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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Larry Hitchcock
Cheap freight = slow roll to bankruptcy. When costs are increasing and freight costs are decreasing there will be a correction in the industry. It makes more sense to park the equipment than run it for a loss and expect to stay in business.
Shedrick Williams
There’s NOTHING cyclical about all the low rates AND no broker transparency. You guys are the ones making the lions share of the loads delivered.
Steve berg
I should also say this is what happens when there is no loyalty to good honest operations and the only things that matters is who will haul it the cheapest. I sat many a time rather than feed into this by hauling freight for stupid low prices and would dead head 3 to 400 miles at times rather than take the rates they were paying.
Pope
Let me get this straight
No union
All owner operators
Out sourcing to 3rd world wages
And list goes on
But still going out of business
Sorry to all who will lose on this one.
Really am
The blame as always, falls at the feet of the one in charge .
Not the workers
Not the Union
Just bad luck, and Poor managment
Steve berg
I am so happy I exited as a carrier in December. I shut down my 4 trucks and finally sold them about a month ago. All of the stuff that happened to this brokerage, one I had hauled loads for in the past, seemed predictable to me but not his fault based on things I went through in 2022. Theft was on the rise and I knew it would only get worse as fuel prices rose and rates fell. I had $3000 in full siphoned from my trucks in the last 6 months I operated. Which is more than what I had ever had total in the previous 8 years. It became apparent that things were going from bad to worse and it was only going to get worse as desperation set in for the individual owner operator and he would do anything to try to stay afloat. Do not miss this Industry for even 1 second. So glad I am out I cannot describe it. Everything but the price of freight went up astronomically. The worst trucking market I had ever seen in my 10 years.
Blank
One less broker to worry about.
Wish they'd Stand Up
It’s ridiculous. What the truth is that you are allowing scam brokers to scare you into dropping your prices to your customers and then forcing it on the industry and then we all are forced to try and operate at a loss…I mean diesel the thing that makes amaericas trucks run is 4-5$ a gallon. Simple math on 100 miles is about $100 in cost (3-5 mpg at $4-5 per gallon). This doesn’t include ins cost of Carrier ($0.40-60 cpm) the maintinance (you know government shut down thing another $0.40-50 cpm) and the our operating cost and we can’t be under $2.25-$2.50 a mile, but we are being forced and with absolutely caveman mentality to run at $1.6-1.8 a mileage the normal metrics like melon season and $3-5 a mile to the carrier had brokers ripping us off at $2 a mile if we got lucky. The brokers are 1000% to blame for this and it’s a sad sad scam and it makes me sick that family owned and operated carriers have to shudder up because you guys want the biggest piece of pie to yourselves for pressing 2 buttons and hanging up a phone.
BobW
“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.”
‘ hopefully pay carriers’ …you would not have that money to divvy up , if not for the driver who actually performed the task. Why is the industry failing?… because all of you do not value the driver. You boldly state in the above paragraph, that driver…will be Last in line.