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YRC has being going broke for almost as long as they've been around. I wouldn't count them out just yet.. they seem to have nine lives.
Surge Transportation - MC#518710 - FL - NOW YELLOW
- Thread starter tasuinam
- Start date
Was reading Surge's history, was opened in 2016, and did almost $150 million in revenue in the last few years. How is it possible? and how can a brokerage company go Bankrupt? very little expenses apart from office and employees in compare to a Trucking company.
Make me understand please if I am incorrect.
Make me understand please if I am incorrect.
Shakey
Site Supporter
30
Bad management that based their business plan on the last two years instead of the first five & half. They didn’t cut quick enough nor save enough for downturn.
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Very easily, which is why so many do. Truth be told, not all shippers are golden. Some don't pay their bills.. others pay them very slowly. It isn't hard to get into trouble that way. Just because they have alot of physical assets doesn't mean a thing.. its not as if you can sell their assets to collect.
About Surge's rise to 150 million in revenue. Say all you want.. they have good sales people.. no.. excellent sales people probably.
30
So very true. At 150 million in total sales, I am sure they had more than their fair share of bad payers. If, as the article suggests, they like so many other freight brokers, were paying their carriers before getting paid by their customers it is no wonder that eventually the bottom must have fallen out. Combined with draining the retained earnings with bonuses, special dividends, etc, etc. and sooner or later, they burn through all their cash. Asset heavy or asset light, it makes no difference if a company handles their cash poorly.
I dabbled in LTL but gave it up because getting shippers to pay their bills was awful. I might have just had a bad few but it felt like every single one was a fight.
Plus, all the different classes and surcharges. Every bill was 90 days+
30
the brass at companies like this make 250,000 usd plus commission plus credit card plus audi s-line plus cell phone paid for.
The longer i work in brokerage the more i see it as a multi level marketing scheme. People at the top always making more than you are off your hard work....
30
The people at the top, regardless of who they are, how they got there or what the particular industry is, always make more. There has to be a reward or incentive for those assuming all of the risks involved with starting or operating a business. Probably explains why a few dispatchers at smaller carriers decide to branch out and start their own transport company. The same can be said for the better employees at freight brokerages. I am a firm believer in paying your best employees top dollar. If that compensation isn’t enough or if the job isn’t challenging or stimulating enough, the answer is simple……go out and start your own. If it is successful, you should be adequately rewarded.
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I think this is a fraudulent bankruptcy. Even when paying the carrier partners faster than you're getting paid, there should be enough retained earnings to carry you. Unless they were acting like Wolf of Wall Street there.
Either way the real owner is profiting. I guarantee you the owner on paper is not the real owner.
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Not if you're growing that fast and you have a bunch of slow and no payers in the mix. I was very fortunate to have all of my accounts pay me in 7 days for the first five years in business. I still have the accounts, but all but a few now drag their feet on paying their bills.. its tough to pay carriers in seven days when your "professional customers with real offices and people in suits" pay in 90 days or more. Lucky for me I've been around for awhile and can finance my own receivables.. Would be a tough on someone just starting out.
Shakey
Site Supporter
30
30
@steventm I dont believe they have officially filed for bankruptcy
I had to get one shipment out of the Yellow system and pulled it off their dock in the Midwest on Friday. They charged $289 USD for the redirect, plus I'm dont think the Yellow invoice will be prorated and paying the charges from the carrier to move from Yellow to the consignee -- looking at a approx $850 USD loss on this move.
I had to get one shipment out of the Yellow system and pulled it off their dock in the Midwest on Friday. They charged $289 USD for the redirect, plus I'm dont think the Yellow invoice will be prorated and paying the charges from the carrier to move from Yellow to the consignee -- looking at a approx $850 USD loss on this move.
