Arkansans in Chicago

Recently, my beat led me to two North Little Rock natives who founded a startup in Chicago. Their service matches people with pickup trucks and vans to people and businesses that need bulky things "schlepped," on the customer's timeline with reasonable prices. Meet Schlep: the thing you wish you had the last time you moved.

Photo by Special to the Democrat-Gazette

John Godwin (left) and Hunter Riley, childhood friends from North Little Rock, have started a company in Chicago that pairs people with pickups and other large vehicles with customers needing items moved.

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Boyhood chums find market ready for Uberlike mover

By Emma Hurt

Arkansas Democrat-Gazette

When Hunter Riley decided to help his brother out by hauling art from his North Little Rock gallery to Chicago in his pickup, he didn't anticipate it would lead to an entirely different career path.

While there, someone heard Riley had a pickup and asked for help moving a credenza. Something soon became clear to Riley and his childhood friend John Goodwin, a fellow Arkansan working in advertising in Chicago at the time.

Growing up on Topf Road in North Little Rock, the two childhood neighbors always had a friend with a pickup. Not so for many people in places like the Windy City, they realized.

So they founded Schlep to match people with large vehicles and brawn to customers who had bulky items too big to be easily moved but too small to justify hiring a moving service.

"You're going to call on anyone with a truck and an extra set of muscles if you have something heavy to lift across town," said Riley, who has a background in international development and nonprofit and startup consulting. "We really formed a vision around that ... anyone with a pickup truck, a cargo van or SUV could utilize them in a way to make extra money."

"We consider ourselves part of the 'gig economy,' the idea that anyone can plug in through our platform and our marketplace, the vision that individuals with these resources could make extra money." Short-term rental company Airbnb and ride-sharing service Uber are examples of this kind of marketplace, providing platforms for part-time income to independent contractors.

Schleppers, as the movers/drivers are called, go through three levels of vetting before they can claim jobs: personality, professionalism and full background checks.

"The screening process is the most important part and the reason we've grown in such a particular way," Riley said. "It really boils down to 'are you comfortable with this person? Would you be comfortable with them in your home?'

"We're offering an independent contractor network for people to make extra money with the neighborliness from Arkansas, the idea that the person delivering your things is someone you'd want to have a conversation with," Riley said.

The company's tagline, "Your Neighbor with a Truck," encapsulates this.

"We're just two Arkansas boys bringing Arkansas values to a Chicago-based company," Riley said.

Once the pair started digging into the issue, it became clear that there were individual and business needs for this service. Event planners, interior designers and furniture stores previously had to rely on expensive and large moving companies and courier services often unable to handle quick turnarounds.

"We still Schlep for consumers who have a one-off need like for a move, but we primarily plan to make ourselves part of the local logistical business, insert ourselves into this ecosystem," Riley said.

"Prior to using Schlep, we would contract out our Chicago-area moves to different providers. This was costly and not scalable," said Schlep customer Michael Stone of Interior Define, a Chicago furniture store. "Partnering with Schlep provides us with the security and efficiency to handle any type of move and has really made a huge impact on our business in Chicago."

"Everyone wants to associate our business as the Lyft or Uber of," Riley said. "But we never saw that as the end-all, be-all of the company. We've adopted a hybrid model."

Independent contractors range from people with seasonal jobs and students to Crossfit instructors. These "Schleppers" get first dibs on jobs posted on the Schlep app, planned generally a week in advance, unlike the instantaneous Uber or Lyft. However, also unlike the popular ride-sharing services, Schlep has six full-time employees who do deliveries, promote and work events, and train independent contractors. Full-timers are relied on if no one is able to take a job.

All contractors are paid per move. Each delivery's price is determined based on how far something has to go and how many "obstacles" are involved, like a staircase or elevator. Riley estimates a typical Schlep is a sectional sofa moving about four miles with one obstacle, which costs about $75-$80.

"Honestly, I think it's one of the best workplace environments, because we [Schleppers] create it," said Josue Barrera, who has replaced two part-time jobs with a job with Schlep on his own schedule. "Yes, the standard set by Schlep is high in regard to quality, but I'm practically working for myself. I'm my own boss.

"I think of Schlep as a broker providing customer leads. I just show up and do the easy part -- lift couches, etc."

Since their first Schlep delivery on Sept. 1, 2014, the company raised investment capital and has now set a goal of $1 million. They currently handle hundreds of jobs per month.

"It is a great idea -- simple and beneficial for the community, especially on short notice," said Aaron Wolf, a part-time contractor and full-time outfitter and wilderness guide. "People love it."

Riley and Goodwin hope to expand the company nationwide.

"The ultimate vision is to really define the Schlep niche," Riley said. "We think this is a niche that doesn't yet have a solution. It's too often defaulted to people doing it themselves or having to spend way more money than they should."

SundayMonday Business on 08/14/2016

Print Headline: Boyhood chums find market ready for Uberlike mover

Rite of Passage for any Business Reporter?

...the first quarterly earnings story! Mine is about trucks and trains.

For those unaware, I recently moved to Fayetteville, AR to start a job covering transportation for the business desk of the Arkansas Democrat-Gazette. Needless to say, it's been a bit different than Southeast Asia. However, this paper has proven a great, stable place to start out a career as a business reporter, full of smart people willing to answer my many questions.

(Don't think I'm a total fish out of water though; NW Arkansas has a solid contingent of Lao and Thai immigrants. There's even a Hmong food truck!)

While I know you are all about to sign up for an ADG subscription, here's a preview:

Home / Business /

J.B. Hunt's earnings up 1.5%

Net income of 92¢ per share misses analysts’ average by 5¢

By Emma N. Hurt

Arkansas Democrat-Gazette

This article was published 07/19/16 at 5:45 a.m.

J.B. Hunt Transport Services Inc. reported Monday its second-quarter net income was up from last year, but for the second year in a row, the company missed analysts' earnings predictions for the period.

A net income of $105 million, or 92 cents per share, was a 1.5 percent increase for the Lowell-based company, from $103.4 million or 88 cents per share, for the same quarter of 2015. The company posted $1.62 billion in revenue, up about 5 percent from last year's $1.54 billion.

The average of 25 analysts polled by Yahoo Finance had predicted 97 cents per share for the second quarter. Revenue matched the average of 19 analysts' estimates.

The company lowered its expected earnings for 2016 to 7 percent, from a previous 9-12 percent projection, citing higher rail costs and "customer rate behavior." Shares dropped more than 4.5 percent in trading on the Nasdaq exchange Monday, after the release.

"I think basically the messaging is the pricing environment has become more competitive. Specifically there are probably customers pushing back on pricing because there are other transportation options. The greatest competition is coming from other trucking companies," explained Brad Delco, a transportation analyst for Stephens Inc. in Little Rock.

J.B. Hunt's intermodal revenue increased by 3 percent, from $904.9 million in 2015 to $933 million this year, rebounding to close to its 2014 levels of $930.7 million. The company explained that last year's issues with West Coast ports have continued to be mitigated, pointing to continued load growth in both its eastern and transcontinental networks.

J.B. Hunt is the largest intermodal truckload carrier in the United States, meaning shipping of freight containers using multiple modes of transportation.

The intermodal segment's operating income was down 11 percent to $105.6 million from $118.6 million in 2015, reportedly due to rail purchased transportation, equipment costs, insurance and claims, and driver recruiting and retention. Intermodal operating income now represents 60 percent of the company's total, down from 68 percent in 2015.

"Usually rail is a cheaper mode of shipping than truck, but because of a loose capacity in the trucking market, pricing has gone down so much that it is encroaching upon some of the intermodal demands," Delco said. In addition, rail companies have raised their prices to make up for a decline in coal output, traditionally a significant portion of rail freight.

J.B. Hunt's trucking division maintained about the same revenue as the previous year, posting a 1 percent increase with the total remaining around $98 million. Its operating income decreased by 9 percent to $8.9 million, due to "lower rates per loaded mile, increased driver hiring costs, higher independent contractor cost and increased tractor maintenance costs." The division also spent about $700,000 on streamlining and technology redevelopment.

The company's brokerage segment posted the most striking increase in revenue and operating income. Revenue was up 17 percent to $204 million, in part due to a 62 percent volume increase offset by lower fuel prices and change in freight mix.

Lower fuel costs have both hurt and helped the company. Its fuel-surcharge revenue accounts for less than 10 percent of its total revenue and fell 27 percent to $131.7 million. However, its fuel expenses decreased 16 percent to about $71.5 million.

The brokerage division's operating income increased 122 percent to $10.9 million, following last year's promise that the $4.4 million cost of streamlining and technology redevelopment in the second quarter of 2015 would pay off over the following two years.

Business on 07/19/2016

Print Headline: J.B. Hunt's earnings up 1.5%