It’s never been easy for Karen A. Pelle. Not when she was a mother of two young children undergoing a divorce and a foreclosure on her home in the 1970s. Not when she began her company 15 years ago and a partner walked off with $150,000.
It’s not easy today, either, ordering truckers where to go. But Pelle has built her trucking brokerage, Brea-based Megatrux Inc., into a 23-employee operation with $23 million in revenue last year. Her firm connects clients looking to move cargo with independent truck drivers and fleet operators. Clients include Walt Disney Co. as well as Japanese electronics makers Pioneer Corp., Hitachi Ltd. and Teac Corp.
Industry newsletter Transportation Intermediary said her firm is ranked in the top 10% of high-volume transportation intermediaries nationwide. Working Woman magazine ranked Megatrux No. 483 on its list of the 500 largest woman-owned firms in the country and it was 15th on the Orange County Buisness Journal list of the largest in a traditionally male-dominated industry at that.
“I’m one of those people who gets things done,” Pelle said. “There are a lot of cynics out there,mostly men who won’t take the risks themselves. I’ve made believers out of a lot of people.”
Now the 54-year-old Pelle is looking to go beyond just brokering trucks to operating her own fleet in the brutally competitive trucking business. She recently bought eight trucks, with another 12 expected by the end of the summer. She’s expecting to hire at least 40 drivers by the year’s end.
But Pelle is expanding in an industry facing a number of problems. Consolidating fleets and higher fuel prices are reducing profits. Congress is threatening to limit the number of hours truckers can drive, something that Pelle expects could drive shipping costs 25% higher. At least one truck manufacturer is cutting back on production. There’s even talk of declaring diesel fumes a toxic chemical that can lead to cancer.
Pelle laughed when describing how Time magazine recently said trucking is one of the 10 businesses not to be in. Still, she’s driven by what she sees as unmet industry demand.
“There’s a tremendous shortage of available fleet to transport customer goods the right way, especially in California from June through November,” she said. “When the produce is running, those trucks are no longer available.”
Pelle currently owns three companies. She is majority owner of LTL Consolidation Co., an industry freight warehouse in the city of Industry that employs 10 people. It does about $8 million annually in business by specializing in high-value shipments sent directly to customers, rather than distribution centers. Then there’s her new trucking company, Megatrux Transportation Inc.
Megatrux the brokerage is the cornerstone of Pelle’s business. At its nerve center,a small office in Brea near Imperial Highway and the Orange (57) Freeway,employees are constantly on the phone talking to clients or truckers. Clocks on the wall identify different time zones across the country. Pelle’s office, what she calls “my little bubble,” overlooks the chaotic scene.
“It’s like a stock market in here,” she said. “At times, it’s so noisy.”
On any given day, Megatrux fields calls from customers across the country.
“If somebody calls us from Chicago and wants a truck to go to North Carolina, we’ll do it,” Pelle said. “If somebody calls us from Florida and wants us to go to Mississippi, we’ll do it. Do you want a van, a flatbed, single, a team,when does it have to be there?” Pelle said.
“She’s cool,” was the reaction of David Conway, operations manager of a Woburn, Mass.-based freight company, Champion Transportation.
Megatrux comes through “at the drop of a hat,” he said. “On occasion, I’ll get a last second notice to move equipment out. I call the folks at Megatrux. Within a half-hour, I’ll have a truck sitting under the load. I don’t know how they do it. They’re very good.”
Pelle first entered the business in the 1970s as a 22-year-old answering an advertisement for a secretary for what at the time was a good salary,$1,000 a month. There she learned the ins and outs of the business.
Pelle wanted a job in sales, but felt she was given the cold shoulder because she was a woman. She eventually joined a company called IML Freightland of Orange. But it was a tough time for trucking firms since deregulation of the industry was just beginning and routes no longer had to be bought. The company went bankrupt. From that, Megatrux was born.
“My customers didn’t have a home,” Pelle said. “I opened a business. It was great.”
Well, not entirely great. Shortly after starting her firm, Pelle discovered her partner had taken the company’s money. It could have been a devastating blow, but she vowed to get past it.
“I put my nose to the grindstone,” she said. “I repaid everybody every penny that was stolen. Sometimes I don’t know what’s wrong with me. You just plug,” she said, before looking off to the side of her office and adding, “I hate to sound whiny.”
One of her key clients then was a little-known franchise called Home Depot Inc. Back then, it had only eight stores. She set up in a portable office on the back lot of its distribution center in Fullerton.
“There wasn’t even a toilet,we had an outhouse,” she said.
Pelle and her two assistants managed Home Depot’s nationwide freight back then. They had to make sure the products were delivered to the stores, no matter what day of the week it was. Home Depot executives were extremely demanding and tough, she said.
“It was very exciting. It felt good to be a part of it,” she said. “As Home Depot grew, we grew.”
But eventually Home Depot began its own logistics department, so Pelle told her employees they’d have to look for other clients and gave them incentives to do so. While the trucking industry consolidated, her company found a niche.
“The (consolidated companies) haven’t paid attention to staff,” she said. “They have lost their personal touch with the clientele. It’s an opportunity for a broker. As long as people want customer service. there’s an opportunity.”
She pays close attention to her staff, introducing each one to a recent visitor. Last October, a particularly demanding month in the industry, she held a luau for employees and personally selected an aloha shirt for each one.
Over the years, the biggest obstacles that she’s had to overcome are the people who don’t pay their bills. Even though she does regular credit checks on companies she deals with, some customers go bankrupt without any warning, leaving her firm with the bills, which can be upward of $200,000.
It’s not easy, but Pelle says she used to toughing it out.
“I still have to this day great trust in people,” she said. “It has kicked me in the rear end more times than I can count. I still think a good old handshake and honesty are the prevailing factors for making a business.” n
