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Carrier Profiles

CEO Profile: Expess-1

By Jeff Jensen, Editor
Posted Feb 26th 2007 2:17AM

mikewelch.jpgAmerican business is replete with stories of the hard-working  entrepreneur with a vision who, despite the competitive forces arrayed against him, finds a way to beat the odds and build a thriving business entity.   

One of those stories is still being written - the one of Express-1 Expedite Solutions, Inc of Buchanan, Michigan.  In less than two decades since its founding, this expedited carrier has gone from startup to a publicly-traded company that has carved its own niche in the emergency freight industry.

At the helm of this company is its founder, CEO and President, 44-year Mike Welch.

The company
Express-1 Expedite Solutions, Inc. provides transportation and logistics services to over 1,000 active customers, specializing in time definite transportation and offers a variety of exclusive use vehicles to a diverse client base within the United States and portions of Canada.

Express-1's services include expedited surface transportation, aircraft charters and expedite delivery. Its client base includes commercial printing, consumer staples, pharmaceuticals, and high-tech and major domestic automotive manufacturers. In addition, it serves third-party logistics providers, airfreight forwarders and integrated air cargo carriers.

Express-1 uses a fleet of independent contractors to provide most of its operating capacity. Supplementing this fleet are partner carriers who provide on-demand capacity for the customers. The company's vehicles include cargo vans, straight trucks and tractor-trailers.

In his own words
"I was born and raised in Michigan," Welch begins.  "I graduated from Western Michigan University in 1986 with a degree in Marketing."

"My first job was with a small truckload carrier in South Bend, IN  that "dabbled" in expedited freight.  I stayed with them for around two and a half years, working as a Sales Representative."

"As a sales rep, I considered expedited the better part of the business - the pay is higher and it's an interesting business because of the need for different equipment." 

The beginnings
Welch says that his company was experiencing some changes at that point, so it seemed to be an appropriate time to strike out on his own.   With the capable assistance of friend Keith Avery, he founded Express-1 in 1989 and located the fledgling company in a business incubator in Niles, MI.     

"In 1989, it didn't require a lot of money to get started.  Keith Avery and I went out and bought a couple of cargo vans and we were in business.  Keith was the Vice President and ran the operations while I handled the sales.   When it's a two-person/two truck company, you do a lot of the driving, accounting and other duties.  That gave us a good feel for what a driver or operations person goes through because we were doing it."

Reflecting on the company's beginnings, Welch says, "In the early days of the company, most of our shipments were picked up in the Northern Indiana/Southwest Michigan area.  At that time, the rates were built so the driver would come back empty.  It was an easy business because most of the freight was local and even if the driver came back empty, he was still making money." 

"Nowadays, a driver has to minimize those empty miles.  He can't afford the empty miles like we had in the late '80's/early 90's."

Welch says that to supplement the cargo van fleet, the company began adding straight trucks to the mix in the early 90's.

"We had company-owned trucks back then with company drivers and we found that this inhibited our growth.  We began experimenting with owner-operators in the mid-90's and now we are a 99.5% owner-operator fleet.  We still have 3 company drivers who have been with us since the early days who drive cargo vans and help us with some local business." 

He adds, "When we switched to the owner-operator model, we saw that it provided us with more qualified and professional drivers and that it gave us the ability to grow in different geographic footprints."

"To compete with the major expedited players of the day, we had to use good old fashioned sales and developing relationships.  We never wanted to be the lowest price and we borrowed the old Roberts Express approach in that we felt that this was a service that has value, so let's make sure we keep the prices up there."

"I believe it was our operations, our drivers and our ability to react more quickly than our competitors in our smaller market was a reason for our growth, but we stayed away from price competition."

"Also, we started early enough and with enough vehicles to give ourselves a presence in the market."

Growth patterns
Welch tells us how Express-1 developed as a family business:  "We continued to grow and in 1996, my brothers Jim, John and Bill joined the company.  Jim initially worked as sales manager, John was our Chief Financial Officer and Bill worked with the drivers and recruiting.  All of them had developed successful careers before then and it wasn't until that time that Express-1 was generating enough revenue to bring them on board and make it worth their while."

Welch says, "That took us to the next level.  In 1996, we moved the company from Niles to a 10,000 square foot facility in Buchanan, MI.  We expanded that in 2001 with a 10,000 square foot addition and we just recently completed our new recruiting/training facility - that's another 3,500 square feet in in area.  We can now continue to grow within our facilities for another few years." 

The technology
"Around 1997 we began implementing new software that included satellite tracking and that had a major impact on our growth. With this satellite tracking, our customers can track and trace their shipments online, receive automatic Proof of Delivery (POD) and event notification for things like pickup and delivery status through email." 

"Our owner-operators now have the Fleet Vision tool which gives them information about their runs - information  that they need to operate their business."

"We're goal oriented, we want keep the drivers' wheels moving.  Our new tote board (in operations) has been very successful in raising the awareness of those in operations about how important it is to try and move the driver and the truck every day." 

The CEO stresses that two things make Express-1 different:  "Number one would be our company people," he says.

"At Express-1, we have a total of 77 employees engaged in Operations, Safety, Sales and Recruiting/Training.  We don't have a lot of turnover in either our operations or our sales department.

"We have developed relationships with our customers and our owner-operators over the years.  We have people who are dedicated to setting their sights on helping the company grow and become the best that we can be."

"The number two reason for our success would be our owner-operators group.  We try to treat them as we would want to be treated.  We have a policy of very open communication and we do things like our company picnics, the annual awards dinner, etc.  We might not always agree, but it's always done with respect.  We don't publish our fleet size, but our fleet growth has averaged around 30 percent for the last few years."

"We have a great give and take between our employees and our owner-operators.  We couldn't do it without them." 

Looking ahead
"We are the only publicly-held company that specializes in pure, ground-expedited transportation," sates Welch.  Our owner-operators and employees have the ability to buy stock in their company and to be a part of it.  That's very exciting and we've had a number of owner-operators who have become stockholders who know that as the company grows, they will become even more successful."

"Our revenue projections are public knowledge and we're shooting for 40-42 million dollars in revenue this year (2006).  I can't point to a single spectacular year in our history, but it's been rather steady consistent growth over a number of years."

In conclusion, Welch says, "I think we've done the right things which have helped us grow.  Our culture was developed on a solid foundation - creating value for the customers and for the owner-operators and employees.  By keeping that premise, it all just magically worked and enabled us to get to this level."