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End of an Era?

Historical truck photos from FFE

“All That’s Trucking” blog by Deborah Lockridge, Editor in Chief

In the last few weeks, well-known truckload leaders have announced they are stepping back from the front lines at the companies they founded or have led for decades.

Just this week, Clarence L. Werner, 73, founder of Werner Enterprises, announced he will step down from his role as chairman in May, becoming chairman emeritus. Gary Werner will become chairman. Gregory Werner will become vice chairman and remain CEO. Derek Leathers will become president and retain his position and chief operating officer.

In another announcement, Stoney “Mit” Stubbs Jr. has retired as CEO of Frozen Food Express Industries but will continue as chairman of the board. S. Russell Stubbs will become CEO and remain president of the company.

And a few weeks ago, Russell Gerdin, chairman and CEO of Iowa-based Heartland Express, announced he is taking a leave of absence for health reasons. Michael Gerdin, president and director, is assuming Russell Gerdin’s responsibilities in his absence and will act as chairman of the board. While the company did not elaborate on the reasons for the leave, in 2006, Russ Gerdin was diagnosed with liver cancer. Later that year, Michael Gerdin was named president while Russell Gerdin continued to serve as chairman and CEO.

We profiled Werner and Stubbs back in January 2005, along with other big industry names like Dan England, Jerry Moyes, Don Schneider and Kevin Knight, in a special issue called “The Rise of Truckload.” (You can read it online by going to our online archives and clicking on the January 2005 link.)

We didn’t profile Gerdin in that issue, but did the following year when we honored him as one of our Truck Fleet Innovators in the March 2006 issue (which you can also read in the archives.)

The interesting thing is that five years after we did that special issue on “The Rise of Truckload,” I found myself writing a series about how the industry is changing. Very few of those big TL carriers are still doing only truckload. They’ve diversified into intermodal, dedicated, drayage, regional, third-party logistics and other opportunities. (Check out the March 2010 issue for the first in the series.)

Nevertheless, these guys were pioneers, taking advantage of the turbulent years following deregulation to grow and prosper. I thought I’d pull a few excerpts from their stories:

Mit Stubbs’ FFE

FFE started out in the 1940s hauling truckload temperature-controlled freight. In the 1950s it added less-than-truckload services. Stubbs, who became president of FFE in 1978 and chairman four years later, guided the company through deregulation. He recalls the early ’80s as uncertain, but not without promise.

“We worried about somebody messing in our playhouse,” he says, “but it also gave us a big opportunity to mess in everybody’s else’s playhouses.”

It actually was the refrigerated LTL operation that presented the best growth prospects. And FFE added dry truckload services in the 1980s, which by the 2000s enabled it to offer any combination of refrigerated or dry truckload and LTL service throughout the U.S. and into Canada and Mexico.

C.L. Werner

Werner grew up on a farm and was driving farm trucks by age 10. He set up a trucking business at age 19 and ran it from his home for six years, hauling exempt freight. By the mid-1960s, Werner had a fleet of about a dozen trucks, painted the distinctive metallic blue that would synonymous with the company.

A big breakthrough came in 1975, when Werner landed its first Fortune 500 account – Maytag.

Lee Hays, Maytag’s traffic manager, recalled his first meeting with C.L. for authors Rodengen and Hubbard. “C.L. was dressed in blue jeans, cowboy boots and a huge belt buckle. He also had an Afro hairdo. I thought, ‘Who is this guy?’ We had an immediate chemistry.”

In 2005, Randy Marten, CEO of Marten Transport, singled out Werner’s business acumen, particularly his foresight in resisting the big buying spree of the early aughts.

“A few years ago, he was chastised for pulling back on buying new trucks” when it looked like the economy was heading downhill, Marten recalled. “He’s the one that said, we’re not going to grow, we’re going to concentrate on profits. He was chastised for it then, and now he’s a shining star. Which he probably knew all along.”

Here’s a video of the exhibits at the C.L. Werner Trucking Museum in Omaha, Neb.:

Russ Gerdin and Heartland

Heartland Express is known for having one of the best operating ratios in the truckload industry and being debt-free, and stayed a truckload specialist after many of fellow truckload pioneers were diversifying.

When we talked to Gerdin, it was obvious he looked at things a little differently than the pack. For instance, take his remarks at the Merrill Lynch Global Transportation Conference in the summer of 2004, when the trucking industry was lamenting the worst driver shortage it had ever seen.

“It blows my mind on a daily basis, everyone crying about a shortage of drivers,” he said. “It seems to be a sickness within the truckload industry that we truckers have to haul all the freight – it doesn’t matter if it pays, we just have to haul it. So in order to do that, we have to hire a whole bunch of bad drivers to haul a whole bunch of bad freight.”

In fact, a driver shortage is not such a bad thing, Gerdin said. “The driver shortage makes you realize you have to provide a better living for the drivers, and then you have to charge more.” Higher rates mean not only better pay for the drivers, but a better bottom line for the trucking company.

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2/25/2011 – End of an Era?

In the last few weeks, well-known truckload leaders have announced they are stepping back from the front lines at the companies they founded or have led for decades….