Top 50 trucking companies: Emerging from the shadows

Leading trucking company CEOs say it’s time to pay down debt and put profit to work to recapitalize their businesses - all at a time of tightening capacity. For shippers, the days of rock bottom rates could be long gone.

“Customers understand it…Yield improvement is very important right now. It’s been three or four tough years, and we need to rebound in terms of profitability in order to reinvest in our businesses.” - Bill Logue, President and CEO of FedEx Freight

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By John D. Schulz · April 1, 2011

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What do the Top 50 trucking companies have in common? That’s easy. Leading CEOs and trucking analysts agree that their shared traits include shrewd and experienced management teams, an obsession with service and operational details, an ability to react quickly to market conditions, and a motivated work force.

Emerging from the roughest three-year economic cycle since the industry was deregulated, CEOs from Logistics Management’s list of the Top 50 trucking companies say that they’re now focused on improving yield and profits.

That’s at the same time they’re increasingly tailoring their services for each specific customer to satisfy changing shipper demands.

TOP 25 LESS-THAN-TRUCKLOAD CARRIERS - 2010 REVENUES
(Including fuel surcharges)
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What’s making the LM Top 50 tick? According to David Ross, trucking analyst for Stifel Nicolaus, the most important aspect of any Top 50 trucking company is the strength, ability, and breadth of experience of its management team.

“Management is number one,” says Ross. “They all run the same trucks along similar networks, but it’s how you run them that makes the difference. The best make the right decisions on how much to charge, what kind of capacity to bring on, and how much equipment to buy. It all starts with management.”

How the Top 50 roll
FedEx Freight this year surpassed YRC Worldwide as the nation’s largest less-than-truckload (LTL) carrier. It is at the forefront of industry changes. Bill Logue, president and CEO of FedEx Freight, says he draws his cues from Fred Smith, the founder and CEO of FedEx Corp. Logue says no detail at any of FedEx’s operating units is too small for Smith to ignore.

“It’s a culture created at the top,” says Logue. “Fred has always emphasized that we are in business for the customer. But it’s our employees who make that customer expect great things. We try and make every employee responsible for that customer treatment.”

According to Douglas Stotlar, president and chief executive officer of Con-way, the No. 2 LTL carrier on our list, says that he sees several common characteristics in his operation and those of his chief competitors, including comprehensive service offerings, the ability to execute at high levels against stated service standards, and customers who appreciate a level of consistency.

Astute carrier executives are quick to point out that the lowest rate may not mean the best value. Increasingly, carriers are “bundling” their services to meet ever increasingly exacting shipper needs. As Stotlar told LM: “The price/value proposition we offer works to our customers’ advantage.”

Chuck Hammel, president of Pitt Ohio, No. 18 on LM’s LTL list, agrees with Stotlar and says that he sees several similar trends. He’s seeing more need for time-definite services, and also a move toward LTL shippers trying to increase volumes to qualify for a truckload shipment. Toward that end, Con-way recently bought Contract Freighters Inc., a major TL carrier, and now ranks as the 17th-largest TL carrier in the nation.

Hammel says he’s also seeing more shippers seeking out financial information about their carriers. He says financially strong carriers will have an edge as shippers, under the new CSA 2010 standards, are able to find out more information about individual carriers.

“Carriers who are strengthening their balance sheets by paying down debt, recruiting the best drivers, and adjusting their pay and benefits to stay ahead of what could be a looming driver shortage will have an advantage,” Hammel says.

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About the Author

John D. Schulz
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.

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