Incoming ATA Chairman Steve Williams wants motor carriers to anticipate challenges decades in advance and to embrace change rather than fight it.
If you consider long-range planning to be three to five years, Steve Williams wants to challenge your thinking. The chairman and chief executive officer of Little Rock, Ark.-based Maverick Transportation often will talk about issues in decades rather than years during his upcoming tenure as chairman of the American Trucking Associations.
The past year has given the supply chain a taste of things to come, Williams says. “I have seen things since the fourth quarter of 2003 that I haven’t seen in 30 years in trucking, such as plants shutting down because they couldn’t get anyone to transport their products.” While the new hours-of-service rules are a contributing factor, Williams sees the current situation as the beginning of a long-term period of trucking supply lagging demand.
“America is facing a crisis,” Williams says. “How she intends to move her goods to market will be challenged.”
For Williams, the numbers clearly point to the urgency. The U.S. trucking industry already experiences chronic shortages of drivers. In the next 20 years, gross domestic product is projected to double. Meanwhile, the U.S. population is aging, which simultaneously will reduce the overall pool of workers and increase the number of workers needed to care for the elderly.
Williams cites a United Nations metric called the potential support ratio (PSR) – the number of people aged 15 to 64 for every person 65 or older. A hundred years ago, the PSR in the United States was 15 to 1. Today it stands at 5 to 1. Once the Baby Boom generation begins retiring early in the next decade, that ratio will drop further. By 2050, the United Nations expects the PSR in the United States to be about 3 to 1.
So freight demand will continue to rise, but the labor pool will dwindle. “You can’t deny this,” Williams says. “This is what’s going to happen.”
The numbers inevitably lead Williams to a discussion of truck size and weight. If volume must grow and the number of trucks is constrained by a labor shortage, then maintaining productivity requires larger loads. “It’s not a question of if. It’s a question of when and how.”
For anyone who knows Williams, his passion on this issue is no surprise. He is an activist, having served as co-chairman of Americans for Safe and Efficient Transportation (ASET), a coalition of shippers, carriers and other groups that seeks to raise the allowable truck weight to a 97,000-pound limit on a three-axle trailer. The result, ASET says, would be greater productivity and increased safety because vehicle miles traveled would drop. “We’re facing more congested roads,” Williams says. “How do we safely become more productive?”
Williams sees truck size and weight as an example of how the debate over trucking issues needs to change both within and outside the industry. He certainly appreciates the controversy within the industry. The most recent of Williams’ three terms as chairman of the Arkansas Trucking Association came while he also co-chaired ASET. Many of the state association’s largest members opposed heavier loads on the grounds that freight rates wouldn’t compensate them for the investment. For Williams, that’s a short-term issue and one that becomes less important as freight demand outpaces truck capacity. Long-term productivity is a bigger challenge.
But even if Williams can persuade his own industry to see the big picture, he recognizes that the traveling and voting public may not be swayed easily. That’s where technology comes in. Williams believes that the maturing and acceptance of technologies such as advance braking systems and rollover detection technologies will make more productive vehicles more acceptable to the public. But that’s a case the trucking industry must push aggressively.
“This is a tenacious industry,” Williams says. “It’s time to rally that strength. We can’t take tiny little steps and get the job done.” The industry simply can’t give in to the flawed public perception that big must be bad, he says. “Who are we going to blame that we cowered to the most vocal critics?”
Another issue that highlights Williams’ philosophy of engagement rather than isolation is taxes.
“This industry spent years opposing higher taxes,” Williams says. But by just saying no, the industry has given up opportunities to influence the form of taxes and where the funds are spent. The trucking industry should consider the impact and consequences of the various taxes it pays – excise taxes, highway use taxes, fuel taxes and so on. “Is there a more effective way to accomplish the same thing?” Williams plans to devote considerable effort in the coming year to rethinking how the trucking industry should be taxed.
Progressive thinking also comes into play in how Williams sees the more near-term and urgent challenge of low-emissions diesel engines. Like many other trucking executives and truck manufacturers, he wants to see a leveling-out of the pre-buy/no-buy cycle. Williams advocates tax credits or other incentives to encourage fleet owners to obtain new technology. Seeking assistance in helping the environment rather than opposing lower emissions should be the industry’s response. “Let’s be aggressive in promoting a positive environmental message.”
But being progressive may sometimes mean paying the tab for costs that the trucking industry has fought in the past, Williams says. “In general, the law of supply and demand has shifted.” He envisions a long-term period of economic opportunity for carriers that will give them the means to invest in solutions. “Going forward, what kind of corporate citizen will the trucking industry be?”
Cleaning up the image
Being perceived as better corporate citizens may help address the trucking industry’s poor public image, but much of that image stems from what happens on America’s highways. Williams doesn’t think the trucking industry should tolerate bad apples. He personally favors higher standards for new entrants. “I firmly believe that it needs to be harder to get into this industry and harder to stay in the industry. It is time for us to identify the bad operators and get them out of the industry.”
But Williams also believes that the long-term financial health and stability he sees for the industry will set the stage for a better image. “If carriers are beat up, broke and held down, you can understand why they are not the best representatives of the industry.”
This reasoning leads Williams to another controversial stance.
“I don’t think the ability to collect a fuel surcharge needs to be a competitive issue,” Williams says. “An appropriate national surcharge would help ensure carriers aren’t under a financial strain that might compromise public safety.” He admits, however, that this hot-button issue isn’t as high a priority for him as productivity issues. “That’s one I won’t fall on my sword over.”
Staying the course
In many ways, Williams sees his tenure as ATA chairman as continuing a philosophy espoused by current ATA Chairman Fred Burns. “Fred has heightened awareness of anticipating challenges.”
While Williams wants to raise awareness of some different challenges, he plans to help continue the momentum on many of Burns’ initiatives, such as tort reform. About half of the states are pursuing some kind of tort reform, and ATA needs to support those efforts, Williams says.
Another big concern for both Burns and Williams is the strength of the ATA Federation – the alliance of ATA, its councils and affiliates and state trucking associations. “Those pieces haven’t always felt mutual interdependence.”
Williams served on the Wren Committee, which recommended major restructuring of ATA responsibilities in the late 1990s. Today, Williams accepts that some of the committee’s ideas were poorly timed or poorly implemented. “ATA has done a good job of living on a budget,” he says. “But in some cases, we were cutting into the bone.” He cites, for example, the elimination of ATA’s tracking of state laws and regulations, a function that has since been restored.
Like Burns, Williams disdains carriers that don’t get involved in regulatory and legislative advocacy through ATA or trucking associations in their states. “I get impatient when people don’t do their part.”
Nobody can question Maverick Transportation’s commitment to and involvement in ATA. As Williams prepares to become ATA chairman, two of Maverick’s senior executives are already leaders in ATA councils. John Culp, Maverick’s executive vice president and chief financial officer, chairs ATA’s National Accounting and Finance Council. Mike Jeffress, Maverick’s vice president of maintenance, chairs the Technology & Maintenance Council. Williams jokes that some may think it’s a conspiracy to take control, but he insists that the simultaneous chairmanships are a coincidence that simply reflect Maverick’s involvement in ATA.
Serving at another ATA
If anyone can provide insights into what Williams’ tenure as ATA chairman will be like, it’s probably Lane Kidd, president of the Arkansas Trucking Association. “He’s not afraid to tackle an issue,” Kidd says. “Association executives long for leadership that wants to get things done.”
What’s remarkable about Williams, Kidd says, is not that he has built Maverick Transportation from one truck to 1,000. Instead, it’s Williams’ concern for the larger community that distinguishes him. Kidd points to the association’s successful effort last year to provide tax relief to carriers that had been caught up in the Oklahoma registration problem. Only three of 18 board members were affected. But Williams, who was serving as chairman and was not affected by the registration issue, devoted considerable time and attention to lobbying for the legislation. According to Kidd, it became the only bill that lowered taxes out of the 2,000 bills passed by the legislature in 2003.
“There are very few self-made executives who are selfless in their outlook,” Kidd says. “Steve has an uncanny ability to step away from a problem and see the big picture. He doesn’t believe you do it the same way just because it has always been done that way.”
Consistency helps Maverick Transportation stand out
With a name like Maverick Transportation, you would expect the unconventional, right? Yes and no. The Little Rock, Ark.-based company – like founder, Chairman and Chief Executive Officer Steve Williams – defies a simple characterization.
Maverick is a young company that was founded out of a desire to do things differently. In late 1979, a 26-year-old Williams quit in anger after his company rescinded a promised promotion. Williams had already sold his house in Little Rock in preparation for moving his family to Kansas City.
Within a few weeks, Larry Leahy approached Williams about forming their own trucking company. Like Williams had been, Leahy was a manager at flatbed carrier Steel Haulers. Both were sons of top Steel Haulers executives, but they had been frustrated by their failure to influence the direction of the company.
“We were the young turks who were constantly bucking the system,” Williams says. “We wanted to be our own bosses, and the only way to accomplish that was to leave.”
Williams and Leahy spent the holiday season completing their business plan, and formed their business, Maverick Transportation, in January 1980. Why Maverick Transportation? “Trucking has always been western to me,” Williams says. And the partners wanted a name that matched their swagger. Maverick refers to the classic television show by that name and the show’s heroes, Old West gamblers Bart and Bret Maverick.
At the beginning, Williams and Leahy weren’t just acting like gamblers. They lived the part. Williams had poured the entire $8,900 net proceeds from selling his home into the new venture. The partners lacked the money to purchase operating authorities through the Interstate Commerce Commission, so they seized the opportunity under deregulation’s modified procedure. For various reasons, Maverick’s life began in Texarkana, Ark., although Williams and Leahy planned eventually to move the company to Little Rock.
On Maverick’s first load – a March 17, 1980, haul from Hot Springs, Ark., to Bowling Green, Ky. – the wary owner-operator insisted on half his payment upfront, in cash. Maverick even had to slap on a handwritten placard for the truck.
Maverick moved to Little Rock about a year later. In 1983, Williams bought out Leahy. In May 1984, the company began a gradual transition from owner-operators to company drivers.
Since April 1991, Maverick Transportation has operated company trucks exclusively. As Maverick grew and matured, it chose to differentiate itself in the marketplace through standardization of equipment and services. In other words, the carrier became something of an industry maverick by ensuring that everything was the same.
Every truck and trailer is spec’d the same, so customers know exactly what they are getting, says President and Chief Operating Officer Stephen Selig. “We want everything to be uniform.”
For flatbed carriers, the variety of commodities hauled and load securement requirements make standardization challenging. But each Maverick trailer is equipped with the same securement devices and tarps. And the company converted to lighter-weight flatbed trailers, giving it the ability to handle 51,000-pound loads when many competitors were limited to 46,000. Maverick doesn’t insist on a uniform for drivers, although it does maintain a strict code for appropriate dress and grooming.
Training also is essential to uniformity and ensuring Maverick’s attention to detail in load securement, tarping and on-time pickup and delivery, Williams says. “It’s basic stuff, but it’s the stuff that makes you unprofitable if you don’t do it.” Today, the carrier is developing a computer-based orientation that will allow drivers to complete classroom training at their own pace and will free up more time for load securement training. In fact, Maverick is planning a new training facility that will include three training bays for load securement. The current facility has one bay.
Maverick embraces technology throughout the operation. It was an early adopter of truck stop scanning for trip documents, for example. Although Maverick researches and tests equipment and technology before buying, proving a return on investment doesn’t hamstring the company. For example, Maverick decided two years ago to install the Eaton Vorad collision warning system on its entire fleet after about eight months of testing. But that decision wasn’t made on a strict ROI basis, says John Culp, executive vice president and chief financial officer. “We’ll never prove it’s a good investment, but we know it is.”
Although Maverick is less than 25 years old, its management team is stable and experienced. Among the nine senior managers – vice presidents and higher – the average tenure at the company is 17 years. Selig has been with Maverick for 21 years. Culp has been there 15. Darius Cooper, who drove Maverick’s first company truck in 1984, is now Maverick’s vice president of operations.
Maverick has grown mostly internally. A few acquisitions have helped the company land business in a key lane or helped position it for expansion westward. Most recently, it acquired Scottsboro, Ala.-based Parrett Trucking, which operates 140 trucks, mostly through owner-operators. Parrett Trucking, which will be operated separately, gives Maverick access to independent contractors once again.
By yearend, Maverick’s fleet should exceed 1,000 trucks, but that’s just more of the same.