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Top 50 Trucking Companies: Strongest get smarter

The nation’s top trucking companies share “high intensity” management teams, financial stability, and IT systems that afford “two-way communication” with shippers—and they’re just getting wiser.
By John D. Schulz, Contributing Editor
April 01, 2012

Emerging from the three-year freight recession that slashed freight capacity and rates, the nation’s top trucking companies view themselves as innovators, collaborators, technology leaders, and operational experts—not just as survivors of the Great Recession.

They also say that they’ve had to be part psychologist to retain drivers, part soothsayer to try and predict the future cost of fuel, and part accountant to keen eye on ever-rising costs wherever possible.
Trucking insiders add that although all trucking companies basically use the same equipment over the same highways with the same pool of drivers, the Top 50 manage to differentiate themselves on many levels. According to John Larkin, longtime trucking analyst for Stifel Nicolaus, it starts at the top.

“When management intensity is high the organization pays attention to the details,” says Larkin. “Management at the Top 50 is thinking 3 years to 5 years down the road to make sure that changes in the market and the industry don’t leave the company up a creek without a paddle,” he says.

Logistics Management’s (LM) annual listing of the nation’s top trucking companies, compiled by leading trucking analyst firm SJ Consulting, runs the gamut of size and scope. There are units the likes of UPS Freight and FedEx Freight that are subsidiaries of multibillion corporations; and then there are family-owned companies such as New England Motor Freight, a unit of the Shevell Group overseen by founder, Myron Shevell, a man with six decades of trucking experience.

But what all of these top operators have in common is operational excellence. Here’s a look at what’s making the Top 50 run like clockwork, and what shippers can expect from the best in class.

Common denominators
All trucking companies basically utilize the same trucks with the same population of drivers and run the same routes. Yet, there are key differentiators that set the best players apart from the rest. The nation’s leading trucking executives recently opened up to LM to explain what they do best.

Herb Schmidt, president of Con-way Truckload, says one common denominator among the Top 50 carriers is certainly their commitment to safety, among other basics. “It’s the ABCs of doing things right,” says Schmidt. “That encompasses compliance, having top-notch equipment, hiring the best people, all of that.”

Trucking analysts comb all aspects of a carrier’s operation and they say they see certain values, an operational culture of excellence, and other expertise that sets the best apart from the rest. “They all have great information technology systems because you can’t manage intensively without the information to make high quality decisions,” says Larkin.

And if you dig a little deeper you also find that all of the Top 50 have a culture that accepts and positively reacts to management intensity. To this point, Larkin adds that the best trucking companies offer “customer communication that is a two-way street in the spirit of collaboration, not the old take-or-leave-it approach under the regulated mindset of the industry prior to deregulation in 1980.”

Today’s trucking leaders say they have to be part crystal ball reader, part operational genius, and part sales person extraordinaire to survive in an industry where even in the best of the times, the industry operates on razor-thin profit margins.

“We’re always thinking ahead, trying to predict the future,” says Steve O’Kane, president of A. Duie Pyle, a leading regional LTL company. “We have been correct often enough to remain not only viable, but healthy, debt-free, and profitable.”

Then, there are the operational nuts and bolts—the blocking and tackling—that all the top carriers share. This allows their asset utilization to be high through elimination of empty miles. They also run fleets that are relatively new and highly fuel efficient, allowing their asset life cycle costs to remain relatively low, according to Larkin. “And to fill the cabs of that equipment, they all offer top-notch driver recruiting, training, and retention programs,” he adds.

And to top it off, the Top 50 have been able to keep their financial houses in order as well. This fact is especially important now, as the industry appears to be entering a period of tightening capacity and rising freight demand. At the same time, shippers with tight just-in-time inventory replenishment cycles simply can’t afford to be without carriers with sufficient financial staying power, analysts say.

“Pricing is reflective of the service provided,” adds Larkin. “Their balance sheets are not overly leveraged.”

About the Author

John D. Schulz
Contributing Editor

John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. He is known to own the fattest Rolodex in the business, and 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. This wise Washington owl has performed and produced at some of the highest levels of journalism in his 40-year career, mostly as a Washington newsman.

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