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BY OMAR SINGH, PRESIDENT AND FOUNDER, SURGE TRANSPORTATION Until recent history, all of the top brokerages have been profitable companies. This is not the case with all of the
investor-backed technology companies currently taking up market share, which leads me to ask the question: Is it better to be a technology company learning supply chain or a supply chain
company learning to adopt technology? There is an old joke in our industry: “How do you become a millionaire in the trucking business? You begin with a billion dollars and start a trucking
company.” I guess with what we are seeing in the current marketplace we should modernize the joke to “begin with a billion dollars and start a logistics brokerage.” Look, I get that it’s
sexy to be a technology company — to be a digital broker; I get that it’s noteworthy to take up market share and become a top 10 brokerage within a short period of time when comparing top
line revenue; I get that it’s cool to be etched in the annals of history for being an industry disruptor and changing everything. But, is it a disruption or just a distraction? I mean, at
some point, the bottom line matters more than the top line. I didn’t take many business classes in school, but I took one that taught me that the purpose of a business existing is to make
money — to be profitable. Any broker can get all the shippers that exist to give it all the business it can handle — $800 million worth — if it is charging less than the next competitor —
less than cost. I don’t actually think that’s disruption, I think that’s distraction from business fundamentals: Be profitable, have a positive bottom line — none of the other noise matters.
I’m all for fighting the good fight — don’t get me wrong. I remember feeling the high of my trucking company going from $4 million to $6 million to $8 million and trying to figure out how
to make it work; if only I can increase my revenue per mile by 10 cents and decrease my cost per mile by 12 cents, if only I could reduce my repair labor costs 20%, if only I could leverage
more volume for better fuel and tire discounts — then we will turn the corner. You stay in that arena and you fight until there is nothing left. It’s honorable. I can tell you something
else, though: Bleeding out until you lose everything, it doesn’t feel good; I don’t wish it on my enemy. TO CONTINUE READING THIS ARTICLE... ALREADY HAVE AN ACCOUNT? SIGN IN CREATE A FREE
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