Owner's advice: Diversify to succeed

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Some people follow a linear career path, scaling the career ladder to the top of their organizations. Others zig and zag, leveraging their perspectives from one industry to bring fresh insights to a different sector.

Case in point: Hunter Kosar, owner and president at Twisted Nail Broker Services, jumped into trucking without prior experience in the industry. His background was in mergers and acquisitions (M&A) and finance. But that skillset helped shape his approach to running a freight brokerage. We chatted with Kosar about what inspired him to get into logistics, and his advice to small fleets working with brokers.

— Interview by Shefali Kapadia, edited by Bianca Prieto

What inspired you to dive headfirst into trucking and brokerage without prior experience in the industry?

Trucking has a very low barrier to entry, allowing individuals to start a company with minimal capital but maximum effort. At the time when I started, I had minimal capital, maximum effort. I was working in M&A and am an expert in business/financial modeling. I pulled six months of receipts from an operator needing help assessing the health of their company. With those receipts, I made a financial model that suggested I could make money with a handful of trucks, so I took the risk.

How does your background in M&A and finance shape the way you run a trucking brokerage?

It influences everything, every stage. During my time in M&A, I was able to interview owners of similar businesses, learning the intimate details that led to their eventual successes. I was able to leverage those conversations when shaping my business. The skillset is extremely unique in the freight brokerage industry and provides me with a specific competitive advantage. I have been able to secure funding that is inaccessible to other operators, I am able to bid extremely accurately due to pricing models I've built based on historical data, I understand the importance of technology when trying to scale; ultimately, my background allows me to experience the industry from a different angle.

What's one thing you wish the small fleets and owner-operators you work with knew or did differently?

No one company should have exclusive access to your equipment. While it may feel calmer to have one customer, who is your only source of work, what you are doing is giving that individual the sole power to make or break your company. You cannot negotiate when you have one customer. You need to have multiple sources of income. Do not haul with brokers who unethically punish you for hauling elsewhere by leaving you off future dispatches. We tell prospective truckers, "We want to be one of your customers, but not your ONLY customer." This should be the mentality throughout the industry, but the temptation to accept and trust one individual continues to create an unsustainable market for small operators.

What's your No. 1 piece of advice to executives at small fleets operating in today's freight market?

Diversify revenue streams and improve fleet efficiency. Diversification in your customer base will ensure not only that you have a more consistent flow of freight, but that you have a much better understanding of acceptable market rates. Once you have established consistent, well-priced freight, then the name of the game becomes efficiency. That can come through technology investments but can also come from selecting lighter equipment (increasing payload per turn), or equipment with better fuel mileage. Growth doesn't always come from expansion; it can come through internal improvements as well.

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The Inside Lane is curated and written by Shefali Kapadia and edited by Bianca Prieto.