We move refrigerated food, fresh and frozen. Cross country, from suppliers to Distribution Centers, in all 48 states.
I have been doing this since 2007 and running my own operation since 2016. The pandemic has not been an issue for us. 331 Million people eat on a daily basis, and we transport that food.
Our customers do everything from bagged salads for Whole Foods and Trader Joe to gluten free pizzas. We move fresh strawberries and blueberries. Frozen bread and fresh meats.
In a nutshell, if you eat it, we move it. Our focus is mainly long haul cross country.
These are the most difficult loads and the most profitable. We bring it from the source to the Distribution Centers of Walmart, Aldi, Shaws, and any grocery store chain you can think of.
I have spent almost 15 years as a driver and started running multiple trucks in 2011 while at Prime Inc, one of the largest refrigerated operations in the country. My fleet was usually 6 or 7 trucks. We ran both team and solo trucks. My 7.5 years at Prime taught me a lot of the moving parts of this business. My time since 2016 running my own Authority has taught me even more. It is now time to take this knowledge and apply it to scaling up this fleet to 10 trucks and trailers.
One truck is capable of generating 250-300k in revenue per year.
Insurance, fuel, maintenance and labor are the main costs. There is tolls involved as well, given the range we cover.
Fuel is our largest variable expense. Having quality trucks that can get 8+ miles per gallon of diesel is crucial.
I use a fuel card that gets us between .50 to $1 off the pump price of fuel. You also will take advantage of a good price to fill the truck to maximum gallons.
The weight of your freight is also quite important, as that can have a significant effect on fuel mileage.
We rarely carry over 30,000 lbs. This allows us to maximize our trucks efficiency and it also offers less wear and tear on the equipment.
We do not suffer any loss of revenue following this path as our customers will often pay us a premium over spot rates due to our on-time deliveries, no damage to their products and communication at all times during our trips.
Drivers are my most important asset. Being a driver myself allows me to understand to a great level, what a driver requires.
To that end, I pay my drivers well and I make sure they get home on a regular basis. They drive good trucks and I dispatch everyone myself. Knowing the ups and downs of weather I will keep them in good weather the majority of the time. This benefits our safety record and as such, insurance costs. It also makes drivers and customers happy.
I currently have an excellent opportunity to get ten trucks that meet the specs I require. I will also get 10 trailers with new refrigeration units on them and be running all ten within 90 days of the funding I need.
I would expect conservative revenue numbers to be 250k per month.
Margins after all costs would be 30-35%
The one exceptional aspect of this business is the consistent nature of it. With a population that never wants to go into a grocery store and see empty shelves.
Autonomous trucks and vehicles are a potential risk component. However, their absolute difficulty of ever reaching a Level 5 capability makes me a bit less concerned.
A Level 4 truck which still requires a driver to attend to it offers no advantage in costs or time of delivery. I honestly feel that if we look at the example of Waymo in Chandler Arizona
it may offer a good example. One might ask WHY has Waymo not scaled up this service? From what I can tell it still loses money hand over fist. It requires four humans to attend to each unit that is at work......so, no benefit of cost savings. It is seriously geo-fenced due to the difficulty of actual driverless vehicles. And this is a car, not and 80,000 lb projectile moving on interstates at 70 mph. If it is so difficult to move a car at Level 5..........it is a significantly more difficult task to move a truck. A truck that is going through wind, rain, snow and ice......night and day.
I firmly believe we are still a long way from seeing our freight run on driverless trucks. In fact, we may not see that day for decades.
With an investment of $500,000 I will get 10 trucks and 10 trailers. I would offer a 12% rate and pay interest only on a monthly basis. The entire investment would be paid back in 12 months. So, $5000 per month and the initial $500,000 on the one year anniversary.
Please feel free to contact me with any thoughts or questions.
Tom Couchon
[email protected]