Like many other companies in the less-than-truck load (LTL) freight industry, SureXpress owned its own fleet of vehicles. However, as its trucks aged, breakdowns caused rising maintenance and repair bills, combined with increasing downtime and late deliveries, prompting the company’s owners to reevaluate their options.
Setting a Goal
Sure Dispatch and LabXpress merged in February 2005, creating SureXpress. Based in Oklahoma City, the company provides freight services from small parcels to full truck loads across Oklahoma, northwest Arkansas, and portions of north Texas.
“Our goal is to be Oklahoma’s ‘one-stop shop,’”according to John Batley, chief operations officer and co-owner of SureXpress. Not only is the LTL freight business hard on trucks because of frequent stop-and-go city traffic, the need for an aditional vehicle on short notice is an issue.
Since two of SureXpress’ also three partners are certified public accountants, they decided to run a detailed analysis that considered everything from cost per mile and depreciation to operational efficiencies of having a company fleet.
Their analysis concluded that renting the right-sized trucks only when needed was more cost effective than maintaining company vehicles.
A random sales call to a SureXpress location by a Enterprise Commercial Trucks representative resulted in a look at what Enterprise could offer. Enterprise Commercial Trucks specializes in providing daily, weekly, and monthly truck rental services to business.
“Using direct cost figures, we compared Enterprise’s cost per mile to our cost for maintenance and repairs and found that over the course of several months, we would be ahead by considerable dollars utilizing rental trucks,” said Batley.
“The bottom line is that we’re in the freight delivery business, not the fleet management or truck repair business. However, we were spending way too much time and money owning and maintaining a fleet, including losing a lot of time due to breakdowns and paying a lot of money to hang on to some older trucks that we only needed occasionally,” said Batley.
Succeeding with Enterprise
Renting trucks has enabled SureXpress to save money by freeing up the company’s line of credit. “We have reduced our overhead considerably by using our line of credit for expansion and growth instead of tying it up in a nonrevenue-producing, depreciable asset like a fleet of vehicles,” said Batley. He added that not having to manage a company fleet also means that SureXpress has more time to service customers and increase business.