Article

One Truck To 21,000

From owner-operator to mega fleet, swift has grown through strategic acquisitions.

March 2006, TruckingInfo.com - Feature

by Jerry Moyes Chairman/CEO Swift Transportation Inc.

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In the '60s, Jerry Moyes started his trucking career in Phoenix, Ariz., with one old beat-up Diamond T, hauling steel out of the Port of Los Angeles and backhauling cotton and citrus. Last year, he retired as chairman and CEO of the nation's largest publicly traded truckload company, Swift Transportation, with more than 18,000 power units and another 3,000 owner-operators.

Under the regulated trucking environment, Moyes grew his company, as others did, by acquiring operating authorities. The first big break came when Swift Meat Co. opened its doors in Tolleson, Ariz., and started a trucking subsidiary to haul its meat – Swift Transportation. The company soon got into financial trouble. The owner "went through the money and we basically were able to buy what remained the day before the IRS shut the door," Moyes said in a 2004 interview with HDT. "We bought basically the shell company – but it had an ICC number. It was the key to the door."

However, that authority was only contract authority for the meat plant. Over the next 10 years, Swift's big challenge was to prove the need for its services in other commodities and lanes to obtain additional ICC authorities.

"All through the '70s, one of the huge challenges and innovations was in getting ICC authority, and becoming creative in how to obtain these authorities," Moyes says. "A lot of people in the industry don't really understand how challenging that was."

He tells the tale of a shipper who wanted Swift to move an unusually large concrete pipe for him. In order for Swift to get the needed authority, Moyes told the shipper, "You've got to get on the phone and call all these trucking companies and tell them you have this need coming up and see if they can handle it." The shipper told Moyes he didn't have the time and told Moyes to handle it. "So I sat down at his desk, and used his name and called these different carriers," Moyes recalls. "One of them – the guy was someone who used to work for me – and he said, 'Damn it, Jerry, I know that's you!' But we got the authority."

By 1980, when the industry was deregulated, Swift had grown to 150 trucks and had approximately 270 different operating authorities.

During the '80s, the challenge shifted to handling cash flow, Moyes says. "We were growing at 25 percent a year and non-public. It was very, very challenging to grow a company as fast as we did and do it through internal cash flows."

Moyes decided that in order to continue this rate of growth, he would need to buy other companies. Starting in 1988, Swift made a total of 13 acquisitions, coming close to Moyes' goal of one acquisition a year and making up half of Swift's growth.

"Our first acquisition, Cooper Motor Lines, really opened us up into the East and Southeast markets," Moyes says. "Up until that time, we were primarily a western carrier."

By the time it went public in 1990, the company had more than 1,000 trucks, Moyes says, growing from about 300 trucks in the mid-'80s.

Over the years Swift acquired assets of companies such as West's Best Freight Systems, East-West Transportation Inc., Missouri-Nebraska Express Inc., the dry freight van division of Navajo Shippers, Direct Transit, Cardinal Freight Carriers, Merit Distribution Services and Mexican company Trans-Mex Inc.

"These acquisitions gave us – number one – drivers," he says. "Second, they gave us different geographical presences, like the Trans-Mex acquisition. We could not do business in Mexico, so this really opened up a huge opportunity." And in some cases, an acquisition helped expand Swift's customer base. "A company could have a big customer that we had been unable to do business with, so it could be adding a significant presence with a major customer."

Swift's 2001 merger with M.S. Carriers created a huge truckload entity with 15,000 tractors and 45,000 trailers. The merger was an ideal opportunity, Moyes said at the time, because while both companies focused on short-to-medium length of haul, regional operations, Swift was stronger in the western part of the country, while M.S. Carriers operated primarily in the eastern United States and in Mexico.

At the time of the merger, M.S. Carriers was about half the size of Swift, meaning a 50 percent jump in size for the carrier. "We were at $1.4 billion, and M.S. Carriers was about $700 million," Moyes recalls. "It was probably our most challenging acquisition, primarily because of the size, but it's turned out to be very successful. We got very good drivers, very good personnel, and retained most of their customer base."

Considering the number of acquisitions, Moyes said, they went relatively smoothly. "There are a few nightmare stories, but we won't go into them," he says with a laugh.

Moyes may have stepped down as head of Swift, but he's far from retired. He's in the process of buying Waco, Texas-based regional LTL Central Freight Lines. That's in addition to Central Refrigerated Services, which bought the assets of the former Simon Transportation from bankruptcy in 2002. With the help of President Don Orr, Moyes Enterprises oversees a specialty motorcycle company, an aviation services business, an air transportation carrier, an Indian casino company, a restaurant chain, a magazine and a variety of real estate development projects. Moyes also owns SME Steel, a fabrication and erection company based in Salt Lake City, Utah. He and his wife, Vickie, are also very active in helping those less fortunate, especially children. Moyes is also a big local sports supporter – co-owner of the Phoenix Coyotes NHL team, and a limited partner with the Arizona Diamondbacks.

A 2002 article in The Arizona Republic called Moyes one of the state's wealthiest men, "a high-energy hard-charger who hasn't forgotten his roots."

"I just like keeping a low profile," Moyes told the paper. "I don't need publicity. I don't have a big ego. I started out as an old truck driver."

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