Industry Outlook

Just Dropped! Episode 2 of ExpediteNOW podcast

Sprinter vans in the expedite industry are all the rage. But do you have all the right info you need to get started?

Today's episode covers the importance of creating a business plan BEFORE you buy that van.

Follow along 👇👇 with Rob Podeszwa of Jung Express, and host Brandon Baxter, as they discuss the ins and outs of Sprinter van ownership within the world of Expedite. It's ExpediteNOW!

TranscriptL

Brandon Baxter: Welcome to the Expedite Now podcast presented by Expediters Online and Jung Express. I'm your host, Brandon Baxter. My guest is Rob Podeszwa.
Rob is a recruiter with Jung Express and he's here to discuss the ups and downs of running sprinter vans in the expedite industry. Rob, thanks again for joining me today.

Rob Podeszwa: Oh, you're welcome, Brandon.
Thanks again for us getting together and putting these podcasts together.

Brandon: Absolutely. We had so much fun the first time, we're back for a second one.
And with that in mind, you know, today's episode, we're going to discuss the importance of creating a business plan when you're running a sprinter van in the expedite industry. So, let's jump right into it. Rob, how do we get started with something like that?

Rob: Now, there are basically two parts to it.
There's actually putting the numbers down on paper and actually formulating and creating that plan. That's kind of part two. That we're going to talk about it at the next episode.
Today's episode, we're going to talk about the first part, which is researching. Getting those numbers. How do you come up with that information in order to formulate that business plan? One of the big mistakes that I see people getting into this industry is they put the cart before the horse.
They go out and they buy a van or they lease a van or they rent a van and then they start looking at companies to sign on with. Then they start looking at getting into it.
It's like, okay, I want to be an expediter. They go get the van and now they try and figure out how to become an expediter. Don't want to do that. No.
Do your research first before you take the jump into that van. If you rent a van, you are now locked into that payment forever. If you purchase a van, sooner or later, you should have it paid off.
Now, you're going to start making more profit and you can start planning other things with that money, which we'll talk about a little bit more. If you're renting, you're always paying that. Now, I'll get guys who will tell me, if I rent a van, now I don't have to worry about maintenance.
Every 30 days, I'm getting a brand new van. I don't have to worry about breakdowns because I'm always getting a brand new van. That's great, but you're also paying for that. 
Being an expediter, it's a lifestyle. It's not just a job. That van, that's your home away from home. You're living out of that van. You want to get that van set up the way you want. If you are every 30 days having to switch to a different van, that's going to be a pain because now you get everything set up the way you want. Now, you got to reset it up and reset up. I rarely ever see anybody be successful with leasing or renting.
Then you get into purchasing the van. Again, you don't just go out and just buy the van. Find out the numbers. Find out what you can afford, what is going to fit your business plan.
I get a lot of people that also overbuy on a van. They go out and they buy an incredibly expensive van and they have a massive van payment and it's not going to fit their business plan.
I've had guys already come in to me who just want to run local. They're seeing the numbers on the internet of what an over-the-road driver makes. They base it. They go out and buy this massive expensive van and they just want to run local.
I'm like, you're never going to make the money to make that van payment. You want to buy as large a van as possible that you will make sure you will have paid off within three years. I don't know people's financial situations, but it's very important to get that van paid off within three years.
That to me is very crucial because if you're doing this job properly, in three years you should have anywhere from 300 to 400 thousand miles on that van. You're going to probably have some major repairs. It's a lot easier to make those repairs if you're not still making a van payment.
I've seen guys, they take out six-year loans on vans. That's a recipe for disaster because in three years you're going to have a major repair, and you still owe three years on it. That's not good.
You're better off, and I always say as large a van as possible. Will a larger van make a little more money than a smaller van? Yes, but not enough to justify taking out an extremely long loan to it. Sometimes you're better off buying a smaller van that you get paid off quicker than overextending on a larger van.

Brandon: Let's talk, Rob, a little bit about what you should know from the companies that somebody might be looking to lease with, whether it's Jung Express or another expediter, wanting to understand what are the van requirements that you need to know about before you go out and get your van.

Rob: You want to do your research by actually talking to the different companies. You don't want to go by what a single person on the internet said that they do because that's only for that particular person.
Talk with the companies that have dealt with a lot of people that have a better feel for everything. That's where you want to get your information from.
Some companies will require you to have a three-pallet van. They're going to want you to have 12 feet of cargo length. Some might only require a two-pallet van. Some require that you have to have a high-top sprinter style van. Some don't. They're okay with the older style cargo vans. Again, find out what they want so that if there's a company you really want to sign on with, make sure you're getting a van that's going to be okay to them. That's going to fit.
Some companies have different age requirements. Find out all of these things and then start researching your van and figure it out that way.

Brandon: As a potential owner-operator, what kind of numbers are important for you to know about before signing on, before signing that contract with a company, with a carrier?

Rob: Talk to multiple companies so that you get averages and everything. Figure things out with it. When you're talking to a company, find out what is their average paid miles? What are their drivers averaging? I always say you want to look at averages over a year's time. You don't just look on the internet and see, hey this person did this many miles in one week and then expect that that's going to happen all the time. It's not. That's not the case. You have to look at this long term because there are highs and there are lows. This industry is a roller coaster ride. It can be busy; it can be slower.
You need to base your plan on what the averages are. Find out what their average paid miles are. Find out what is their average deadhead, percentage deadhead. For those who don't know, deadhead is unpaid miles. There's always going to be some deadhead involved with being an expediter. That's the way it is. Find out what is their percentage.
That percentage deadhead also corresponds to what are they recommending, how long you stay out on the road. I always tell drivers you should plan on staying out for at least three weeks at a time. Ideally four to six weeks at a time, but at a minimum three weeks.
I tell drivers if you want to be home sooner than that, that percentage deadhead is going to jump up exponentially, dramatically because you're always wanting to go home. Companies can never guarantee you a load home in the time frame you're looking for. Then if you're deadheading home a lot more, you're going to incur a lot more deadhead. I'll get drivers who tell me, yeah, I want to go long, I want to be over the road, but I want to be home every weekend. I'm like, okay well I told you you're going to average this for deadhead, no, it's going to be up here and that's going to affect your bottom line.
You want to find out those types of numbers also. That's the other reason why you want to calculate that deadhead. You want to figure out how many miles a year you should be putting on that van. Then miles per gallon, figure out how much your fuel costs are going to be. Again, these are all numbers that need to go into your business plan in order for it to make sense.
People will call me up and all they want to know is what's your rate per mile. It's like there's so much more to it. I always say not every company is for every van, not every van is for every company, because we all do things a little bit different.
Find out the companies you're interested in. Find out what is. How do they pay? Do they pay a percentage? Do they pay a flat rate? How often do they pay? Look at the big picture. Look at the fees. Different companies are going to have different fees. Some charge no fees, some charge minimal fees, some charge high fees. Put that all together. Find out all of that information again so that you're having good accurate numbers.
Again, don't go by what somebody says you can make up to. What is the average? Look at what the averages are. That's what you want to base your plan on.
Some companies you can get the insurance through them. Some companies you have to get the insurance on your own. Find out what are all of those costs involved with it. Then you get insurance quotes. Again, those are numbers that you need to put into your business plan.
If you're doing this job correctly, you should be putting on at least 120,000 miles a year on that van. That means you're doing 10 years’ worth of maintenance in one year. You need to plan accordingly for that. You're going to go through tires quicker. You're going to go through brakes quicker.
Now granted, you're mainly doing highway miles, but you still need to look at all of these costs with it. Windshields. You're doing 120,000 miles a year on the van. Sooner or later, you're busting a windshield. Back when I drove, I went through one windshield a year. It's just natural.
You're going to get hit with a crack. At some point in time, somebody's hitting it. That's a big piece of glass. It's not a cheap windshield on these vans.
These are all things that you need to factor into. Back when I drove, I literally budgeted $400 a month for maintenance. Tires on these vans aren't cheap. I would get some people that would tell me that I would always put on really, really good tires. Again, this is my van.I got a lot of weight in there. I would spend a good amount on tires. I had other people tell me, you can get them a lot cheaper. Then I would get three times the wear on the tires I'd put on versus them. To me, it was worth the more money. Again, these are all things to look at with it. Things to budget with it.
I tell people for every 100,000 miles that are on that van. If you buy a used van and there's 100,000 miles on it, chop that by a year. Now you better have it paid off within two years. You need to start thinking about replacing it. Again, because once that van gets to between three and four hundred thousand miles, on average, that's when it tends to start you have to make some major repairs with it.
If the van is paid off, it now gives you the option. You can either repair it or you can replace it. If you still owe a ton on it, now your only option is to repair it. You need to have in your business plan, replacing that van down the road. Again, it's your moneymaker.

Brandon: This is a part one.
We're going to come back. We'll do a part two on building the business plan. Really, the last thing, as many times as you've mentioned, and I love the way you put it, expedite is indeed a lifestyle.
Part of that lifestyle is living in the vehicle. For a Sprinter van, you are living in the vehicle. Talk a little bit about outfitting the van.

Rob: Again, it comes down to people's financial situations. I have some drivers, they just throw a cot in there with a couple of totes and go the bare minimum. Other ones will spend $10,000 and make it into a small apartment, like you said, with moving walls and stuff like that. Some great stuff. It depends on your financial situations, and it depends on what you want to do.
It also depends on the age of the van. If you buy an older van, you don't want to put a ton of money into it because you're going to be replacing it sooner. You do want to make it comfortable. If it is not comfortable for you, again, you're not going to be happy out there. You're probably not going to stay in it very long.
Also, whether you decide to insulate the van or not. This is, again, something to consider because you should be sleeping in the van. You don't want to be paying hotel bills all the time. Again, I get drivers that come to me and, again, they've already bought a van. They decide they want to be an expediter. I'll talk to them about sleeping in the van, living in the van. They're like, oh no, I'm not sleeping in the van. I wouldn't do that. I'm staying in a hotel. I'm like, you ain't making it. You can't stay in a hotel all the time.
Back when I drove, I had limits because there were certain times where I had to stay in a hotel. If it was going to be below 20 degrees at night or if it was going to be above 80 degrees at night, then sometimes I would stay in a hotel. If it was between those, I would force myself to stay in that van.
With the business plan, and again, this is so important for people, they have to understand they're starting a business. You have to get that business up and running. You need to sacrifice in order to get that business up and running.
Once the business is established and you have some financial security with it, well now you want to start doing some extra things. Great. Put in the time, put in the effort, get that business up and running.

Brandon: Alright, well Rob, is there anything else you'd like to share before we go ahead and wrap this up?

Rob: No. Again, I thank everybody for watching. Hopefully we're giving you some good information.
We have a number more episodes here to help you decide if this lifestyle is correct for you and how to be successful at this lifestyle. Hopefully you enjoy it and get something out of it. Very good.

Brandon: Well Rob, thank you again for joining me today. This has been Expedite Now presented by Expediters Online and Jung Express. I've been your host, Brandon Baxter.
Until next time.