Having it all

If owning a trucking company were a drill exercise, Freddie Wilson has spun about face several times in his 30-year career. As a two-truck carrier in 1972, F. D. Wilson Trucking Co., Inc., Vernon, Ala., began hauling processed chicken in reefers. It didn’t last long.

“I couldn’t have gotten in it at a worse time,” Wilson says. “It was too competitive.” Wilson phased out his reefer business and began leasing equipment to other carriers, performing maintenance as part of the lease contract. In the late 1980s, Wilson recaptured his leased tractors and became a commercial carrier – first in flatbed and then in dry vans as well. By this time, the fleet had reached about 40 trucks, but he still had at least one more spin to take.

Marriage terms
In the early 1990s, Wilson began sharing flatbed loads with Epperson Trucking, a 15-truck fleet in Barnesville, Miss. Freddie Wilson and Tommy Epperson realized their own companies had what the other needed – stability. Wilson had financial and management stability; Epperson had steady customers. In 1993, Wilson bought Epperson Trucking.

“They had some growing pains, and Tommy didn’t want the financial pressure of owning a company,” Wilson says. “They had some large accounts, and we were already sharing business. We bought it for the customers and the reputation. We were looking at their customer base and personnel base, not their asset base.”

Wilson hired an accountant to determine the value of Epperson Trucking. The final, negotiated price was approximately double the value of the company’s physical assets, Wilson says.
The takeover was swift and silent. Tommy Epperson changed from owner to general manager. Epperson Trucking kept the same name, employees and customers as before. Freddie Wilson and Tonya Norton, a Certified Public Accountant and full-time employee at F. D. Wilson, Inc., are the only two who shuffle their time between the two companies.

Exclusive carriage
Just before Wilson purchased Epperson Trucking, he coined a business strategy that has, for the most part, been very successful. The company does not target specific lanes from its shippers. Instead, Wilson seeks all of a shipper’s freight, no matter where it takes him. So far, eight customers have signed either F.D. Wilson or Epperson Trucking as their exclusive carriers.

“We feel like if we can be the only carrier in an operation, we can better serve it,” Wilson says. To accomplish this strategy, Wilson targets customers by their size – typically smaller shippers – so that he can service all their transportation needs. When Wilson bought Epperson’s business, the two sat down and used this strategy to plan how they would grow the companies. Under Wilson’s supervision, Epperson Trucking has grown to 55 trucks, while F.D. Wilson Inc. stands at 70 power units.

When marketing his exclusive trucking service to shippers, Wilson does not offer discounted rates. Rather, he pitches them better service: He can answer all their transportation needs with one phone call. In 1999, Wilson brought the Qualcomm system to his fleet. Satellite tracking is his latest sales pitch.

“We got it mostly out of curiosity to see if it would work,” Wilson says. “Now we sell the satellite along with [the service],” he says.

The dispatch team at F.D. Wilson’s 70-truck fleet consists of four people: Glen Bardon and Teddy Gandy, who schedule outbound and inbound van loads, respectively; and Jim Marton and Pat Marton, who arrange all the outbound and inbound flatbed loads. The average outbound trip is about 800 miles. The dispatchers look for straight-shot inbound loads that fall within 200 miles of the yard, Bardon says.

One of F.D. Wilson’s best customers, a manufacturer of industrial garbage compactors, uses the carrier to deliver its products to all 48 states and Canada. With trucks all over the country, at times they are shorthanded on equipment. In these circumstances, F.D. Wilson, Inc., brokers its loads to other carriers.

To the extent that shippers won’t give F.D. Wilson all its business, Wilson has found that it’s usually not over the rate. Instead, they are hesitant to put all their apples into one basket, Wilson says, adding that some customers will hold 20 percent back for other carriers.
By being the exclusive outbound agent for several of its customers, F.D. Wilson, Inc., often gets first claim on its customers’ inbound loads, Marton says. They still use agents and brokers for the majority of their backhauls, however. Wilson says he prefers to use agents, as opposed to brokers, because then he can bill shippers directly and pay agents a percentage.

Running trucks longer
In the mid-to-late 1990s, business was booming at both companies, and Wilson was coasting toward retirement. But along came what everyone is calling “the perfect storm” – high increases in fuel and insurance, poor rates and low used truck values. Once again, it became necessary for Wilson to adjust. With two established companies, however, radical change was difficult. Rather than change overall operations, as he had done before, Wilson focused on running equipment longer and watching safety even more closely than before.

Wilson has traditionally kept his equipment on a four-year trade cycle, but with the downturn in used truck prices, Wilson decided to extend that cycle to at least five years. Starting this past March, when his trucks reached the four-year mark, Wilson decided to hold on to them.

“They are worth as much a year from now as they are right now,” Wilson says. Mike Colvin, F.D. Wilson’s maintenance director, is not concerned about extending trade cycles. Colvin says he has had to overhaul only one truck in the nearly 30 years he’s been at F.D. Wilson. The company keeps a tight rope on its maintenance schedules. At 10,000 miles, a mechanic inspects the entire truck. Oil changes are at 20,000 miles using Chevron Delo.

Watching safety
To encourage safety, Wilson pays its drivers a weekly safety bonus if drivers “have a safe week and make all their deliveries on time,” he says. The weekly bonus is 3 cents per mile driven. The typical bonus is about $100 extra each paycheck, Wilson says.

The company saves some money on compliance by performing drug tests in house. Kathy Christian, the safety director, is licensed to perform the pre-employment and random drug screens. Outsourcing the breath alcohol and drug tests, for example, costs $15 and $50, respectively, each time, says Christian, who has been safety director for 12 years. The breath alcohol tester cost $2,000 two years ago, but “we’ve saved more than we paid for it,” she says.

Rising insurance premiums have meant some changes in F.D. Wilson’s traditional recruitment and training regimen. The company once had a driving program where it would bring someone into the shop, familiarize him with trucks, and then team him up with an experienced driver until he received his commercial driver’s license.

“We canceled that program because the liability was too great,” Christian says. The company has about 50 percent turnover, she says. Drivers seem to go in six-month cycles. The main reason for quitting, especially with the younger drivers, is their family situation.

Economic outlook
As to the future of his business, Wilson says he is waiting for answers. The first question, especially for small carriers, is what is happening to the excess freight in the market from the bankrupt carriers. Theoretically, it should push the rates up, he says, but so far he hasn’t seen that happen. He expects more freight to become available, but he doesn’t know where it will all be going.

“I don’t know if it’s all going to the big boys or whether we’ll manage to get some,” he says. One thing is certain, however, for the survival of trucking companies, he says. “The rate structure will have to go up. We’ve cut all we could.”

Like Epperson Trucking, the future of F.D. Wilson may also depend on finding a buyer sometime down the road. Although not a major concern of Wilson’s at this point, the next generation of Wilsons – his three daughters – do not appear interested in inheriting a trucking business. If he must sell, he has learned from experience what adds value to a trucking company: its customers, its employees and its reputation.