Thank you for the kind words about Expedite NOW.
I woke up this morning thinking about what you wrote and offer the following, not to be harsh, but to present more to think about. It is offered it not with you specifically in mind but also others who, like you, may be experiencing a significant decline in freight.
When you say you don't have the option of taking a loss on your trucks, are you sure about that?
Now that you are in the game, you are not alone in determining the outcome. You may not want to take a loss, but if freight declines in price and/or volume for a significant period of time you may end up taking a loss whether you want to or not.
It is incorrect to say that taking a loss is not an option. Taking a loss is always an option.
The difference may only be that if you choose to take it early, the loss will be less than if other people force the choice on you later. Those people may include drivers who leave the trucks in search of better paying jobs, the finance people who decide to repo the trucks, shippers paying lower rates (an option they have when too many trucks are chasing too little freight) and truck buyers who will pay less for an older truck than newer.
You mentioned another business you also have and feel the need to protect. I do not know the relationship you have between the two businesses, but an expediting business is best run as a stand-alone entity. Blending the needs of an expedite business with another business muddles the way you run both. Expediting is a truly unique endeavor. Better business decisions are made when the business is clearly seen.
If an expedite business cannot stand successful on its own, I don't know how another business that you own will change that. Nor do I know how an unsuccessful expediting business will protect another business.
Large carriers that have non-performing subsidiaries tend to jettison them as a stop-loss measure. Such decisions are made by groups of managers who do not let emotion or desire rule the day. Smaller operators are more subject to the need to be right, which can cloud one's thinking about taking a business loss.
Ask yourself, "What am I trying to be right about?"
Are you trying to be right about being a winning expediter, or trying to be right about preserving your capital and living to fight another day?
Are you trying to be right about about looking successful in the eyes of your friends and family that see your trucks and envy what you have, or are you trying to be right about what those trucks are doing to your balance sheet?
Are you trying to be right about being catered to by your truck dealer and other vendors, and being a big shot in their eyes, or are you trying to be right about balancing your equipment with your freight levels and driver retention ability?
Are you trying to be right about feeling important because you have drivers under you, or are you trying to be right about having the assets to keep yourself out from under your creditors?
I am not telling you to get out of the business. I am only suggesting that there may be more thinking to do before saying taking a loss is not an option. If your business is in a losing position, a loss absolutely will be taken. The only question is how much will the loss be and when will it be taken?
If you find yourself looking more at hope than at your numbers, the hope you maintain should be examined. These are not hopeful times.
Yesterday, General Motors said it did not have enough cash to see it through the year. General Motors! Unemployment is at a 14 year high and expected to go higher. Retail chains are going bankrupt and/or closing stores by the hundreds.
These developments are different than failed financial companies morphing into larger companies or people's home values going down. The strength or weakness of consumer spending (jobs), automotive companies and retail translates directly into freight or the lack of it.
This is not the end of the world. It is a severe recession. The good news is recessions eventually give way to the next phase in the business cycle that is expansion. But the recession will get worse before it gets better.
A positive mental attitude can make big differences when applied to things you control. It is meaningless when applied to the economy. Just as the rain does not care if you get wet, the economy does not care what you hope. It makes no difference to the economy if you succeed or fail or how you feel about either.
In a recession, hope is the mechanism that transfers money from the losers to the winners. Somebody is going to profit from the trucks you own. Whether it is you or someone else depends on the level of hope maintained and by whom.
If you are running a business on the hope that things will get better, your money will flow into other people's pockets. If you are running a business with good decisions and strong numbers, money will flow into your pockets because other people are vesting their hope in you.
People shy away from expediters that run on hope alone. But if you have a healthy balance sheet, banks will lend you money, carriers will give you freight, and drivers will sign on with you and tend to stay.
If hope for a better day is driving your business, remember that he who has the most hope loses. Put in another way, it is better to be profitable than hopeful. Put in yet another way, hope is for suckers.
In this economic environment, the option of taking a loss is very much on the table. If you are in a marginal or losing position now, hope will not change that. The need to protect a different business will not change that. And given the present economic outlook, a shift to better conditions is not likely to change that.
If you can take an objective look at your business and see a loss coming, the faster you abandon your hope, the less the loss will be.
Taking a loss is not a shameful thing. It is often the smart move and one people will respect and understand.
Last edited:
