$9 billion in short-load concrete delivered
For nearly three decades the Cart-Away team has built a huge market in North America. Our goal was to solve the short-load delivery issues within the ready-mixed (RM) concrete industry. The problem is that small construction projects have a low priority for traditional RM delivery companies. The economics of large trucking forces these delivery companies to “up-charge” contractors when they don’t need a full load. Because of the low profits from small deliveries they punish contractors with high fees and unreasonable scheduling. Cart-Away leads the way in solving these problems for the millions of small projects in the US. We now count over 400 locations, and thousands of delivery trailers in North America. Over the years Cart-Away has become the “U-haul” of concrete.
If traction is how business ideas are measured, then we claim success in the short-load industry.
What is a Short-Load and the associated charges?
In traditional RM vernacular the short-load is any delivery that is less than 4 yards. These short-load charges are added as a minimum charge or a fixed dollar amount added to the cost of the concrete. In many busy markets a contractor cannot get 1-yard of concrete without paying for the entire 4-yards. This translates into the cost for a small project delivery at $400 to $500. If a contractor is lucky there is only a fixed dollar short-load fee ($100 to $150 per yard). These fees will be added to the regular cost of the concrete (example: $148 for concrete and $100 short-load fee = $248 per yard total). These charges cause a ton of pain for contractors all across the country. With the Cart-Away system they don’t need to continue to pay these extra costs.
What is the revenue in this short-load delivery space?
A 2022 study of traditional RM suppliers indicates that there are between 3 and 4 million short loads delivered by traditional ready mixed concrete producers each year. This represented 7% of the 400 million cubic yards of concrete that they produced in 2021. This report suggests that small projects represent at least 28 million cubic yards of ready-mixed each year. Note: These volumes only represent short-load deliveries that are charged an extra fee for delivery, not the “clean-up” short-loads delivered in the US.
Cart-Away did a survey of the top 20 growth markets in the US to explore the average short-load fees that are charged. We called traditional ready-mix producers in these markets to ask their charges for one cubic yard deliveries. Our goal was to find the average concrete delivery cost for a small construction project. We called producers in California, Texas, Georgia, Arizona, North Carolina, Florida, Nevada, Alabama, South Carolina and Tennessee. Here are the numbers that they gave us in February of 2022: (note: As of this writing, inflation has increased these number significantly).
The average price per cubic yard of 5-sack (approx. 3000 psi) concrete is $131.00. The average delivery fee for a one yard is $203.00, for a total cost of $334.00 per cubic yard for a short-load to a small project. Based upon these surveys, industry reports and our decades of collecting data, we are confident to state that there is $9-billion generated from the 28 million yards delivered for these small concrete projects.
Because the monetary value of each yard sold as a short-load ($334.00) is 2 1/2 times the value of a yard sold at full truckload pricing ($131.00), there are huge profits from a Cart-Away location. A self-delivery model collects more revenue per yard with none of the driver and truck maintenance costs to eat into the profits. Another way to look at this is that a million dollars in revenue at a Cart-Away location yields a much stronger bottom-line than that same million at a traditional ready-mix operation. When the value of the total RM short-load marketplace is calculated, $9 billion in small loads represents about 16% of the $50 billion in annual sales of all traditional RM .
These calculations only include the ready-mixed concrete that is batched into transportable equipment and then moved to the job site. – There is more.
There is more potential revenue to be counted.
Many of the small concrete projects in the US are completed using bags of concrete mix from the local home improvement store. These bags include all of the ingredients needed to make concrete. It takes 42 bags of 80# concrete to make a single yard. Current pricing at Home Depot is $4.87 a bag, or $204.54 per cubic yard. Many contractors and DIY customers find that bagged concrete is an alternative to ordering and waiting for a delivery from a ready-mixed truck. The bag-mixing method is very labor intensive and cost prohibitive for projects over 1/2 of a cubic yard. Many people use a Cart-Away trailer as a time and money saving alternative to mixing several bags in a wheelbarrow. Our Cart-Away locations make a portion of their sales from people who do not want to mix all of those bags. When counting potential revenues, we must consider the potential from the bagged concrete market.
The latest packaged goods volume for bagged concrete puts the annual revenues at just over $3 billion. So when you add bagged concrete sales and ready-mixed concrete short-load deliveries, there is a huge opportunity in servicing small projects in North America. We are confident that the most consumed product in the built environment would provide a $12 billion dollar market opportunity for anyone wanting to explore Cart-Away.
Is there opportunity for you?
Adding a Cart-Away system in your area will allow you to solve a big problem for contractors. Whenever there is a small project, they are forced to wait on ready-mix and then pay extra fees. Your opportunity is to save them time and money, while you make very high profits. You can participate in a $12 billion dollar market where customers are driven to you by a common set of problems. You don’t need to be a pioneer in this space. The Cart-Away team has decades of experience in setting up and running successful business locations. We have the proven traction in this space, and our current 400-plus Cart-Away locations sell about $160 million in ready-mixed concrete each year. It is time seize the opportunity and to start a Cart-Away service in your area.