Top 50 Trucking Companies Special Report: Excellence in Motion
The nation’s top trucking companies are traveling different paths to meet shippers’ needs now and in the future.
By John D. Schulz, Contributing Editor -- Logistics Management, 4/1/2007
- Yes, we go there
- The need for speed—plus reliability
- Providing the personal touch
- Hauling into the future
- Truckers pay attention to retention
Why is it that certain trucking companies, in a time of rising costs for everything from fuel to drivers, are consistently able to deliver top-flight, innovative services and still turn a profit?
Carrier executives say it’s their laser-like focus on meeting shippers’ needs—both now and into the future—that drives their operations. Whatever the current crisis of the moment, and the notoriously cyclical trucking industry never lacks for those, successful carriers are able to look beyond and stay on top in the customer service game.
If there is one commonality among successful, profitable trucking companies in 2007, it is their ability to change. Long unshackled from the regulated mindset of the pre-1980 era, today’s trucking leaders say they are in it for the long haul–literally.
“Our former president, Don Schneider, used to have a saying–that we’re built to last,” says Mark Rourke, president of truckload for privately held Schneider National, the nation’s second-largest TL carrier with more than $3.5 billion revenue last year. “I like to think that we are. That means going wherever the customer needs us, whether it’s international, intermodal, or more timely deliveries over the road.”
The most successful carrier executives are able to look at their competition every day on any interstate. But to them, trucking is more than going from simply Point A to Point B. It’s a commitment to stay on top of shipper needs no matter the current fiscal environment.
“If we take care of our employees, they will take care of the customer—and the bottom line will take care of itself,” says David S. McClimon, president of Con-way Freight, whose parent company earned $265.2 million last year on $4.22 billion revenue.
Doug Duncan, president and CEO of FedEx Freight (FEF), says it’s easy to tell which trucking companies are profitable, and which ones have struggled in their bottom lines over the past year.
“If you went back over past 12 months and looked at all the carriers’ press releases about improving service, giving customers something new, expanding reliability and compared those with the ones who are creating synergies and cutting costs and making everything cheaper, you will see a very bright line with a few carriers on one side and the rest on the other side,” says Duncan.
Schneider National, Con-way, and FEF are clearly among the winners. Privately held Schneider doesn’t disclose exact earnings but it’s widely believed to be solidly profitable while growing its revenue by nearly 10 percent per year. FEF, also growing by double-digits, earned $150 million in its most recent fiscal quarter on just over $1 billion revenue. Con-way, although suffering an uncharacteristic earnings dip last year, is still solidly profitable, as are Old Dominion, Pitt Ohio Express, New England Motor Freight (NEMF), and the Yellow and Roadway units that comprise YRC Worldwide.
Robert A. Davidson, president and CEO of Arkansas Best Corp., parent of the nation’s fifth-largest LTL carrier, ABF Freight System, recently noted that even during a so-so profit year in 2006, ABF excelled in areas important to customers, employees, and the public. For instance, Davidson said ABF’s cargo claims ratio was the best in over 20 years. “Careful cargo handling matters to our customers and we believe we lead the industry in this important measure,” Davidson said.
YES, WE GO THERE
Where are the trucking industry leaders heading as we enter the peak shipping season of 2007? In a word: Everywhere.
Forget the old vertical silos of trucking—TL, LTL, short-haul, regional, interregional. Except for the specialized equipment carriers, chances are your favorite general freight carrier is going anywhere you’re likely to have a distribution center, crossdock, or retail outlet.
Here are some of the latest innovations by top carriers:
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Schneider National has authority to operate as a domestic carrier in China.
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LTL giant Con-way now is operating in the truckload and ocean arenas.
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FedEx Freight is expanding into long-haul national coverage.
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UPS Freight is moving upscale into logistics and supply chain solutions.
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YRC Worldwide is pursuing opportunities in next-day and overseas markets.
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J.B. Hunt is partnering with Matson Navigation Co. to provide guaranteed shipping services from ports in China to Long Beach, Calif.
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Regional players Old Dominion, Pitt Ohio, Averitt Express, and NEMF are expanding their scope with alliances and other services outside their home regions.
Phil Pierce, Averitt Express executive vice president of sales and marketing. said Averitt is always looking for traditional and non-traditional ways to add value to a customer’s operation. He said that comes from keeping communications lines open, asking for feedback, listening, and reacting. Providing technology that helps customers organize, navigate, and execute all of their shipping functions is now standard among top trucking companies.
The American Trucking Associations’ President and CEO, Bill Graves agrees. “Our companies are as much in the information business as they are in the trucking business,” he said. “We move data as much as we move packages.”
THE NEED FOR SPEED—PLUS RELIABILITY
All shippers want faster delivery. Duncan of FEF quips that nobody asks for second-day delivery anymore. “The only reason they accept second-day is because nobody else is offering it next day,” he says. But Duncan says carriers are not helping meet shipper needs by delivering it on-time one day, and 12 hours late the next. So what’s more important: speed or reliability?
“That’s kind of like asking what’s more important, your heart or your lungs?” quips Pierce of Averitt. “You’ve got to have them both to survive.”
Other carrier chiefs agreed. “Each has its own determination of value with the customer,” Con-way’s McClimon said. “But the reality is you need to have both. It doesn’t do much good if you deliver 800 miles next-day today, but miss tomorrow.”
Duncan whittles FEF’s success to eight words: “We have to service the customer’s supply chain.” He said there are two fundamentals—“absolute on-time reliability and visibility.”
UPS Freight President Gordon Mackenzie says carriers no longer can make a choice between speed and reliability as they are both intertwined in customer service. Bottom line: carriers need both, and at a fair price.
“You can’t really separate speed from reliability anymore,” Mackenzie says. “We could establish a 15-day standard on a particular lane and be extremely reliable, but we wouldn’t have much demand for that service. Similarly, performing only 50 percent of the time on a next-day lane gets you the same result—a dissatisfied customer. So they’re inseparable.”
Another way to look at it: “In today’s world, speed is a given,” Averitt’s Pierce said. “If you’re not strong in next-day and two-day lanes, you’re not even invited to the table. Reliability is the differential—it’s what sets you apart to earn the business, and it’s what keeps the business.”
PROVIDING THE PERSONAL TOUCH
Jon Shevell, vice chairman of Northeast regional giant NEMF, says that as rival carriers get swallowed up by multi-billion-dollar corporations—sometimes the shipper gets lost in the shuffle.
“You always have to remember the shipper comes first,” Shevell says. “We pride ourselves in being a family-owned company that never forgets a customer’s first name.”
But Shevell emphasized that shippers have to remember that this top-notch service comes at a price. Because of industry consolidation and bankruptcies, shippers no longer have extra capacity to spare.
“The days of just haggling over price are over,” Shevell said. “If shippers want good, consistent, on-time service with guarantees of capacity and deliveries, they’re going to have to pay for it.”
Even giant corporations remember details about customer. At UPS Freight, part of UPS’s $8 billion supply chain solutions and freight unit, Mackenzie says its 16,700 employees can provide “one-to-one service to our customer, doing the little things that customers appreciate.”
Mackenzie adds that company surveys show our customers appreciate the flexibility of our employees in solving their problems.
“In a service industry such as ours, our employees are a key to differentiating us from other companies,” Mackenzie says.
Pierce said Averitt recognizes it’s in the service business, not the transportation business. “Trucks, planes, ships, and trains don’t move freight,” he said. “People do. That principle is the foundation for everything we do.”
HAULING INTO THE FUTURE
So what will these companies look like five or 10 years from now? “Bigger, for one,” Mackenzie said. “We’ll have even better coverage than what we have today. Even better service quality than what we have today. Our information tools will be more robust.”
To the same question, Averitt’s Pierce replied: “I can’t tell you what it will look like, but I can tell you what it won’t look like. We will not have become stagnate. We will keep adapting to meet needs of customer, wherever that takes us.”
Schneider National’s Rourke predicts a growing trend toward more rapid replenishment of inventory. Now common in the automotive sector, Rourke says that trend will spill over to retail and other industries.
FedEx Freight’s Duncan says trucking will become more global as supply chains are stretched further.
Davidson of ABF said efficiencies will continue to be squeezed out of all carriers’ operations. ABF offers long-haul, national coverage with a unionized work force that still is able to compete on price in nearly every lane through a system that covers the country with a network of fewer terminals than its competition.
Con-way’s McClimon predicts more integrated networks of TL, LTL, and international operations. “They will provide global services that are truly seamless and direct, with no hand-offs out of a single system.
“This integration of networks across modes is the way of the future,” Con-way’s McClimon concludes. “It will be the linchpin for expanding service options that customers are only dreaming about today.”
Top 50 For-Hire Carriers - Less-than-truckload
| Rank | Company | 2005 | Revenue (000) 2004 | % Change |
| 1 | YRC Worldwide | 8,741,600 | 6,767,500 | 29.2 |
| 2 | FedEx Freight | 3,645,000 | 3,217,000 | 13.3 |
| 3 | Con-way Freight | 2,816,647 | 2,532,201 | 11.2 |
| 4 | UPS Freight | 1,900,000 | 1,647,461 | 15.3 |
| 5 | ABF Freight System | 1,709,000 | 1,585,400 | 7.8 |
| 6 | Estes Express Lines | 1,388,348 | 1,003,651 | 38.3 |
| 7 | Watkins Motor Lines | 1,108,058 | 1,162,990 | -4.7 |
| 8 | SCS Transportation | 1,098,031 | 982,270 | 11.8 |
| 9 | Old Dominion Freight Line | 1,061,403 | 824,051 | 28.8 |
| 10 | Averitt Express | 843,700 | 704,233 | 19.8 |
| 11 | R+L Carriers | 758,000 | 710,000 | 6.8 |
| 12 | Southeastern Freight Lines | 649,601 | 565,186 | 14.9 |
| 13 | Lynden Inc. | 600,000 | 450,000 | 33.3 |
| 14 | TransForce Income Fund | 522,580 | 451,945 | 15.6 |
| 15 | AAA Cooper | 496,857 | 447,136 | 11.1 |
| 16 | CenTra Inc. | 456,000 | 434,000 | 5.1 |
| 17 | Central Freight Lines | 372,140 | 386,601 | -3.7 |
| 18 | Vitran Express | 352,693 | 303,017 | 16.4 |
| 19 | New England Motor Freight | 348,000 | 319,000 | 9.1 |
| 20 | Roadrunner Dawes Freight Systems | 345,162 | 335,971 | 2.7 |
| 21 | Forward Air Corp. | 320,934 | 282,197 | 13.7 |
| 22 | Pitt Ohio Express | 237,900 | 221,752 | 7.3 |
| 23 | A. Duie Pyle Cos. | 176,970 | 168,062 | 5.3 |
| 24 | PJAX Freight System | 164,222 | 149,982 | 9.5 |
| 25 | Milan Express | 163,000 | 141,000 | 15.6 |
Top 50 For-Hire Carriers - Truckload
| Rank | Company | 2005 | Revenue (000) 2004 | % Change |
| Source: Transport Topics (American Trucking Associations) |
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| 1 | Swift Transportation Co. | 3,197,455 | 2,826,201 | 13.1 |
| 2 | Schneider National | 3,145,000 | 2,875,000 | 9.4 |
| 3 | J.B. Hunt Transport Services | 3,127,900 | 2,786,200 | 12.3 |
| 4 | Landstar System | 2,517,828 | 2,019,936 | 24.6 |
| 5 | Werner Enterprises | 1,971,847 | 1,678,043 | 17.5 |
| 6 | U.S. Xpress Enterprises | 1,164,232 | 1,105,656 | 5.3 |
| 7 | Crete Carrier Corp. | 925,870 | 820,636 | 12.8 |
| 8 | CRST International | 732,578 | 617,627 | 18.6 |
| 9 | NFI Industries | 64,577 | 603,307 | 6.7 |
| 10 | Covenant Transport | 643,054 | 603,622 | 6.5 |
| 11 | Knight Transportation | 566,813 | 442,288 | 28.2 |
| 12 | Interstate Distributor Corp. | 557,056 | 433,505 | 28.5 |
| 13 | Universal Truckload Services | 531,339 | 362,000 | 46.8 |
| 14 | Anderson Trucking Services | 525,368 | 422,718 | 24.3 |
| 15 | Heartland Express | 523,793 | 457,086 | 14.6 |
| 16 | TransForce Income Fund | 506,402 | 300,038 | 68.8 |
| 17 | Day & Ross Transportation Group | 495,868 | 365,216 | 35.8 |
| 18 | Dart Transit Co. | 482,909 | 404,159 | 19.5 |
| 19 | USA Truck | 439,703 | 363,105 | 21.1 |
| 20 | Celadon Group | 436,763 | 397,923 | 9.8 |
| 21 | Gainey Corp. | 425,120 | 365,000 | 16.5 |
| 22 | Contract Freighters Inc. | 407,701 | 400,400 | 1.8 |
| 23 | Mercer Transportation | 377,060 | 293,660 | 28.4 |
| 24 | P.A.M. Transportation Services | 360,880 | 325,066 | 11.0 |
| 25 | Contrans Income Fund | 318,587 | 267,463 | 19.1 |
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Perhaps you need to conduct some additional, more in-depth research before publishing information about companies. Landstar brokers out most of their frieght to other trucking companies. Therefore, their safety rating is truly that of the companies hauling for them.
Mark - 2009-30-6 10:47:00 EDT -
It looks like this entire article is from April 2007??? This is confusing to post all together.
Barb Hunt - 2009-6-3 14:28:00 EST -
Why would you post the top 50 carriers with 2005 revenues? Not very useful, when we are in 2009.
Richard Milhollin - 2009-18-2 15:05:00 EST -
Wow craddock, are you sadly mistaken.Landstar has lost sight of everything except the bottom line for investors.
George Adams - 2009-11-2 14:31:00 EST -
