Developing a Niche 1

Triumph Business Capital

November 9, 2009

Niche Hauling: a geographic area, commodity, particular service, unique method, or specialized market for which a small trucking company is best suited.

For the small or start-up trucking company, the highway to success is to find a specific niche which is not filled by the more traditional, larger trucking companies. Under the current economic conditions, in the traditional truckload and LTL freight areas there more trucks available than freight, making this the lowest-paying tonnage. Trying to compete with the mega-truckload and LTL carriers with business models of volume hauling in which profits can be a mere penny-a-mile, can bring the best independent trucker to his knees.

So what are the solutions?

  1. Think regional: Find a commodity or service you can provide which encompasses the smallest geographic area possible. This reduces your fuel costs by placing you closer to your origin and destination points and reducing the distance if any deadheading is required.
  2. Think labor-intensive: Most truckload carriers haven’t any interest in loads which need special handling beyond the trailer doors and freight dock. Finding loads that require out of the ordinary care either in the trailer, on the trailer, or at the time of delivery will reap higher revenues to your operation.
  3. Find groups of shippers needing similar services: specific ways of securing the items hauled, disassembly and reassembly of equipment, crating and uncrating, etc. The more time spent in a trailer and the less time spent in the left seat of a tractor, the greater the revenue you earned for the time invested.
  4. Haul your passion: The more you believe in what you’re hauling the more care you will provide your customer. There are small trucking companies in business today that haul private individual’s motorcycles to rallies and shows, windmill blades for generating electricity, custom cars in enclosed car carriers, travel trailers, boats, cargo trailers, small trade shows and displays, children’s play sets, modular offices, and—well, just use your imagination.
  5. Become lean and nimble: One of the advantages you have over a large carrier is you adjust more quickly with the changing transportation industry. This changing industry includes fuel costs not abating any time soon; the requirement of special IDs to haul in and out of ports, the new attitudes of buyers concerned with how much energy is consumed bringing the products they purchase to market, and the adjustments shippers and receivers are making in how they do business with haulers.

For the small motor carrier, niche hauling is a necessity to its survival. The whole idea of positioning your company in this manner is to create a higher level of efficiency, better cash flow, and lower costs. This type of business model allows you to become the expert in your chosen area; whether it be geographical, commodity-specific, defined by service or unique method, or specialized market. Or it can include a combination of some or all of these attributes.

Next week I will provide with details on how niche hauling can be an excellent means of avoiding sudden shifts in the open freight market: but it comes with a  word of caution.

Good loads and safe roads, everyone.

Timothy Brady