After 26 years in the transportation industry, with the past 12 years at the helm of the logistics company he founded and bootstrapped in 2011, Dennis Martin says he is winding down operations.
In an exclusive interview with FreightWaves, Martin, CEO of SEL Supply Chain Solutions (SELSCS) of Fort Worth, Texas, said his year started off with a $700,000 load of video poker machines being stolen in Las Vegas and “everything went downhill from there.”
“I would describe this year as being the year of fraud, theft and abuse, starting out with that $700,000 load stolen, then insurance goes up and costs go up,” Martin said. “After a solid year in 2022, where we generated $64 million in gross revenue, we lost 40% of our business this year for whatever reason.”
The death knell for his freight brokerage was when Martin’s bank started placing restrictions that limited the company’s access to capital on a daily basis.
“Our bank kept moving the goalposts on a daily basis,” Martin told FreightWaves. “We were unable to come to an agreement with our bank on our day-to-day cash flow needs for various reasons.”
At its peak, Martin said, 125 people, including 45 independent freight agents and a back-office support team in Honduras, were involved in the daily operations of SELSCS.
This week, Martin and his team are winding down the company and working with the bank to make sure that they get all the receivables they have pledged to cover and to work with the bank to hopefully pay carriers.
“I hate this for the carriers and their families for what they are going through this year with a major drop in rates and freight volumes,” he said. “Our hope is to get them paid.”
He’s also working with another logistics company to hire his independent agents and other staff. Martin also plans to sell the company’s headquarters in Fort Worth to again try and pay carriers that are owed money for hauling loads for SELSCS.
“Every year in this business has been challenging but without a doubt this has been the most challenging year I’ve had with everything that we faced with double brokering fraud, stealing loads, stealing carriers’ identities,” Martin said. “I’ve had my rate confirmations falsified and sent out to carriers and then I get carriers calling me looking for money and I’m like, ‘Well, you didn’t haul one of my loads, you were defrauded.’”
Martin originally founded Smith Eagle Logistics but rebranded the company to SELSCS in March 2022. The company provided third-party logistics services for refrigerated, dry van and flatbed freight throughout the United States and Mexico. Some of his major accounts included Home Depot, Kraft Heinz and Mike’s Hard Lemonade.
“It’s a cyclical business and I did everything that I needed to do to keep the company afloat because the last thing I wanted to do was close, but there’s just some forces out there in the market that not everybody’s gonna survive,” Martin said. “I’ve been doing this for 26 years and no one day has ever been easy in this industry.”
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Boo Bear
Dennis…. Come on, this isn’t the whole story. Doesn’t add up, what about our 2 largest agents leaving in 2022?
Sconnie
I stepped off the ledge and sold my 20-truck fleet in May 2023. 33 years and it ground to a halt as our “good” direct customers abandoned us for cheap broker trucks. It was tough to decide in May, but I’m so glad I did. The industry is ruined by truck brokers and foreign drivers. Regarding Convoy; the Amazon model is the same. Foreign driver who do not speak English using an app. The driver is the head of safety, drug testing, maintenance, dispatch, etc. It’s a recipe for disaster but flourishes under the watchful eye of the FMCSA.
Sales Guy
As I understand it there are roughly 530,000 trucking companies in the United States, of those 97% are carriers with fleets under 10 trucks. In the 1st quarter of 2023, it was reported 9,000 carriers went out of business. Is that a result of “Brokers” or poor business management? It is the responsibility of the carrier to check the brokers just as the brokers are responsible for practicing their due diligence in checking the carriers they hire.
As for transparency, exactly what is that? Do you want to know the profit margin on a load? Great!!!! The markup on a load is not an indicator of the profitability of a company. There are expenses. You have the cost of staff, rent on a building, utilities, and insurance. What about the profit margin a carrier makes? Should a shipper ask what the driver is being paid? What if the shipper decides that the driver is making too much? Can they adjust the driver’s wages? Of course not. If they agree to a rate they need to pay it no matter what the driver makes, no matter what the truck costs, no matter the operating costs of the carrier.
Carriers especially owner-operators, need to learn how to run a business and they are the ones responsible for taking cheap loads. If you want to stop cheap freight then it’s on the drivers to say NO. When I started as an owner-operator I had to show the Californian PUC what my rates were and all of my personal and projected business expenses would be and I had to have 45 days of expenses in the bank.
Now anyone can buy a truck file for authority and buy 30 days of insurance because they think there is a ton of money in this business. Those people are as dumb as my ex-wife that didn’t understand that fuel isn’t free.
Concerned Citizen
I’m not in the trucking industry but had to leave a comment after reading the article & everyone’s comments.
It sounds to me like the trucking industry has been going down for a few years now. It doesn’t matter who’s to blame or why it happened, all that matters is we save it now and bring it back to what it once was.
I’m my opinion, nobody has stepped up to offer help, solutions or even a table to sit down & talk about the change that needs to happen.
In one of the comments, the government was blamed. I don’t know how true that statement is but maybe if you went at them with suggestions instead of blame and had an open discussion you all might get somewhere.
It has to start somewhere so why not write your Congressmen/women along with your Senators and The House of Representatives. Write to not only the Federal level but also the State level. Maybe you can get them all to an open discussion.
We need to work together which means two things to me: 1) Everyone HAS to be willing to listen to suggestions & new ideas. 2) Compromise & Change – its NEVER going to be only 1 way. That’s where the compromise comes in. Then because of compromising on these new ideas & suggestions, there’ll be changes. I know I hate change but change is inevitable especially when implementing new ideas & suggestions.
Like I said, I’m not in the industry but if lots of owners are losing their business – for whatever reason – then it’s time to make good, positive changes to bring the trucking industry back to what it once was!
Thank you for letting me speak my mind & hopefully sparking some of you to think outside the box to save this very important industry!
Bill O'Neil
Hey Bub Trucker regulate brokers?? Brokers are regulated, if you don’t like the rate they offer then don’t haul the load. If they don’t have good credit then don’t haul the load. If they are rude to you then don’t haul the load.. Now that’s regulation that works.
Now if were only so easy for brokers to regulate carriers and drivers trucking would be a dream industry!
Not Buying That Story!!
First, how is a stolen load causing brokerage insurance to rise? How is the $700,000 impacting the brokerage??
Second, the brokerage stopped answering calls from carrier, factoring companies, collecting companies several months ago when the first compliance company canceled them and claims started coming in.
Third, how is the story that was told to another source where the brokerage was blaming Convoy for their issues fall into place?
Fourth, how can the brokerage claim to be working or have the hope to get carriers, factoring and collecting companies paid when they make no attempt to respond to payment request directly from them, or now even their compliance companies??
Fifth, none of these issues stopped the brokerage from moving loads up to ONE DAY before this article was published. ONE DAY!!
Make it make sense Dennis!!
EddieR
Shocked at all of the people on here who think brokerages take home the “lions share” of a load. Simple math says that 15% isn’t the “lions share”. If you think that most brokers make more than that you’ve been lied to or haven’t done your due diligence in understanding a brokerage business model. Stop with lazy “blame the broker”, most of you guys saying that couldn’t even procure a customer relationship if you tried because you have the my way or the highway mentality. We all work together to make this work- the low rates are hurting EVERYONE and brokers aren’t the ones causing a decline in RPM. Trust me- those guys don’t want RPM to go down either.
Bub trucker
We all knew for that for years, I’m glad jumped of my truck in time high diesel prices, truck repairs, cheap loads… TQL are getting richer.
B1 foreign truckers getting our loads TQL pays them less because they don’t live or operate in the US, safety and dispatch are not even in the US, one company had them in Colombia.
That’s your problem here how can you compete on that.
US trucking industry it’s a joke. And the government won’t do anything to regulate brokers. Diesel prices are raised to help other nations on war. So we are left alone.