Most men with families to support wouldn't have the confidence to resign from a job a year short of a pension, in order to bet their future on an unproven idea. Then again, most men aren't like Phillip C. Yeager.
Yeager, who died last week at 80 of complications from a heart attack, built the Hub Group from a struggling startup into the nation's largest intermodal marketing company and one of the largest truck brokers, a publicly traded Fortune 1000 company with more than $1.8 billion in annual sales.
Intermodal marketing companies were not in the industry vernacular in 1971 when Yeager resigned from Penn Central Railroad to found Hub City Terminals Inc. IMCs then were known as shippers' agents -- intermediaries who booked intermodal shipments with railroads. It was a disjointed, highly competitive business with a high degree of mistrust between shippers' agents and railroads.
Yeager was born in Bellevue, Ky., the son of a butcher. He served in the Army at the end of World War II, and graduated from the University of Cincinnati, which he attended on a sports scholarship before his athletic career ended when he broke his back playing football. He worked as a warehouse manager before entering transportation in 1952 with the Pennsylvania Railroad.
He spent 19 years with the railroad, mostly in piggyback, as intermodal rail then was called. Railroads had been able to offer trailer-on-flatcar service after an Interstate Commerce Commission decision in 1954, but they were slow to capitalize on the opportunity. They treated piggyback as an add-on to their regular business, and did a poor job of marketing it.
At 43, Phil Yeager was frustrated, and saw an opportunity. He quit the railroad, which by then had been merged into Penn Central. He and his wife, Joyce, sold their house and moved from New Jersey to the Chicago suburbs. They rented a windowless 110-square-foot office, and Phil bought a 7-year-old Volkswagen and began making sales calls.
"When we started, we didn't expect much more than having a couple of employees, working hard, and building a nice family business," he said in a 1991 interview. But Yeager soon discovered he'd gotten in on the ground floor of a growing industry. After a slow start -- Hub booked 900 trailerloads its first year -- the fledgling company began attracting larger accounts, and revenue grew.
Yeager's experience and contacts during years at the railroad gave him a leg up. "I believe that I was the first shipper agent with railroad experience," Yeager said in a Hub Group history that was published last year. "I was sincere and truthful, and I knew the good and bad of the railroads. I had a broad view of both the railroad and the shipper agent industry."
In 1975, Yeager and his wife came up with a novel idea for expansion. They created a series of Subchapter S corporations, named for a tax-code provision that gives small corporations the option of being taxed as a partnership to escape corporate income taxes. Yeager searched for entrepreneurs, preferably with railroad experience, who were willing to own and manage Hub offices around the country. There were 22 such offices by 1985, when Hub City Terminals became the Hub Group.
Creation of the Hub Group helped the company market its services to Fortune 500 companies, most of which still weren't using intermodal. So did joint-service agreements a few years later between trucking companies, led by J.B. Hunt, and railroads.
As its IMC business grew, Hub expanded into truck brokerage, consolidation and door-to-door distribution. In 1996, 25 years after Yeager opened his first office, the company went public.
Hub now is headed by Yeager's sons David, chief executive, and Mark, president. Phil Yeager remained active as chairman, company spokesman and an industry advocate until his death. He was a familiar and popular figure at industry gatherings such as the annual Intermodal Expo.
Over the years, he was recognized with the Salzberg Practitioners Award from Syracuse University, the Presidential Medal of Dowling College, the Silver Kingpin Award of the Intermodal Association of North America, the Connie Award of the Containerization and Intermodal Institute, and as the Intermodal Transportation Association's man of the year and the New York Traffic Club's Transportation Person of the Year; he was also inducted into the Chicago Area Entrepreneurship Hall of Fame.
Joseph Bonney can be contacted at email@example.com.