Market Overview

Commentary: Fresh Opportunities Bring New Entrants Into Asset-Based Trucking

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Commentary: Fresh Opportunities Bring New Entrants Into Asset-Based Trucking

An interesting trend is happening in the US trucking market. On the heels of some of the best years in the industry's history, investors and operators are coming from unlikely places and backgrounds, bringing a fresh perspective and a flood of investment dollars along with them. The record-breaking revenues of 2018 contributed to the demise of several asset-based trucking companies that expanded their fleets only to falter due to the rate declines of 2019. As some carriers shutter their doors, others are being born.  

(Photo credit: Instagram)

Jelani Hawkins, CEO of Fat Richard Trucking, LLC out of Houston, Texas, is an example. Hawkins has a non-traditional background for a trucking company founder, to say the least. Born and raised in south central Los Angeles, he went on to become a standout athlete – earning a scholarship to play Division 1 college football at San Jose State before going onto a multi-year career in the NFL with the Houston Texans.

Jelani Hawkins. (Photo credit: LinkedIn)

After football, Hawkins was a top-performing branch manager with Enterprise Holdings before leaving with a co-worker to found Squeezed Juice Company. The juice company wasn't an overnight success but through hard work and hustle, they grew the brand into a thriving company with revenues of more than $30 million per year. Through this process, Hawkins realized he'd built a career in logistics. "It didn't matter if I was moving thousands of cars, a few tons of raw vegetables, or hundreds of thousands of bottles of juice, my success – or failure – always came back to logistics." This epiphany made Hawkins think about opportunities in the space and reminded him of a teammate he once had who bought trucks early during his NFL career.

Hawkins was first exposed to the concept of truck ownership while he was still in the NFL. His teammate on the Houston Texans in 2003, Gary Walker, already owned multiple trucks while he was still playing in the NFL. Hawkins remembered, "Gary's outlook was ‘I have the capital, why not put it to work?' That got me to thinking, how much can a guy make off of a truck?  I used to think about that question a lot and after I left the juice business, I started looking into it."  

(Photo credit: Jim Allen/FreightWaves)

Running the numbers on an asset-based trucking business took him some time. "With all the information and data out there, I had a lot of work to do. After I modeled the business at scale, I knew I could make it work. I've always been a hustler and have never had a problem asking for what I want. So, I went to my network and started asking who had routes I could handle for them once I opened the business. The response was overwhelming. My network put me in touch with their network and the next thing I knew, I was running down to buy my first truck."  

Unlike many owner-operators turned trucking company founders, Hawkins worked backward from the customer needs to the revenue, not the other way around. "My insurance broker always tells me I'm going to be successful because I don't want to sit in the seat. It seems like a lot of truckers turned owners fantasize about driving the miles and being behind the wheel. We have big goals and the opportunity in front of us is massive; the last thing you're going to find me doing is driving cross-country every week. We have a company to run and that's what I'm all about."

Hawkins credits his experience in former endeavors for his confidence and early successes at his trucking company. "As an athlete, you study your opponent and you work on your craft. That's exactly how we've started so far at Fat Richards'. We assessed the opportunity, identified where we think we can win and now I'm executing that game plan. At Enterprise, it was all about volume and hustle, trucking is the same way. Nobody is getting rich off of a truck or two. You have to hustle if you want to win in this business, and that's exactly what we're doing.  

Hawkins and Walker aren't alone as the only former NFL'ers involved in the trucking business. NFL alumnus Jeraud Powers, Jasper Brinkley, Senderrick Marks, Chykie Brown and Shaun Rogers have all invested in or started asset-based trucking companies, according to Hawkins. These examples are indicators of a new breed of professional athletes turned entrepreneur. They just happen to be investing in trucking rather than restaurant chains, gyms, sports teams and movie houses like athletes before them. Amazon and e-commerce have educated us all on the importance and need for logistics, and these current and former athletes are simply investing in a growing industry and expecting big returns!

Image Sourced from Pixabay

Posted-In: Freight Freightwaves Logistics Supply Chain truckingNews Markets General

 

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