John Simone spent his fifth day as president and CEO of LinkAmerica meeting the people who may hold the key to his new company’s success — truck drivers.
Difficulty recruiting truck drivers “is one of the challenges that keeps me awake at night,” Simone said in an interview from LinkAmerica’s Fort Worth terminal.
The former Greatwide Logistics Services president and COO was at the Texas facility Aug. 19 to greet new hires and meet old hands as part of his rapid “immersion” in the day-to-day business of the Tulsa, Okla.-based truckload carrier.
“I’m out here in one of our locations today because I want to talk to the drivers, and I’m personally welcoming new drivers to the company,” Simone told The Journal of Commerce. Those drivers, he said, are critical to expanding the business and improving customer service. “Without the drivers, we can’t move the freight.”
Simone joined LinkAmerica a month after the company was acquired by Tenex Capital Management, an investment firm that focuses on “middle market” companies such as $140-million-a-year LinkAmerica.
Despite economic uncertainty, transportation companies are attracting private equity investors who are drawn by the opportunity to “buy and build” larger enterprises by integrating several small to midsize companies.
LinkAmerica itself sprang from the integration of four trucking firms — Lane Freight, Washita Freight Systems, Interstate Express and Dannie Gilder — in 1996. It now has four divisions, Dedicated and Logistics Services, 53-foot Super Southwest and Super Southeast, LinkAmerica 57 and Teams. Expanding its business “is a top priority,” Simone said. “We’ll do that both organically and through strategic acquisitions.” Tenex and LinkAmerica are “actively looking for investments,” he said.
Plenty of transportation companies, particularly small, family owned firms, are looking for buyers.
The acquisition of Buske Lines by Gordon Trucking is one example of the type of acquisition and merger activity reshaping trucking at a level beneath the realm of billion-dollar market leaders such as Swift Transportation, Schneider National, FedEx Freight, YRC Worldwide and Con-way.
LinkAmerica’s purchase by Tenex for an undisclosed amount is another.
The Tenex acquisition gave LinkAmerica an infusion of cash, which the company is using to upgrade an aging fleet of 850 tractor-trailers and to add technology that will increase its network efficiency, safety compliance and improve customer service, which Simone says is his top priority. “We’re going to be improving the service experience. We’re refreshing our fleet, and investing in technology to support our customer base.”
LinkAmerica isn’t adding additional tractors to its fleet, but is replacing older equipment that requires more downtime for maintenance. That upgrade, along with the introduction of electronic onboard recorders for its trucks, will effectively create capacity by improving efficiency without expanding the fleet, Simone said.
“We’re getting a consistent (tractor) trade cycle in place so we can get our fleet refreshed, and that will add more capacity to our system,” he said.
Simone brings nearly 30 years of executive and asset-management experience with Ryder System, UPS Freight and Greatwide to LinkAmerica. “My experience spanned all the transportation functions from fleet operations to industrial engineering and procurement,” he said. “I grew up on the front line of the business,” managing fleets for Ryder and UPS, and then serving as senior vice president of truckload for UPS Freight after UPS’s acquisition of Overnite Transportation.
At Ryder, Simone was a regional fleet manager in the 1980s and 1990s, responsible for about 16,000 assets and 90 locations in the Northeast. “This business is all about the assets, and having an understanding of the trucking side of transportation, from maintenance to operations, will really help me in the CEO role,” he said.
At Greatwide, Simone integrated several disparate business units the $1 billion company acquired over the years, most recently Overton Transportation, purchased from Sysco in January.
“LinkAmerica acquired many small companies over the past number of years, and there’s some integration work to be done,” Simone said. “We’re focusing on density and optimizing the network where we need volume.”
In some ways, the billion-dollar companies and LinkAmerica aren’t that different. “Both Greatwide and UPS Freight have national footprints, but they’re regionally focused,” Simone said. LinkAmerica is a regional carrier, focused on the Southwest, South Central and Southeastern United States. “Many of the large long-haul truckload carriers are going to a short-haul regional model,” he said. With a 400-mile average length of haul, LinkAmerica is “already there,” Simone said.