This document discusses plans to expand cargo operations in North America through mini-hub locations. Mini-hubs would be storage spaces within shuttling range of major warehouses, essentially extending warehouse coverage. Cargo partners, couriers, and potentially competing agents would use the mini-hubs. The document analyzes the costs and revenues of an existing mini-hub in Oxnard, California, and models projections for mini-hubs using couriers versus cargo partners. It recommends starting with cargo partners and warehouses, then adding couriers if volumes increase. The document outlines expectations and potential locations for new mini-hubs.

1. CARGO EXPANSION
NORTH AMERICA

2. CARGO MINI-HUBS
OPERATING MODEL AND
GUIDELINES

3. OUR DEFINITION
• Within Shuttling Range of Major LBC
Warehouses.
• Will be supported by those LBC Warehouses
thru Shuttlers.(Schedule dependent on
Volume)
• Primarily be Storage Spaces (e.g. Extra Space,
Public Storage)
• Essentially an extension of LBC Warehouse

4. WHO WILL USE THESE MINI-HUBS?
CARGO PARTNERS
LBC COURIERS
and ?

5. ADVANTAGES
• Extends LBC Presence and
Coverage
• Easily Manageable SBU
• Convenient for PC’s / WC’s
• Tool for Recruitment / “Piracy”

6. CURRENT MINI HUB - OXNARD
AP23 OXNARD
MONTH: Jan-12
Dis ta nce from Nea res t Whs e / Bra nch(R/T)
70
Avera ge Fuel Cos t
UNITS AMOUNT $ 4.50
REVENUE: 259 $ 15,022.00 Vehicle Fuel Efficiency
Average Selling: $ 58.00 10
PERSONNEL EFFECTS-SEA Shuttling Frequency / Ra tio Per Month
GROSS UNITS - SALES $ 15,022.00 2 8.67
NET REVENUE
COST OF SALES 48% $ 7,210.56
GROSS INCOME $ 7,811.44
OPERATING EXPENSE
MARKETING
SALARIES $ 2,079.96 Cou.Sa la ry/Hr. $ 12.00
PAYROLL TAXES $ 159.12 7.65%
OFFICE EXPENSES
RENT - VAN LEASE $ 650.00
REPAIRS / MAINTENANCE
GAS $ 500.00
TAXES / LICENSES (ANNUAL/12) $ 38.00
TELEPHONE - TMOBILE $ 50.00
TELEPHONE - DATA CARD $ 50.00
INSURANCE - VAN $ 210.75
INSURANCE - MEDICAL $ 218.25
TOTAL OPERATING EXPENSE $ 3,956.08
Less: Rent - Storage $ 277.00
Cost of Shuttling $ 273.00
Net
NET INCOME $ 3,305.36 Profit Margin 22%

7. What comes first?
The CHICKEN OR THE EGG ?
COURIERS OR PC’S?
Set-Up PC’s First, and hire Full-Time Courier as
Volume Dictates

8. Courier – PC Comparison
COURIER OR PC?
At 50% Efficiency FT/ COURIER PC
UNITS AMOUNT AMOUNT
REVENUE: 242 $ 14,036.00 $ 14,036.00
Avera ge Selling: $ 58.00
PERSONNEL EFFECTS-SEA
GROSS UNITS - SALES $ 14,036.00 $ 14,036.00
NET REVENUE
COST OF SALES 48% $ 6,737.28 $ 9,123.40
for PC 65%
GROSS INCOME $ 7,298.72 $ 4,912.60
OPERATING EXPENSE
MARKETING
SALARIES $ 2,079.96
PAYROLL TAXES $ 159.12
OFFICE EXPENSES
RENT - VAN LEASE $ 650.00
REPAIRS / MAINTENANCE
GAS $ 500.00
TAXES / LICENSES (ANNUAL/12) $ 38.00
TELEPHONE - TMOBILE $ 50.00
TELEPHONE - DATA CARD $ 50.00
INSURANCE - VAN $ 210.75
INSURANCE - MEDICAL $ 218.25
TOTAL OPERATING EXPENSE $ 3,956.08 $ -
Les s : Rent-Stora ge $ 277.00 $ 277.00
Cos t of Shuttling $ 273.00 $ 273.00
NET INCOME $ 2,792.64 $ 4,362.60
NET PROFIT MARGIN 20% 31%

9. Start Up
PC’s and WC’s make more
sense!
When do we know when to
start hiring Couriers?

10. Courier – PC Comparison @ 400 Units
COURIER OR PC?
FT/ COURIER PC
UNITS AMOUNT AMOUNT
REVENUE: 400 $ 23,200.00 $ 23,200.00
Avera ge Selling: $ 58.00
PERSONNEL EFFECTS-SEA
GROSS UNITS - SALES $ 23,200.00 $ 23,200.00
NET REVENUE
COST OF SALES 48% $ 11,136.00 $ 15,080.00
for PC 65%
GROSS INCOME $ 12,064.00 $ 8,120.00
OPERATING EXPENSE
MARKETING
SALARIES $ 2,079.96
PAYROLL TAXES $ 159.12
OFFICE EXPENSES
RENT - VAN LEASE $ 650.00
REPAIRS / MAINTENANCE
GAS $ 500.00
TAXES / LICENSES (ANNUAL/12) $ 38.00
TELEPHONE - TMOBILE $ 50.00
TELEPHONE - DATA CARD $ 50.00
INSURANCE - VAN $ 210.75
INSURANCE - MEDICAL $ 218.25
TOTAL OPERATING EXPENSE $ 3,956.08 $ -
Les s : Rent-Stora ge $ 277.00 $ 277.00
Cos t of Shuttling $ 273.00 $ 273.00
NET INCOME $ 7,557.92 $ 7,570.00
NET PROFIT MARGIN 33% 33%

11. MINI-HUB OIS COURIER @MAX. EFFICIENCY
AT MAXIMUM EFFICIENCY FT/ COURIER
UNITS AMOUNT
REVENUE: 484 $ 28,072.00
Average Selling: $ 58.00
PERSONNEL EFFECTS-SEA
GROSS UNITS - SALES $ 28,072.00
NET REVENUE
COST OF SALES 48% $ 13,474.56
GROSS INCOME $ 14,597.44
OPERATING EXPENSE
MARKETING
SALARIES $ 2,100.00
PAYROLL TAXES $ 160.65
OFFICE EXPENSES
RENT - VAN LEASE $ 650.00
REPAIRS / MAINTENANCE
GAS $ 500.00
TAXES / LICENSES (ANNUAL/12) $ 38.00
TELEPHONE - TMOBILE $ 50.00
TELEPHONE - DATA CARD $ 50.00
INSURANCE - VAN $ 210.75
INSURANCE - MEDICAL $ 218.25
TOTAL OPERATING EXPENSE $ 3,977.65
Less: Rent-Storage $ 277.00
Cost of Shuttling $ 273.00
NET INCOME $ 10,069.79
NET PROFIT MARGIN 36%

12. WHAT IF YOU HAVE 3 OR 4 OF THESE?
$10K X 3 = $30,000 A MONTH

13. What Next?
Look at Recruiting, “Pirating” Competitors’
Agents!
Tools to Recruit
Convenient Drop-Off Point
Less Overhead (Gas) for Agents
More Money for them at the end of the Day

14. ORDER OF ACTION
CARGO PARTNERS (PC’s, WC’s)
THEN
COURIERS
THEN
WE PIRATE / RECRUIT
COMPETING AGENTS

15. WHERE ARE POTENTIAL SITES?
Area I
• Redding / Tracy / Modesto Area
Area II
• South Orange County / Oceanside /Escondido / Palm Springs
Area III
• Northern Illinois ? Eastern Pennsylvania? Connecticut?
Area IV
• Outskirts of Vancouver / Whistler?
Area V
• Outskirts of Toronto

16. DAY TO DAY OPERATION
For: PC’s and WC’s
• Fax Access / Scan to Drop Box Access
• $$ Turn-Over to Shuttler / EFT Process?
For: Couriers
• Laptop with Data Card / Scanner?
• Fax Access / Scan to Drop Box Access
• $$ Turn-Over to Shuttler / Branch Turn-Over
SUGGESTIONS??

17. Expectations
Two (2) Per Area
Minimum of 300 Units
25% Net Profit Margin
No Overtime for F/T Couriers
Max Efficiency @ 22 Boxes / Day @ 22 Days
400 Unit Baseline

18. Questions / Comments