DELIVERY COMPANIES PROFIT DESPITE FAX, MOVE TO LICENSE
By Jeffrey Goldberg
Washington Post, September 5, 1988
When it absolutely positively has to be there in 20 minutes, Milton Hill may be your best bet.
Last Tuesday, Hill, a bicycle courier with Falcon Express of Silver Spring, got a call at 4:40 p.m. to deliver a package to a copy center by 5 p.m. The only problem: the package was sitting at 1111 Constitution Ave. in the District, and the copy center was on Wilson Boulevard in Arlington, about two miles away in rush-hour traffic.
For Hill, a veteran courier who often makes more than $100 a day delivering documents and packages, the objective was clear.
"The client was kind of on the edge," said Hill, 28. "They figured it was too late. I knew I could get there on time."
Hill made it with five minutes to spare, to the great relief of his client, a major law firm that considers couriers an indispensable cog in its daily operation.
In a city that runs on paper, there are many Washington offices that could not function without the more than 400 bicycle couriers who deliver documents around Washington each day.
But for every career saved by an intrepid courier, there is at least one pedestrian or driver who thinks couriers are Hell's Angels in Spandex, reckless nuisances who tie up traffic and sideswipe pedestrians.
The local courier industry -- more than 150 companies that deliver more than 8,000 packages daily and collectively made about $135 million in revenue last year, according to the Washington Metropolitan Courier Association -- has spent much of its time the past two years coping with a variety of problems ranging from competition from increasingly ubiquitous facsimile machines to the unsuccessful fight against a law that will require the licensing of bicycle messengers beginning later this year.
Unlike many of the service-oriented industries in this area, most courier businesses appear to be of relatively modest size. Because all of the area's courier companies are privately owned and unwilling to give out financial data, a picture of the industry is difficult to draw. But interviews with several courier company executives indicate that most local messenger companies were founded in this decade, and most of the successful ones appear to have branched out from bicycles to delivery by motorcycle, automobile and even the dreaded fax machine.
Many courier companies thought the recent emergence of facsimile machines -- which allow users to send copies of documents from office to office via phone lines -- signaled the end of the bicycle couriers' dominance. But local courier company executives say the continuing growth of the Washington area will offset fax's intrusion into the delivery market. And several messenger companies have gotten fax machines of their own, using them to receive documents and then deliver them to faxless clients.
Scott Foreman, president of the Bethesda-based R&S Couriers Inc., said current facsimile technology will not hurt courier businesses because "you can't fax original signatures, you can't fax important documents, you can't fax architectural drawings."
R&S, now five years old, appears to be typical of many of the courier companies operating in Washington. Foreman said revenue has grown about 40 percent each year for the past three years, with $2 million projected for this year. Interviews with several courier company executives indicate that annual revenue for local courier companies ranges from $100,000 to $20 million.
About 35 percent of R&S's couriers work on bicycles, the rest in cars. Foreman said the tremendous growth of business in the suburbs has forced courier companies to expand their fleet of cars because much of the business is now outside the city.
"We do deliveries all over the metro area," Foreman said.
Like the vast majority of messenger companies, R&S's couriers are independent contractors, earning about 50 percent of the cost of a delivery, which costs between $5 to $9 for bicycle couriers and $13 to $15 for deliveries by car.
And like most courier companies, R&S is home-grown -- Foreman was a messenger himself before starting the company.
"Most of the courier companies are independents started in the Washington area," said Lawrence Burtchaell, executive director of the Washington Metropolitan Courier Association. "The industry is not much more than 15 years old and the majority here are less than 10 years old."
He said the explosion in the local courier industry was caused by the increasing demands put on law firms, associations, large corporations and government agencies to speed up the way they do business and exchange paper work.
"You couldn't get things moved fast enough," Burtchaell said. "Somebody had to do it."
That somebody is a messenger like Hill, who understands the rules set by the high-powered clients of courier companies -- get it there as fast as humanly possible.
To do that, Hill said, you can't always go by the book.
"You've got to bend the laws a little," he said. "We don't want to get killed delivering, but if we have to bend the rules sometimes, we do it."
Hill said the only way to make the ridiculously short deadlines that couriers often face is to ignore traffic lights and stop signs.
"It's a time-sequence thing," Hill said. "Look at the traffic, see where it is. Find the gap, take the gap, go with the flow, bob to the right, bob to the left, shoot up the middle of traffic. ... Ride like a snake. Keep a steady pace. The most important thing -- don't stop, even at a light."
By some standards, that's reckless bicycling. And that is what prompted the drive for city legislation to license bicycle messengers.
D.C. police figures show that 25 pedestrians were seriously injured in collisions with bicycle messengers in 1986, the last year for which figures are available. Messenger companies say several couriers each year are injured in collisions with automobiles, but accurate statistics are not compiled.
Part of the problem, critics say, has been slack enforcement of traffic rules for bicycles. But the police appear to have begun cracking down.
Police and city government sources say that more than 300 bicyclists were ticketed for traffic violations downtown during the second week of August, with most of those ticketed being bicycle messengers.
Last year, tickets issued to bicyclists averaged about 35 each week.
The Commercial Bicycle Operators Licensing Act, passed by the D.C. Council earlier this year, calls for stricter enforcement of traffic rules for bicyclists and the licensing of couriers.
Although many couriers opposed the proposed regulations in hearings last year, several courier company executives said they support the new law, which would force couriers to wear licenses with easily seen numbers on their backs.
"The safety of the courier and the pedestrian is more important than a package," said Vassil Yanco, president of the Washington Metropolitan Courier Association and vice president of The Courier Connection, a local messenger service.
"Our goal is to upgrade our image. But what's the point of public relations if the bicyclists aren't behaving?"
Yanco said the courier association, which represents about 50 of the more than 150 local courier companies, supports the new law, which was sponsored by D.C. Council member Nadine Winter (D-Ward 6).
"I do favor some regulations in this industry," Yanco said. "But I don't think it will threaten bicycle couriers."
Some other reforms in the way couriers do their business have been proposed. One would require that couriers be put on salaries rather than being paid by the piece, on the theory that working on commission encourages couriers to disobey traffic rules to increase their income.
"Most couriers disregard the law," said Linda Keenan, the chairwoman of the D.C. Bicycle Advisory Council.
"The reason they do that is because ... they are paid by the piece. It's in their interest to make as many pickups as they can. Traffic lights and stop signs slow them down. If they can run through these barriers, they can make more money."
But most courier company executives said that without the incentive of commissions, couriers would not work nearly as hard.
"It's an interesting proposition," said Mark Gross, the vice president of Quick Messenger Service.
"But an important thing to realize is the time-sensitive nature of these deliveries is incredible. Some companies that had couriers on salary had {couriers} who were too laid-back, almost like it was a union job."
Several courier company executives say the nature of the business, and the people who work in it, makes it difficult to manage the messengers.
"We can't really control the drivers because they're independent subcontractors," Gross said.
"I try to hire the more mature and professional drivers. A lot of companies will hire anyone who walks in from the street. I think the industry is plagued by inexperienced and irresponsible bicyclists."
One problem the courier companies may have to deal with is drug and alcohol abuse by messengers. Several couriers interviewed said a significant number of their colleagues sporadically or regularly use drugs or drink on the job.
One courier, who spoke on condition of anonymity, explained it this way: "Sometimes the pressure is so bad that some of the {couriers} smoke a little pot to calm them down. Especially when traffic is bad, a beer or a joint mellows you out a little."
However, courier company owners interviewed this week said they are unaware of a serious substance abuse problem among their messengers.
And Grant Spoon, a messenger with Courier Connection, said most couriers are "responsible businessmen."
"I'm not just an employee, I'm an independent businessman," said Spoon, who regularly earns between $500 and $600 a week. "I feel like I ride differently than other drivers. I try to ride courteously.
"I hate it when I see other bikers going through traffic and leaving a trail of destruction in their wake."
The average courier lasts anywhere from two months to a year in the business, but if couriers have trouble staying in the business a long time, so do the the courier companies themselves.
"Last year's phone book has nothing to do with who is in the business this year," said one courier company executive.
Although no precise statistics are available, Roger McArthur, treasurer of the courier association and vice president of Nova Delivery Inc., estimated that at least 25 percent of local courier companies go out of business each year. Other courier executives said the rate of failure could be as high as 50 percent.
Part of the reason for the high failure rate, some said, is the cost of equipping and staffing a courier company. The costs of offices, two-way radios, multiple telephone lines and, increasingly, computers to track deliveries and deliverers, all add up.
"A lot of people who go into the business think it is easy to make some money," Yanco said.
"They miss one factor -- paying the courier 50 percent doesn't mean the other 50 percent is going into your pocket. Rent, salaries for dispatchers, beepers, radios, computers, all need money."
Foreman said that even with proper financing, the combination of "high-powered clients with independent laissez-faire labor" is difficult to handle.
"If you mess up one delivery for one lawyer who has power, he'll kick you out in a heartbeat," he said.
"The element of control is very difficult. Someone will start a company and find it's a very difficult business."
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