When Steve Russell buys a trucking company, it’s not because he wants trucks. Drivers are the more important asset, said Russell, who has snapped up several trucking firms recently to expand Celadon Trucking, his $557 million company.
“When we make an acquisition we buy the tractors and then sell them off as quickly as we can,” said the chairman and CEO of the Indianapolis-based carrier. “We then take over the customer base and hire the drivers who meet our qualifications.”
On Feb. 29, Celadon acquired the assets of Teton Transportation, a truckload carrier in Knoxville, Tenn. That deal included about 180 tractors and 280 trailers. Russell plans to sell or lease that equipment and put Teton drivers in new trucks.
“Teton’s average tractor was six to seven years old,” Russell said. “They couldn’t buy new trucks.” That’s a common problem for smaller trucking firms that have seen Class 8 tractor prices rise by $50,000 or more since their last purchasing cycle.
Celadon, by comparison, has a young fleet, with an average tractor age under two years, Russell said. “I’ve talked to Teton drivers we hired, and they’re thrilled because they’re going from a seven-year-old truck to a one- or two-year-old truck.”
Those drivers aren’t just thrilled by new truck amenities. Operating older equipment more prone to break down can be hazardous to a driver’s career under federal rules that tie carrier safety ratings to driver behavior and vehicle citations.
“You don’t want to drive an old truck in the CSA era,” said Russell, referring to the Federal Motor Carrier Safety Administration’s Compliance Safety and Accountability initiative. Any citable vehicle defects and “it’s going to go on your record.”