increase as a proportion of industry revenue over the next five years. The Company could venture into some of these other services without significantly deviating from its core service offering.
(3) Redefining and Implementing Collaboration: Horizontal collaboration is already happening in the industry, especially with last-mile delivery, but it is hampered by inconsistencies. Higher levels of efficiency could be achieved by more consistent standards, defined through the Physical Internet and increased collaboration, whether in the form of alliances, joint ventures, or M&A activity. There are already notable examples of market players operating collaboratively. Companies like FedEx and DHL have been partnering with national postal companies and small local players for many years. But with the advent of new technology, collaboration can become much more dynamic. However, fragmentation, accountability, and lack of consistency make collaboration more difficult. For example, each company has its own labeling system, and some companies are wary of farming out the crucial last mile of the journey to an operator that may not reflect on its own brand and service levels. And aside from the last mile, partnering agreements are the exception rather than the rule. Take freight forwarding; while containers are a standard size, the packages that go into them are not, nor are the forms and digital entries used to clear customs. Contract logistics companies co-operate extensively with shippers but often do not share resources with competitors.
There are many other less radical ways for logistics companies to use assets more efficiently by collaborating, for example, by sharing fleets and networks and establishing agreements like the airlift purchased by postal agencies from commercial couriers or the code-sharing used by airlines.
Many companies in the sector are also turning to M&A, joint ventures, and alliances to achieve collaboration. M&A transactions continue to increase, with much of this activity driven by prominent players looking to expand their national operations and service offerings.
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Upon doing so you will receive a link via email to review and sign our confidentiality agreement. Once signed we will be able to further the conversation and send you the confidential Offering Documents. Please contact [email protected] with any questions. Interested parties must demonstrate proof of financial capability, sign a Non-Disclosure Agreement, and answer a few questions related to their background and interests. Inquire today about this contract logistics and freight management company for sale!