101 National Freight Inc 1970s – Full Throttle CHAPTER 13 1970s: Full Throttle Full Throttle 1. Doing something as well and with as much energy as possible. 2. To engage in an activity with total commitment. By the beginning of the 1970s, many of the necessary pieces were in place to transform National Freight from a New Jersey–only transportation company to a regional player, and then to continue building to cover a territory that encompassed the entire East Coast. As a new decade began, it was time to fill in the remaining pieces and secure as many hauling opportunities as possible. National Freight had grown to 500 power units, 1,500 trailers, 12 terminals, and a growing staff of employees. It had become a very significant company. Everything Bernard Brown and his staff did was pedal to the metal—terminal expansions, new operating authorities, new routes, expanding real estate holdings, and a staff that managed daily mayhem deftly, if not with the aggressive management style typical of trucking companies of the day. Gary Galati, who started at National Freight in 1971, remarks about the Vineland headquarters: “The office had a vibe of energy and organized chaos. If you could handle energy, vim and vigor, you survived the daily battles. It was old style management based on hard-hitting personalities, underlined by a can-do mentality and based on trust. We had a lot of experienced trucking personnel, but many didn’t last. You had to learn, and feel, the National Freight-way. Either it hardened you, made you better, or you were gone.” Ann Geraci recalls how once a psychiatrist moved into an office that Bernie leased him at the Vineland headquarters.
102 1970s – Full Throttle National Freight Inc After a few days of listening to all chaos in the office, the psychiatrist asked Ann, “How can you work while all of that is going on?” Ann did not think twice and replied, “Well, I’m used to it.” He decided to relocate soon after. Tina Ritondaro, a twenty-four-year employee and now Director of Benefits Services at National Freight, states, “It was a combination of fun days and other days when you hit your head against a wall. But it was always dynamic and exciting.” They were dynamic times all around. If any trucking company owners expected for business to calm down after the many changes of the 1960s, they were in for disappointment—the 1970s were a tumultuous time for the industry, as they were for the country as a whole. The effects and ongoing efforts of the Civil Rights struggle carried on as marginalized people continued their fight for equality, including women, African Americans, Mexican Americans, and Native Americans. All companies had to review their employment policies or even draft new ones. Meanwhile, fuel costs ate up trucking companies’ revenues due to rising prices and limited gasoline availability. In the early 1970s, the American economy floundered due to an oil embargo by the Organization of the Petroleum Exporting Countries. This embargo created an energy crisis in the West, where Middle Eastern oil had become a dependable commodity. An economic recession followed as gasoline prices doubled and then tripled. Federal regulations enforced gas rationing and lower speed limits, while Congress passed new fuel economy laws. All of this impacted trucking companies in a major way, and although the oil embargo lifted in 1974, the economic impact persisted. Bernard Brown’s response to all this change and uncertainty was the same strategy he had developed over years of both hardship and success—keep moving forward, keep expanding, keep trying new things. What transpired for National Freight in the 1970s was a “Good morning, National Freight.”
103 National Freight Inc 1970s – Full Throttle combination of additional acquisitions, astute legal moves, and significant growth throughout the company’s personnel, driver ranks, terminals, routes, warehousing, and new business entities, all of it fueled by a culture of trust and aggressive, dogged determination. ADDITIONAL ACQUISITIONS AND NEW TERRITORIES Three competitors were acquired in the 1970s, supplying additional portions of the plethora of operating authorities needed to continue expanding National Freight’s footprint along the East Coast and then along their first expansion westward to Texas. Bridgeton, New Jersey–based Cross Transportation was acquired in 1971. As with other acquisitions, Cross held two highly sought after commodities: drivers and operating authorities, which expanded the customer base, routes, and revenue. One of the key employees re-hired by National Freight was Bill Vennell. What impressed Bill about National Freight was a double-edged sword: “National Freight had more business than they could handle. That was the good news. The bad news was that if they couldn’t figure out how to better manage their operations, the weight of the business might just collapse upon them and growth would be stymied.” Bill, a forty-five-year employee, recalls how they overcame these obstacles: “They continued to grow and prosper from the excellent training they provided drivers and by motivating their employees.” In the early 1970s, the company developed a relationship with Philadelphia-based Food Fair to haul canned vegetables. When Food Fair desired to expand into Florida, this prompted Bernard to acquire, in 1974, Northeast (Northeastern) Trucking, based in Charlotte, North Carolina, who held general commodity operating authorities from Florida to the mid-Atlantic. Now National Freight had Operating Authorities up
104 1970s – Full Throttle National Freight Inc and down the entire east coast—Florida to Maine. Canned vegetables went south, while frozen orange juice concentrate was transported north. To further expand National Freight’s presence in Florida, Crown Motor Lines was acquired in Jacksonville, Florida, in 1979. This LTL non-union carrier held intra-state authorities for all goods, one of only three companies in Florida with these capabilities, a significant competitive advantage in the booming Florida market. Crown operated terminals in Tampa, Orlando, and Fort Lauderdale. Now over two hundred trucks daily were riding the interstates north and south. These were the key pieces to National Freight’s acquisition drive, and they expanded the company like never before. ASTUTE LEGAL MANEUVERS During this long drive to create National Freight’s encompassing footprint, additional operating authorities were still required to fill in the gaps and continue to accelerate Bernard’s plan. Now that the company had a steady stream of revenue, Bernard decided to pay the price for big guns to secure those needed routes. First he hired one of the biggest, baddest, and meanest ICC-specialist attorneys in Washington, DC. Dave McDonald stood an imposing 6’6” and his bark was as bad as his bite. He knew the interworking specifics of the ICC’s regulations and he was skilled at understanding the powers there to get what his customer wanted—an ICC number that allowed National Freight to haul regulated goods under its own authority. Dave constantly argued cases on National Freight’s behalf and was very successful in securing additional Operating Authorities. REAL ESTATE AND EASTERN STATES DISTRIBUTION As the company’s growth continued unabated during the 1960s and 1970s, it became evident to Bernard that real estate was becoming a large part of his business model. Terminals with large tracts of land were required for maintenance bays and for parking trucks and trailers. Instead of leasing properties, Bernard wisely shifted to purchasing land and real estate, always telling his staff: “Why rent when you can buy?” To that end, if a new terminal was required, instead of purchasing five acres Bernard had the vision to purchase fifty acres, believing his business would continue to grow and necessitate a larger terminal expansion. Alternatively, if the land had appreciated and a buyer surfaced, he would sell, then purchase another property to re-locate this terminal. As well, these additional acres
105 National Freight Inc 1970s – Full Throttle could be used to construct a warehouse, as many customers approached Bernard during this period about holding some of their excess inventory. In fact, this customer need surfaced in the 1960s and only grew over time. If a customer had a need to store inventory due to overflow, Bernard was willing to help. At first, this overflow trickled in, as it was not exactly business National Freight was actively seeking to gain from its customers. But glass bottles, fiberglass insulation, and aluminum cans needed to be stored, and a growing number of customers sought the ever-willing Bernard Brown to help them out. After some time, with many customers asking for warehousing of their goods, it became clear that the smart play would be to build more warehouses for the express purpose of renting out space. In addition to helping customers and receiving rental income for the space, real estate appreciates over time. It was a no brainer. To expand the warehousing thrust further, Bernard started Eastern States Warehousing. He also sub-leased excess space in these warehouses until he needed that extra space to meet warehousing demands from customers. It was not long before he started making big purchases to expand his warehousing realm. In 1971, the company purchased the existing plant of Universal Rundel for a whopping $1.2 million. It filled up quickly. Then in the mid-1970s, National Freight purchased an old Procter & Gamble plant in Baltimore for that customer’s warehousing needs, and also a plant from Swift Meats in Kearny, New Jersey. Back in Vineland, the company soon outgrew its headquarters building, requiring the purchase of houses along both sides of adjacent Grant Street. Here, twelve houses were eventually purchased where staffers worked, creating the “NF Neighborhood.” Understanding the value of real estate appreciation, Aerial view of the Lawnside, New Jersey terminal/warehouse in the late 1960s.
106 1970s – Full Throttle National Freight Inc Bernard began buying many other real estate properties: retail shops, strip malls, raw land, and many buildings along Landis Avenue in Vineland. As Jeff Brown recalls, “It was always easiest to point out the buildings along Landis Avenue that my father didn’t own.” And he was always on the lookout for new property to acquire to advance his holdings. Lee Robledo, a thirty-year employee at the company, recalls when Gene Devers joined Bernard to inspect a piece of property in Pennsauken, New Jersey, for acquisition. Bernard asked Gene, “What do you think of this building?” Gene took in the less-than-impressive building and responded honestly. “Mr. Brown, it looks like a dump.” “Gene,” Bernard replied with a smile, “that’s why you’ll never have money.” Yes, Bernard took plenty of risks, but most of them turned into a pot of gold. These real estate holdings eventually became Vineland Construction, with teams in place capable of buying, designing, engineering, building, and managing the vast number of real estate properties accumulated over many years. With an ever-expanding network of terminals, employees, and drivers, as well as the high turnover throughout the industry and even within National Freight, Bernard was obsessed with keeping a pulse on the business. He wanted to know the good news but mostly focused on the bad news: What is going wrong? How can we improve? Where are the hurdles and how can we overcome them? He sought advice from his troops in the field, though he always made the final call. He understood that the difficult decisions were his to make, and he never shied away from them. When business progressed as planned, only quarterly meetings in Vineland with his terminal managers were required to review these matters. Conversely, if business was in decline, no matter how small or temporary the drop, terminal managers
107 National Freight Inc 1970s – Full Throttle were summoned monthly. These meetings were not for the shy or timid. Terminal managers performing below expectations were called out. An air of intensity filled the room, and those with little backbone sat at the back of the room, fearing that closer seats would be in Bernard’s line of fire. Paul Nolf recalls these fiery gatherings: “He was very demanding, a tough task-master, but at the same time if you knew your business and had answers you survived. Otherwise he had no use for you. He was tough on everyone, but it only made you better.” After the reprimanding stopped, Bernard would always close in a positive fashion, encouraging his terminal managers to keep working hard and make the business successful. On a more regular basis, he would frequently walk into the dispatch center in Vineland, the heartbeat of his trucking world, to get a feel for the traffic activity. By glancing at the dispatch board covering three walls and filled with colored paper cards in slots—each day a separate color—which were placed in geographical locations, he could quickly observe the raw movement of freight, as well as where trucks and trailers were—and where these were not supposed to be. Were matters running smoothly or in crisis mode? If generally pleased, he left quickly. However, should the board tell an unflattering story, he headed straight to sales, cajoling their
108 1970s – Full Throttle National Freight Inc immediate action: “Fill the board. Get more backhaul. We have got to balance the routes. Get more business!” Bernard did not hesitate to take steps to correct any issue, and as a general rule he liked for action to be taken quickly and decisively. Paul Nolf recalls a conversation when Bernard said something that stuck with him his entire life: “Son, I would be more upset with you for not making a decision than for making a wrong one.” Bernard’s take on it was this: Make a decision and move forward. Learn from mistakes, but don’t sit there and do nothing. He also gave unlimited authority to his team leaders, imploring his terminal managers, “Run this terminal as if it was yours because effectively it is!” This approach with his terminal managers both empowered them and held them to high expectations—for if the terminals failed to perform, they had no one else to blame. But Bernard wasn’t the only one ensuring that performances were up to standards. Ever the organized person, Bernard demanded that same functionality of his staff, and so did Mrs. Brown. Shirlee Brown became the standardbearer for all rules at the Vineland headquarters. Cleanliness was her top priority. A directive was issued that everyone’s Central Dispatch, 1970s
109 National Freight Inc 1970s – Full Throttle desks had to be cleared every day. All photos had to be appropriate, of family, framed, and well positioned. When she felt the office was too disheveled or not up to her standards, she would issue a directive to have it tidied up. Eventually a tidiness committee was established to codify her rules. Daily inspections were conducted after hours. If a desk was deemed not up to Mrs. B’s standards, a “Thumbs Down” or “Unhappy Face” photocopy was placed on this desk. Once, Mrs. B walked around with the tidiness committee after hours and noticed one of the coffee areas with coffee cups soaking in the sink. She threw them all away. Eating in the office was strictly forbidden. Ceiling tiles, stained from cigarette smoke, were replaced frequently. Although it might have seemed strict, this cleanliness created a much-needed calming influence amid the daily chaos in the office. Punctuality was paramount to Bernard, and his keeper of time was Tina Ritondaro, who would stand at the back door, notepad in hand, to register those tardy. To further encourage promptness, at the company Christmas party held in the maintenance area of the Vineland terminal, Bernard bought presents for each employee—and for those employees perpetually late to work, he gifted them an alarm clock! Lawnside, New Jersey terminal
110 1970s – Full Throttle National Freight Inc As critical as it was to demand excellence from employees working for the company, Bernard also understood the importance of hiring the right people in the first place. He did not focus exclusively on those qualifications that could be spelled out on a resumé, and he had a unique style of interviewing that many in the company recall well. Many of his interview questions to a potential new employee were not regarding the person’s experience or work ethic, but were instead distinctively thoughtful. He wanted to know about the character of a person—such as values, hobbies, and interests. He wanted to know who they were, not simply what they had done. He cared about all of his employees as people, and as tough as he was, he always took a moment to inquire about personal lives, asking staffers, “How’s the family? How’s your husband?” Sometimes workers had to hear things they did not want to hear, but they always knew where they stood with Bernard Brown. He was genuine and authentic, caring and loyal. Tina Ritondaro comments, “At the end of the day, his employees were loyal to him and he to them. He cared and he wanted you to be successful to make you and the company successful. It was tough love, but Mr. B cared about you. Everyone knew it. He had your back if you were a good employee.” Bernard did not ask his workers to commit to the company any more than he was willing to do himself. Almost every night, after dinner with his family, he returned to his office to think… then think more. Many recall his nightly presence seated behind his desk, stroking paperclips on his desk, thinking through the many issues of today and those likely to occur tomorrow, and next year. And weekends were just another day for business. Each Saturday his chief lieutenant, Ed DeFilippis, Vice President of Operations, would join him to review the next week’s shipment activity. There was no rest for the weary, and as the 1970s wore on, it continued to be clear that there was no stopping Mr. B.
111 National Freight Inc 1970s – Full Throttle
New corporate headquarters, Vineland, New Jersey, 1974
113 National Freight Inc 1970s, Part 2 – All Cylinders Firing CHAPTER 14 1970s, Part 2: All Cylinders Firing There was no denying it: National Freight needed some space. By 1972 the company had purchased all the residential structures along both sides of Grant Avenue, and these homes held employees of various departments. Still more room was needed, so the decision was made to raze the “NF Neighborhood” and construct a new, modern building to serve as company headquarters. In 1974, construction was completed on the two-story office headquarters building located at 71 W. Park in Vineland. The old headquarters building, located at 57 W. Park, became the maintenance building. Though the new building provided substantially more floor space, the office layout did not change from the previous location. Both the upstairs and downstairs remained structured like an old-fashioned typing pool, with all the desks jammed together in a big room so that Bernard Brown could easily observe the employees’ activity with his penchant for “walk-around management.” The landscape covered by National Freight’s terminals had changed dramatically from its early days. By the time the new headquarters opened, if you were to take a tour of all the terminals, you would have to make stops at eighteen different locations: General Commodities Terminals • Vineland, New Jersey • Bridgeton, New Jersey • Freehold, New Jersey • Jersey City, New Jersey • Lawnside, New Jersey • Salem, New Jersey
114 1970s, Part 2 – All Cylinders Firing National Freight Inc • Somerville, New Jersey • Clarion, Pennsylvania • Meshoppen, Pennsylvania • New Stanton, Pennsylvania • Philadelphia, Pennsylvania • Littleton, Massachusetts • Orangeburg, New York • Richmond, Virginia Special Commodities Terminals • Seaford, Delaware • Orlando, Florida Other Terminals • Fairburn, Georgia • Waxahachie, Texas As the decade wore on, more terminals would continue to be added. All this business and growth meant more people were needed to transport the goods—which meant more drivers. DRIVERS – THE ENDLESS SEARCH Maintaining an adequately large roster of skilled, committed drivers was a constant struggle, as National Freight had to deal not only with the demands spurred by the growth of new routes and new customers, but also with the turnover common to the industry as drivers left to pursue opportunities elsewhere. To fill each cab, Bernard and his team tried every possible angle to find more drivers. For example, they ran ads in local newspapers: Another, even more creative tactic was to dispatch staff to truck stops in order to find potential drivers and solicit their interest. When a new driver was hired, the driver was brought to Vineland for two days of training provided by various staff department members in Safety, Maintenance, and Risk. The company had a mix of drivers with 75 percent being owner-operators/ independent contractors, 25 percent being company drivers. Of course, the drivers were and are of critical importance to the company’s success, but they are still only one piece of the puzzle. Bernard was also continually seeking out new revenue streams and ways to grow the business. Be home every weekend. Safety-first focus. Successful, familyowned company.
115 National Freight Inc 1970s, Part 2 – All Cylinders Firing Safety first: National Freight drivers, late 1960s and early 1970s
116 1970s, Part 2 – All Cylinders Firing National Freight Inc LEASING COMPANIES Over the years, National Freight developed a number of leasing entities for its company vehicles such as Landis Leasing, Five-Star Leasing, and Transnational System Leasing. Mostly, these were intended to make available power units to non-company drivers—independent operators who could not secure financing from conventional loan sources. National Freight jumped in to help them, knowing this would be another way to entice new personnel and meet the ever-growing need for driver talent. As well, since National Freight owned the truck, that truck’s driver would likely think twice about leaving the company. It worked like magic. In addition to leasing trucks to their drivers, National Freight also leased trucks to other enterprises. Conestoga Leasing was this special entity created by National Freight—a new approach to providing a unique service for customers. If companies wanted to control their own destiny and have their own trucks instead of using National Freight for their transportation needs, National Freight willingly leased them trucks. It made economic sense and was much more efficient for these companies. They did not have to worry about the many licenses and permits, not to mention the necessary maintenance, repairs, and the burden of taking on debt from a bank—all significant and costly hassles. Instead, National Freight took care of all of that. And, many times, as these companies kept growing, they eventually realized the need to focus on their core business and the benefit of outsourcing their transportation needs. Of course, they had a capable partner ready to step in and take things off their hands. It was almost a sure-fire way to secure more business for National Freight, and it also provided another source of drivers. Conestoga Leasing continued under National Freight ownership until it was eventually purchased by Hertz-Penske in July 1989. Still another entity under the company’s holdings was the Marathon Division, which ran freight coast to coast. Though difficult to manage, with drivers being on the road three to four weeks at a time, it was nevertheless very profitable. As the company continued to branch out and try new things, its need for efficient systems and processes only grew, until another shift became necessary in order to adapt to the changing times and demands of the business. CUTTING EDGE I n the 1970s, technology was constantly being updated. As the decade passed by, computers became more widespread and programs were developed to allow trucking companies to automate more of their systems, including equipment control, billing, and rating. For example, freight bills had long been typed out and multiple hard copies had to be physically filed in different locations. Yet by 1975, many in the industry had adopted electronic freight billing. This change sped up transportation and boosted efficiency. Instead of drivers having to wait to depart with their loaded rigs until freight bills were prepared, they could be dispatched while clerks used computers to complete the bills. The bill was then sent to its destination electronically even as the trucks were en route. Similarly, the freight rating system was largely computerized by the late 1970s, when three-quarters of Less-Than-Truckload (LTL) freight bills were rated by machine. The former system, based on the ICC’s tables, had been complicated, technical, and time-consuming. Bernard was an early and enthusiastic adopter of such improvements, recognizing the advantages that technological progress could offer a company like National Freight. Its operations were continuing to grow, and it had become increasingly beneficial to transform many of the back office functions to automated, computer-based functions. Bill
117 National Freight Inc 1970s, Part 2 – All Cylinders Firing Vennell recalls a conversation with Mr. B early in the 1970s: “Bill,” Bernard asked him, “what do you think of our central dispatch? How can we improve it?” Bill provided a few thoughts to improve the efficiency by further tweaking and optimizing the systems already in place, but Bernard was not satisfied. “I’m thinking we need more computers to do this work….” “Mr. Brown, that sounds like a great idea, but truthfully I don’t know much about these types of computer systems.” “Well, it’s coming,” Bernard said. “I’m going to make it happen. It will make your job easier and help us be more responsive to customers. Get ready… it’s coming!” Knowing he needed professional advice, and seeing the need to hasten operational improvements, Bernard brought in Paul Fulchino, a young and bright principal at A.T. Kearney, a leading global consultant firm. He was tasked with advising National Freight on how to implement new and improved systems, procedures, and processes. As well, Paul provided sound counseling regarding information technology upgrades and the hiring of more professional managers. Paul also helped Dave McDonald, the company’s ICC-specialist attorney, to further construct a strategy to face the changes on the horizon that would deregulate the transportation industry in 1980. Early 1970s computer room
118 1970s, Part 2 – All Cylinders Firing National Freight Inc Even as National Freight optimized its systems and took advantage of new technology during the 1970s, solidifying and improving their operations already in place, Bernard set his sights westward. The East Coast had proven very profitable, but the time had come for National Freight to find a home on the range. THE LONE STAR STATE With a successful model in place that fed more business to National Freight—opening up terminals in close proximity to customers’ manufacturing facilities—it was not a difficult decision for the company to establish its first terminal in Texas. In early 1970, Owens Corning built a fiberglass insulation plant in Waxahachie, Texas. Though this was a significantly remote location in that it stood far outside of their East Coast presence, Bernard understood the growth potential of the southwest. Further, Texas itself was booming. It was the perfect place to further expand the National Freight footprint. In 1971 National Freight located its first Texas terminal in Waxahachie, Texas, alongside the OCF plant. This terminal would soon become a key revenue source for the company and one that provided years of much-needed profitability as a buffer during the difficult years coming. In January of 1972, Bernard approached Bill Vennell about heading up the Waxahachie operations. “Bill, I would like you to move to Texas and become the terminal manager. As well, we need to aggressively and quickly expand in Texas. We need to develop a strategy to work closely with the Texas State Railroad commission— the keeper of all franchise routes in Texas—and get additional operating authorities. You game?” Though Bill had only been at National Freight for a year, he knew that no one ever said “No” to Mr. B when given an opportunity like this. “You bet I am…pardner.”
119 National Freight Inc 1970s, Part 2 – All Cylinders Firing INVESTMENTS BEYOND NATIONAL FREIGHT As the business continued to grow, Bernard traveled extensively, working with customers, building his real estate holdings, searching for innovative methods and technologies, and always trying new things to advance the company. As well, he was steadily on the lookout for investment opportunities outside of core trucking operations. He ventured into other areas of asset accumulation, and although some did not prove as profitable as he hoped, many others created a healthy return. One of his more profitable investments was the creation of Citizens Bank. This was initiated because the two largest banks in Vineland passed him over in their nominations for their board of directors. As National Freight was the largest employer in Vineland, it was a curious position for them to take. So Bernard decided to start his own bank. Citizens Bank started in Vineland in 1974, and ten years later it held a book value of $300 million. That year, Bernard sold it to New Jersey National Bank at 2.5 times its book value. Years later, in 2000, the retired former president of Citizens Bank, Randy Calovi, approached Bernard about starting another bank. Together they developed Sun National Bank— an ongoing entity today—with fifty-two locations and with an asset base of $2.5 billion. Certain other investment ventures did not fare well, at least not in a financial sense. Bernard’s thoroughbred horses were more for his viewing pleasure than anything else. Likewise, Shirlee and their daughter Ann certainly enjoyed riding at Red Wood Acres, the family farm. But with little time for such activity, and with the Sport of Kings being an expensive proposition, he eventually sold his holdings in horses. And then there was his ill-fated foray into ice hockey. Bernard’s ownership of the Philadelphia Blazers did not exactly proceed as planned.
I’D NEVER EVEN SEEN A HOCKEY GAME WHEN I PURCHASED A PROFESSIONAL HOCKEY TEAM. DIDN’T GO SO WELL. I FIRMLY BELIEVE THAT IF YOU INVEST AND IT DOESN’T WORK OUT, YOU SHOULD TAKE YOUR LICKING AND GET OUT. — Bernard Brown
121 National Freight Inc Philadelphia Blazers CHAPTER 15 Philadelphia Blazers While having dinner one night with his family in 1971, Bernie diverted from his normal meal-time topics of trucking and National Freight. His unexpected statement shocked and thrilled his children. “I just bought a hockey team.” The boys, being avid Philadelphia Flyers ice hockey fans, immediately assumed their father had bought their favorite team and nearly burst out of their seats. “You bought the Flyers?!” “No, the Philadelphia Blazers, a World Hockey League team.” “Oh….” The team might not be the Flyers, but still—it was a hockey team. The boys began to chatter excitedly at the thought of the fun they would have. The fun did not last long. The Philadelphia Blazers franchise had its origins in Miami, Florida, where it was intended to be named the Miami Screaming Eagles. Because of financial problems and the lack of a suitable arena in which to play, they never played a game in Miami. Bernard, along with a partner in the venture, James Cooper, purchased the rights to the team and its players who were under contract—particularly Bernie Parent. Parent was an outstanding goaltender, later recognized as one of the greatest goaltenders of all time and inducted into the Hockey Hall of Fame. In 1972, the team moved up to Philadelphia, Pennsylvania, and became the Philadelphia Blazers. Goalie Bernie Parent signing contract with Philadelphia Blazers, 1972.
122 Philadelphia Blazers National Freight Inc Bernard and James Cooper also signed rising hockey star and sports celebrity Derek Sanderson for $2.6 million over five years, making him the highest paid professional sports player in the world at that time, a move that made headlines. This brought both publicity and controversy to the team. Going into their first season, the Blazers set their sights high— after all, they had stars like Parent, Sanderson, and another ex-Bruin player, John McKenzie, who became the team’s player-coach. Unfortunately, Sanderson suffered multiple injuries, only appearing in eight games and recording a mere six points. McKenzie and Parent also suffered injuries. To make matters worse, the team’s first home game was an unqualified disaster. On October 13, 1972, when the Zamboni finally drove onto the rink after arriving late, the ice could not support its weight. The frozen surface had not been properly made, and it began to crack. There was nothing to be done but to reschedule the games, to the great disappointment of the fans and the players, not to mention the owners. By Christmas the team was on a horrible losing streak and Cooper was already short on cash by November, only six weeks into the season. Bernard wanted out of this money-losing investment. He told Cooper, “Since you are supposed to know about hockey, you buy me out. I’m done with this!” Unfortunately, Cooper ran out of money, so rather than finding another partner, Bernard now owned the Blazers outright. He then turned to his two oldest sons and tasked them with figuring out what the heck was going on and how to turn this team around. Puck given out as souvenir at inaugural Blazers game, which was ultimately canceled due to ice problems; many of the pucks were thrown onto the ice in frustration after a belated announcement that the game would not be played.
123 National Freight Inc Philadelphia Blazers “The two of you get on a plane and fly to Chicago. Find out what is wrong with this team!” This sounded like fun to Ike and Sid, who at the time were a college freshman and a junior in high school, respectively. But Ike was worried that young Sid would not appear mature enough for this type of trip. “Sid, you need to look more grown up. We’ll be meeting with the coach and players. You need a heavy overcoat…that will do the trick.” Sid picked out a long black overcoat with a fur collar, very Walt Frazier-like! For a short time, it seemed that the streak of bad luck attached to this team would extend to the Brown boys’ trip—while landing in Chicago, their plane almost crashed. An ice storm caused the plane’s flap to become inoperable. As the plane circled and circled with the pilots feverishly working to correct this mechanical problem, the flight attendants were instructing the passengers on crash procedures and handing out blankets and pillows to help everyone brace for the crash landing. Even though it was a near death experience Ike found levity in the situation. Looking at Sid, he jokingly said, “Crap…. Jeffrey is going to get everything!” Fortunately, the pilots were up to the task, and the plane landed safely using just its brakes. Still, Ike and Sid arrived in Chicago shaken up, to say the least. The next day the boys interviewed various players, taking copious notes. Once they had met with a satisfactory number of people and felt they had better insights into the team, they returned to Philadelphia and did their best to fully explain their findings to their father. During the remainder of the season the team played well, even making it to the playoffs, but they lost to the Cleveland Crusaders, ending their season. Soon afterward, at another memorable family dinner, their father announced: “I just sold the Blazers to an investor in Vancouver. Horrible investment. I lost four million dollars!” Then he turned to his wide-eyed and disappointed sons. “You guys learning something?” Shirlee retorted firmly, “No, Bernie…are YOU learning something?” Ticket from the November 22, 1972 game between the Blazers and the Edmonton Oilers, one of the four WHA teams that ultimately joined the NHL.
124 Philadelphia Blazers National Freight Inc IKE BROWN LETTER TO BB – RE: PHILLY BLAZERS Dear Dad, You asked me some time ago what I thought about moving the hockey team and I figured it’s about time I gave an answer. There are so many factors involved in making this decision. I am pretty firm on my opinion that if we make a move this year, it should be New York. Right now, because of the losing season and immense loss of capital, we have to do what’s best for us, or in other words what’s best for the Blazers organization as a whole. As much as I would like to make a go of it in Philadelphia, it seems all factors point against it. The biggest factor is the place we play in. Where do we go in two years? I don’t really think we can assume that there isn’t a hockey market, or Philadelphia can’t support two teams. Time will tell the answer to that. What hurt us the most is that we started at the top and worked our way down instead of doing the opposite. We were built up too much, signed all the big stars… We were picked for the tops—consequently we went down. Sure, we had bad breaks (injuries, etc.), but that wasn’t expected to happen because of what we were supposed to be and do, so the people and press of Philadelphia rejected us as just another loser. Now we must look to the future, not two or three years but five to seven years. In two or three years you won’t get your money back, so the plans we make now must incorporate a substantial profit in the long-run of five to seven years. Honestly, New York scares me on one hand and fascinates me on the other. I’m scared because of the magnitude of the city itself. A small farm boy like me is not used to big city slickers. But it fascinates me in its immense possibilities and potential growth. Madison Square Garden is the whole key. The Blazers are a good team with a lot of potential. I feel we can really make a go of it. In conclusion, everything I have stated is just figurative in approach. The real answer lies in the accountant’s report or dollars and cents. You’ve got too much money in this thing and you’d just be kidding yourself if you didn’t base most of your decision on economic factors. Ike’s closing statement to his father regarding the Philadelphia Blazers
125 National Freight Inc Philadelphia Blazers
WE VALUE ALL OUR TRUCK DRIVERS AND THE MILLIONS OF MILES THEY’VE DRIVEN. THEY ARE CRITICALLY IMPORTANT TO US AND WE THANK THEM ALL FOR THEIR HARD WORK, COMMITMENT, AND LOYALTY. — Ike Brown
127 National Freight Inc It’s All About the Drivers F rom the first years of the company’s existence, Bernard knew well what it meant to be a truck driver. He had direct experience of the endless miles, the long hours, the dangers on the road, the time away from home. He witnessed first-hand how badly drivers are treated sometimes; in the early days, there were no regulations in place to protect truck drivers, no real incentives for clients to treat them humanely. Drivers frequently work in the middle of the night, and they live for weeks at a time on the road, in cramped conditions. Bernard cared about valuing the drivers and improving driver conditions because he had been there himself. Bucky Volmar, who was hired in 1971 and eventually a forty-two-year employee at National Freight, remembers: “Mr. Brown would visit with drivers at a truck stop or at the terminal. He would talk with you and give you some money to get a nice dinner. And when my wife was sick over a five-year period, Mr. Brown came to me and said, ‘Whatever you need, I’m here to help you.’ There really is no telling how many drivers Mr. Brown helped without anyone knowing about it.” Wayne Corsiglia, a forty-three-year company veteran, recalls, “Mr. Brown was always working to shorten the drive time so that drivers could spend more time with their families, while equally balancing their need to maximize their income to make a good living.” Wayne summarizes Bernard’s drivercentric business approach by saying, “He always went beyond the call of duty to help out a driver. It was just his way. He had a huge heart for his drivers because he was one of us.” CHAPTER 16 It’s All About the Drivers Although drivers display a strong commitment to their occupation, they historically have spent little time with any one specific firm. This creates high driver turnover, something that National Freight had to face and resolve from its inception on. To that end, Bernard understood that efforts aimed at improving driver recruitment and retention would not only accomplish his goal of supporting his drivers, but would also provide the most effective means for his company to reduce its costs and operate successfully. The two desired outcomes went hand in hand. Even in the 1960s, as National Freight was expanding rapidly, the administrative staff kept diligently recruiting, training, and providing the best service to the company’s drivers by resolving their concerns in timely and responsive fashion; educating new and tenured drivers on driving techniques, maintenance cycles, and requirements; and updating them on new state and federal laws. Drivers loved the fact that National Freight was always purchasing new tractors to replace the older power units. It became a key recruiting tactic. Likewise, the company had a hard policy for maintenance cycles. Both of these impressed upon drivers not only the comfort and durability of the equipment but also the paramount importance that the leadership, and all involved, placed on safety. It was not simply a bottom-line concern with protecting the company’s assets; it was about protecting lives and doing the right thing. After all…it was always about the driver.
128 It’s All About the Drivers National Freight Inc
129 National Freight Inc It’s All About the Drivers THE HUMAN SIDE: STILL VALUING AND RETAINING DRIVERS When the third generation of the Brown family began taking over the daily management of National Freight, they instituted a number of changes, but there were many long-standing facets of the company culture that remained the same. Chief among these was the company’s ongoing focus on the importance of its drivers. “Coming into the 1990s,” Sid explains, “we had to consider where we were going to place our emphasis. It was tempting to rely on the technology of trucking to help us position National Freight as one of the premier carriers of the next century. But we decided to focus on the human side of our business and invest in people, especially drivers.” Valuing drivers means both hiring high-performing individuals and then working hard to retain them by offering a superior total work environment. Going beyond competitive pay, this includes benefits, a work/life balance, professional development, and feeling valued by the executive team through a culture that respects drivers for the invaluable team members that they are. Driver turnover is notoriously high in the trucking industry, but a number of such work-environment measures have been put into place over the years at NFI to attract and retain drivers, from system-wide initiatives to personal chats with the drivers. “The success of this company lies with our driver force, regardless of the technology we use in the office or the trucks,” Ike Brown says. “Without them the freight would never move off the dock. That understanding is not a revelation, but so few shippers these days appear to realize it.” Finding and hiring qualified, committed new drivers is enormously difficult, and it will only get harder as the shortage of professional drivers continues. Because of this, NFI leadership chooses to focus much of its energy on retaining valued drivers. The approach includes a Driver Retention Presenting a safety award for accident-free miles, c. 1980s.
130 It’s All About the Drivers National Freight Inc department whose sole function is to review the driver work experience that NFI provides, ensuring that the company is providing the best work environment and positive experience that it can in areas such as equipment, pay, benefits, relationships with management, home time, and schedule. Of course, from the warehouses to marketing and everything in between, there are countless positions and roles to be filled at NFI outside of the driver workforce, and every one of these people is likewise valued, cared about, and critical to the success of the company. Yet, as explained by Joe Roeder, former president of transportation during the 2000s, “Drivers are the most important part of any transportation organization. At NFI, our drivers are the heart of the company. We realize that their daily contributions keep NFI running.” Joe observes that efforts to care for the wellbeing of NFI’s driver workforce start at the very top of the organization, with its ownership, and extend down to the management teams in the field. Everyone is involved. “We continue to focus tirelessly on providing the best work experience for our drivers,” says Joe. “As Sid Brown once told me, ‘We are a family business and our drivers are a very big part of our family, they need to know that! At NFI we take care of each other.’” A LOFTY, ONGOING GOAL I n 2010, NFI embarked on a special mission that it continues pursuing to this day: Deliver our drivers the BEST possible experience in the industry. Leadership started simply by listening to their most valued asset, their drivers, and then they took action. Based on feedback gathered from drivers, NFI leadership embarked on a driver touch-point program highlighting all the key areas of concern. They revised multiple areas of the company, with new initiatives around the best possible driver experience including processes, pay rates, better communication, and a fair and transparent work environment. Finally, NFI completed a nation-wide training program by a well-known Driver Retention consultant, titled: “Get’em Rolling, Get’em Paid, and Get’em Home—It’s all about the Driver!” The leadership at NFI knows that there is no end to “better.” NFI will continue to distinguish itself by valuing its drivers outside of the generic appreciation of service that every company in the industry seems to make. At NFI, from an entry-level position to the CEO, everyone knows it’s all about the drivers.
131 National Freight Inc It’s All About the Drivers
133 National Freight Inc Safety Begins in the Boardroom I n March of 1998, as John Carney and Jeff Brown sat in the large Las Vegas ballroom at an event hosted by the Truckload Carriers Association, they waited anxiously for the winner to be announced for the coveted grand prize: National Fleet Safety Award for North America. Bernard Brown and the teams at National Freight had for years sought this most desired recognition of something Bernard had worked his entire life to preserve—safety for his drivers and the public. In 1998, National Freight’s safety record was the best that it had ever been; the company’s professional drivers and support staff had succeeded in reducing accidents by 25 percent over the previous record year. Safety was its own reward, but to be recognized by the TCA would be icing on the cake. John Carney and his team had submitted National Freight’s forty-page application after months of mind-numbing work accumulating and properly positioning the relevant statistics. They knew their application was sound and persuasive. As the TCA president began announcing the characteristics of the yet-to-be-named winner, he started off by saying, “Safety begins in the boardroom….” Instantly excited, John leaned over to Jeff and exclaimed, “We won!” Jeff cast John a confused glance, as the winner had yet to be announced. “How do you know?” “Because we wrote that!” John was right. The TCA formally recognized what National Freight’s employees and leaders had long known—that the company had, from its earliest days on, given priority to the safety of its people and those in the communities it touches. CHAPTER 17 Safety Begins in the Boardroom SAFETY IN THE INDUSTRY Bernard and his sons understood then, as they do now, that in the trucking industry safety is more than an important core value, more than a worthwhile goal. In this industry it is, quite literally, a matter of life and death. Few other industries carry out such a critical—and easily visible— function in society, where the stakes are so high and mistakes can be so costly. Many companies talk about safety, but Bernard knew from the beginning that his company had to do more than talk about it; his company had to live it out. Accordingly, the Brown family has treated this issue with the seriousness and attention that it deserves. By remaining committed to a safety conscious culture, the company has kept its record of preventable accidents low and has preserved a spirit of continuously striving for safety excellence. At NFI, safety is not an occasional condition, it is a way of life. There are a number of methods that NFI has used to prioritize safety in the past and continue to pursue it today. One of these is the company’s aggressive schedule of maintenance, seeking the highest levels of reliability. As National Freight driver Bart Wolbrink recalls, “When I started at National Freight in 1986, I wanted to drive the long haul. What impressed me was how much I liked the long haul. Their equipment was up to par with other companies, but they were all about safety. They maintained a superior maintenance schedule, adding to their stout safety record. They are very strong on maintaining their equipment.” Communication is also key, providing all parties with the information they need to do their jobs safely and effectively.
134 Safety Begins in the Boardroom National Freight Inc Satellite communications mean drivers are never out of touch, providing continuous contact through assignment, pick-up, transit, arrival, and sign-off. High standards for driver qualifications—including character, performance, commitment to safety, and substantial time and mileage already under their belts—mean that experienced and dedicated drivers are behind the wheel of every truck. Drug tests are mandatory, there is no tolerance for alcohol when a driver will be operating one of the company’s trucks, and if drivers demonstrate poor judgment then they will soon need to find other employment. The stakes are too high for anything else. Aside from standards for licensing, age, experience, and education, ongoing training in safety and vehicle management helps to ensure that all drivers remain at the top of their game. NFI’s drivers are constantly planning ahead, and they know their equipment inside and out. Meanwhile, service centers and maintenance facilities staffed by the best in the business keep all of that equipment in peak condition, and the fleet is monitored around the clock. Even the company’s decision to reduce governed speed on its trucks reflects the commitment to safety. Research has shown that deaths and injuries from crashes rise with higher speeds, so this decision is therefore the right thing to do. It’s also a perfect example of another truth that the Brown family puts into practice—that when it comes to safety, doing the right thing has countless benefits. BUSINESS BENEFITS: AN EXAMPLE Reduced speed, as our example, leads to fewer accidents. Studies show that truck insurance claims and costs go down with lower speeds. Lower speeds also improve fuel mileage. With a reduction from 65 mph to 61 mph, NFI saves approximately 0.3 mpg; while this may not seem like much, a small bump from 6.7 to 7.0 mpg will save NFI 1,087,638 gallons in a year’s time, and depending upon the price of the fuel upwards of $4 million. At 65 miles per hour, wind resistance is the biggest factor in saving fuel. To shear the wind at 65 mph takes horsepower, and with a reduction to 61, NFI can spec a lower horsepower engine, which combines fuel savings with longer engine life. Factories charge extra for horsepower, so the initial cost is higher. High horsepower requires heavy duty clutches, transmissions, drivelines, and rear axles, all of which cost more. A lower horsepower engine costs less, lives longer, and is less prone to breakdowns. NFI is proud to be the lightest carrier in the business. Its fleet can carry more of the customer’s product, which in turn makes NFI more efficient. This is a clear advantage when bidding on business. Slower speeds requiring less horsepower allow NFI to use physically smaller engines, further reducing the truck’s weight. All of this adds up to a better package to serve NFI’s customers and the world.
135 National Freight Inc Safety Begins in the Boardroom A CULTURE OF SAFETY NFI’s commitment to lower speeds—which leads to both greater safety and lesser costs—is one of many examples of the ways that NFI does the right thing and then reaps the rewards. Together, these and other initiatives combine to create a safe, healthy company culture. This culture ensures all employees that both their well-being and that of the clients, customers, and all citizens of the communities that NFI touches is greatly valued. As another example, NFI began implementing a system of electronic logs as a safety measure for its trucks, drivers, and the public in 2010, even before a government mandate began requiring it. NFI was also chosen as a carrier to participate in the Federal Motor Carrier Safety Administration’s ‘Compliance Safety Accountability’ program. For this safety measurement system, NFI was selected to participate in order to determine the safety fitness of the daily operation of commercial motor vehicles. The purpose of this system is to prevent unsafe carriers from operating on public roadways, while good carriers can measure themselves and take corrective action when one of seven basics is out of alignment. The seven basics of safety as measured by the program are: • Unsafe driving • Hours of service • Driver fitness • Controlled substance and alcohol testing • Vehicle maintenance • Hazardous material • Crashes NFI was honored to be selected and used its participation in the program to fine-tune its already exceptional safety program, which includes accident review boards for CMV drivers and Material Handler Equipment (MHE) operators (as of 1997); a safety point system to award an annual driver safety bonus (2003); a safety point system to measure driver qualifications to operate a CMV (2002); an MHE operator policy to operate equipment safely (2003); a Safety Matrix that includes monthly training on fire safety, personal protection equipment, MHE certification, emergency disaster planning, hazardous communication, and other site specific training; and a Mobile Training Unit (MTU) that travels across the country providing simulation and computer-based safety training for managers and drivers. NFI has invested in the necessary technology to keep on the cutting edge of safe, efficient operation. Steps taken to equip technology-based safety include: • 2010: Critical Event Reporting of hard braking and stability control in real time to fleet managers • 2013: Drive Cam pilot of video event recorders • 2014-2015: Installation of Drive Cam event recorders • 2015: Installation of power units with Collision Mitigation Systems (CMS) and Lane Departure Warning systems (LDW) • 2016: Integration of Drive Cam and power units with CMS and LDW for coaching and improvement As part of its ongoing commitment to develop and support its drivers, NFI has also focused on behavior-based safety by implementing: • A Behavior Based Safety pilot program in its distribution and transportation division • An athletic trainer at distribution facilities to prevent employee injuries and improve work duties • A partnership with Human Conditioning Systems to monitor employee behavior with a safety vests tracking system • A goal to identify workflow pinch points and danger zones to prevent injuries and improve efficiency
136 Safety Begins in the Boardroom National Freight Inc initiatives—helps the company to accomplish that goal. Because of the extraordinary degree of difficulty in achieving the Triple Zero Goal, NFI has also created the SAFENET Award program. Along with incentive awards, the exceptional facilities that achieve the Triple Zero Goal are presented with the President’s Award for Safety Excellence as recognition for their superior efforts. F rom reducing injuries and incidents, to the higher quality delivered by safe, optimized equipment and systems; from greater loyalty in employees when they know their safety is valued, to the higher productivity that results from healthy, happy work environments; and from the pride that results from industry-recognized safety performance, to the ways this pride is lived out in every NFI employee that bleeds blue… safety is not only the right thing to pursue, but it also makes good business sense… and it consistently drives NFI to greater success. SAFENET NFI also initiated a SAFENET program in 2003 with the worthy stated purpose to “provide the safest possible work environment for our employees.” The SAFENET goal is to reduce workplace incidents and injuries through compliance, education, communication, inspection, and training. Safety representatives are encouraged to think outside the box, remain in close contact with those on the front lines, and are required to attend annual safety training seminars. All employees’ safety awareness is raised, allowing NFI to meet and exceed industry standards. A safety network was established within the existing infrastructure of NFI’s divisions, and SAFENET members are responsible for training, inspecting, and informing NFI personnel within their respective local networks. This team is linked together by the NFI SAFENET specialist, who conducts inspections throughout the NFI network and works in conjunction with the NFI SAFENET representatives, NFI Risk Management Department, governmental agencies, and insurance carrier representatives to ensure the highest levels of safety across the board. Reporting, inspection, and the sharing of information are all major aspects of SAFENET, but perhaps the most significant is the cultural impact—this “in your face” style of safety awareness forces all involved to approach every circumstance with safety as a top priority. The education provided by SAFENET representatives provides every NFI employee with a first-rate understanding of how to undertake projects in the safest possible manner. The ultimate objective of SAFENET is “The Triple Zero Goal”: zero incidents, zero injuries, and zero motor vehicle accidents. This is a very aggressive goal, but it reflects the importance of the program. Providing a safe, injury free, and secure workplace for all NFI employees will always be the company’s first priority, and SAFENET—along with NFI’s many other safety
137 National Freight Inc Safety Begins in the Boardroom
139 National Freight Inc Deregulation: The Motor Carrier Act of 1980 At the end of the 1970s, National Freight had achieved a revenue run-rate of $65 million. The company now had 24 terminals, over 700 trucks, 2,100 trailers, and a staff of over 175 non-driver employees. Business was running smoothly, but change was on the horizon. The heavily-regulated trucking industry had been under scrutiny for a number of years. The deregulation movement grew throughout the 1970s, even in the face of harsh opposition from the Teamsters and the American Trucking Association. The bankruptcy of Penn Central in 1970, the nation’s largest railroad, served to discredit ICC regulatory policies and only fueled the fire of deregulation activism for multiple industries, including trucking. The Motor Carrier Act of 1980 finally brought about deregulation, one of the most important events in the history of trucking. Most restrictions were removed concerning the routes that motor carriers could drive, which commodities could be carried across them, and the geographical regions the carriers could serve. It was much easier for start-up companies CHAPTER 18 Deregulation: The Motor Carrier Act of 1980 to enter the industry, and truckers were now allowed to set prices as they wished within certain boundaries. Not only were there hundreds of new companies flooding the market with competition, but pricing wars caused even the most well-established companies to struggle for survival. To make matters worse, in the early 1980s the country was in the midst of back-to-back recessions. Ten years after deregulation, one third of the one hundred largest trucking companies had gone out of business. As for National Freight, the change to a deregulated environment provided many opportunities to adapt and grow. That was the good news. With operating authorities readily available, the map was now wide open and National Freight could expand unhindered. But so could their competitors, and now there were more than ever to contend with, to say nothing of the increased leverage that shippers wielded, the shrinking rates, and the correspondingly dropping profits. All across the industry, margins were bleeding red. National Freight would have to find a way to stanch its own bleeding margins, or it would soon face more than fierce competition and dropping rates—it would face bankruptcy.
1986 FOOTPRINT
141 National Freight Inc 1980s – Hyper-Expansion During Hyper-Competition CHAPTER 19 1980s: Hyper-Expansion During Hyper-Competition Deregulation set off an unprecedented number of new trucking company entrants in the market and unmatched expansion for existing carriers. Such hyper-competition enabled customers to negotiate lower rates and expanded service offerings. It was a boost to customers but had a negative effect on carriers. This unrelenting competitiveness lasted throughout the 1980s and 1990s, when only the most efficient and financially strong carriers survived. Many did not… and “many” almost included National Freight. For National Freight, the 1980s started off beautifully. It had the trucks designed to transport a greater capacity of light-weight, high volume goods—plastic bottles and containers, fiberglass insulation, corrugated packaging—and seemed to be serving every customer in their territory and holding a dominant share. The company expanded to Texas, and then to California, creating a coast-to-coast footprint. Existing warehouses were expanded and new distribution facilities constructed in order to offer more storage of customer inventory. When at capacity, another adjacent warehouse would be constructed. 1986 FOOTPRINT The business was designed to feed itself, and with the National Freight Eagle being recognized throughout the country, it was go-go-go. Expand. Spend. Construct. Many new customers were added, while the company likewise hired more employees and drivers and purchased more trucks and trailers. Computers were updated, and new software was installed. It was full speed ahead. This success made it even more startling when all of it nearly collapsed. Although everything seemed to be progressing perfectly, the harsh truth was that troubling times were just down the road. Before these appeared around the bend, though, it was a boom time for National Freight, and it seemed that nothing could slow the company down. I n the wake of deregulation, with few regulated boundaries to impede their desired growth, National Freight set off on an extraordinary expansion mode. From 1976 to 1985, the company revenue stream doubled to $115 million and the number of drivers nearly increased to 1,200 from 700. New customer engagements were being secured across the board. Now with a customer-focused sales team in place, and with a well-known brand, nationally recognized companies began partnering with National Freight—Kimberly Clark, Procter & Gamble, Nabisco, Black & Decker, Scott Paper, Boeing, DuPont, General Foods, Coors, Quaker Oats, Kellogg’s, Heinz, and General Electric, to name just a few! These customers, and many others, flocked to National Freight because of its unique trailer innovations that expanded YEAR REVENUE DRIVERS 1976 $57.5M 700 1985 $115M 1,200
142 1980s – Hyper-Expansion During Hyper-Competition National Freight Inc Updated computers, 1982
143 National Freight Inc 1980s – Hyper-Expansion During Hyper-Competition the volume capacity to forty-eight feet, then fifty-three feet, and then fifty-seven feet. This was just what the customers wanted: higher volumes shipped, fewer trucks tied up at loading docks, and an increased turn-over of goods, all unique developments that brought in many new customers, especially in light weight goods. As Pat Mulligan, Operations Manager for Black & Decker in the 1990s, put it, “NFI is responsive to our special requests; they meet our schedules; they have the necessary equipment available; and their rate structures are competitive.” The Special Services divisions—the Marathon, Refrigerated, and Flatbed divisions that served long-haul routes, frozen products, and heavy bulk products, respectively—were especially profitable. Texas continued to expand with new terminals and a growing list of customers by securing the required operating authorities at an aggressive and unrelenting pace. Still protected by the state’s railroad commission laws requiring exclusive rights, these regulated operating authorities came to be a key source of National Freight’s profitability during the 1980s. Computer automation and de-centralized operations increased operational efficiency. The company was reorganized into six operating divisions, each with its own dispatch operation, which offered a much broader scope, allowed more efficiency for drivers, cut down on deadheading, balanced traffic, and reduced time waiting for a load. All this expansion and reorganization sometimes meant long hours for employees, and Bernard Brown maintained his high expectations for everyone involved. Lee Robledo, VP of Safety and Loss Control, recalls: “In Dispatch you worked six days a week, ten hours a day. Mr. B. would always want to know what was going on. He would say, ‘Lee, don’t be afraid to make a decision. Even if you make a bad decision, it’s OK. Just don’t make it twice.’ But he also told me, ‘If I have to make the decision for you, I don’t need you.’” Even as high standards were enforced, the company continued its tradition of fairness to employees. In fact, National Freight doubled down on its commitment with a new directive in 1987: Everyone will be treated properly regardless of age, race, or religion. Everyone has the right to have the best conditions to work. Nowadays this may not Fleetline acquisition Central Dispatch, 1980
144 1980s – Hyper-Expansion During Hyper-Competition National Freight Inc by acquired Fleetline Express in 1985, adding one hundred trucks, a key customer (Boeing), and two terminals in the San Francisco and Los Angeles areas. It was a great time for National Freight. Yet despite all of these factors, changes to the industry began to take their toll throughout this period, and although loyal and dedicated employees continued to “bleed blue,” the company’s financial statements started bleeding red. Eventually, the company’s leadership would face one of their greatest challenges yet when acknowledging a troubling reality—that the company sat on the precipice of financial ruin. seem revolutionary, but at the time it was an eye-opening statement, as few trucking companies stood by such a commitment to safeguard excellent working conditions and to judge each person solely by the merit of his or her work. As Bart Wolbrink, a 27-year tenured driver, put it, “A driver would think to himself, ‘This is a company I want to stay with.’ It showed they cared. Even today their values are listed on every trailer. It’s not just an advertisement, it’s their core, from the leadership’s foundation of standing for excellence and commitment to their employees.” Two other significant steps occurred to help meet the ever-growing need for drivers. The first was the opening of National Freight’s four-week Training and Orientation School in Vineland for new drivers, and the second was a truck lease-purchase program to encourage even more drivers to sign up and remain employed at the company. With this program, once the lease-purchase was complete, the driver would own the truck; few companies offered this. As well, to complete National Freight’s nationwide footprint, the company expanded its presence in California Stockton, California terminal If there is one thing that has kept our company going it is the employees’ dedication to the Brown family.
145 National Freight Inc 1980s – Hyper-Expansion During Hyper-Competition Brown Family Message Dear Friends: This year has been a year of progress, excitement and transition for National Freight and our drivers. In the last three years, we have almost doubled revenues and have grown from a total of approximately 1000 drivers in all categories to 1,600 drivers. The success of the business in the future depends upon continuing the strong working relationships between our customers, our drivers and our administrative personnel. As 1986 comes to a close, we see that the average productivity of our truck drivers is way up, and so is use of equipment. Both of these increases has put more dollars in drivers’ pockets all year. As 1987 rolls in, we look forward to another year of growth and safe driving. And we anticipate opening new territories with even more opportunities for National drivers. Our drivers of the foundation of the company. We wish each of you the best now and in the year ahead. Sincerely, The Brown Family
MY CHILDREN HAVE AN ENORMOUS OPPORTUNITY AND THE POTENTIAL TO CONTINUE MOVING FORWARD TO EXPAND OUR ENTERPRISE FURTHER. —— Bernard Brown
147 National Freight Inc The Third Generation Steps In CHAPTER 20 The Third Generation Steps In Working for their father would never be simple for the children of Bernard Brown. After all, by the 1980s Mr. Brown had become a legendary figure in the transportation industry, and he had very high standards. Working under his direction, and eventually stepping into his shoes, would be a herculean task. Yet as time has proved, the children exceeded everyone’s expectations. Bernard always dreamed that one day his children would assume the reins of the family enterprise. He took every opportunity to discuss the company’s daily activity during their family dinners at home, hoping this would inspire them to join him one day. During family vacations at the beach, he would take his children on long walks down the shoreline, asking them, “What do you want to do with your life?” Bernard wanted them to consider it carefully, but he was also hoping they responded with the answer he had in mind. He also had mentors to help raise his children—trusted employees and family friends such as Dave Skilowitz and Floyd Pooley. These mentors gently promoted the company even as they helped to shepherd each child through the ups and downs of life. And each learned the business from the ground up. When old enough, usually about the age of twelve, they held summer jobs in Vineland. They also worked for the company on Saturdays during the school year. They gradually learned how the company was run, but in the meantime they got their hands dirty; they performed a variety of tasks at the front lines of the business. In the maintenance shop, they changed oil and worked with skilled repair personnel to rebuild trailers
148 The Third Generation Steps In National Freight Inc parts that would have been impossible to communicate, even in a thousand dinner conversations. Bernard’s plan to inspire them was working. As Ike Brown reflects, “Ever since we were little kids, trucks were all we knew. We were born to be truckers.” Through these experiences, National Freight ran deep in the Brown children’s veins, until eventually this statement—as employees say today, referring to the color of the company logo—was 100 percent true of each of them: They bleed blue. or replace tires. In the office, they filed paperwork, learned about computers, and helped interview prospective drivers. In central dispatch, they filled in when employees took summer vacations. In the warehouse, they stacked and replenished customers’ inventory. They rode along with drivers to experience first hand a driver’s rigorous job, which embedded in them a respect for truckers’ skills and also ingrained the paramount importance of safety. They were learning all aspects of the business, and they were developing an appreciation for its many people and I had to figure it out on my own −− why can’t others figure it out? −− Bernard Brown
149 National Freight Inc The Third Generation Steps In ANNE E. KOONS (NÉE BROWN) Bernard and Shirlee’s oldest child, Anne, was a trailblazer in more ways than one. She was the first member of the third generation to enter the family business, as well as a female working in a male dominated industry that presented challenges to women trying to get their foot in the door. She had a level of experience, though, that few women possessed in the trucking world, having worked in the company since she was twelve years old. And it wasn’t just office work or administrative duties. No, Anne also dove into the fray of dispatch as a youngster. “I worked in the office and operations during junior high and high school,” Anne recalls. “I gained my stripes working in dispatch, working with customers, and working with trucks to schedule deliveries.” Upon graduating from college, and after a brief banking career, Anne started working full time for the family enterprise. She ran the Lawnside terminal for a number of years, and then she jumped into sales, which proved to be a wonderful fit for her talents and passions. “I liked sales a lot,” Anne says, “making customer calls and traveling all over the country.” As one example of her skill at sales, she managed to win one of the most prized customers of the day, Nabisco, in Philadelphia. Then she continued to grow the Nabisco business, visiting all their plants along the East Coast and over to Chicago. She then leveraged this success to win other customers in the cookie industry, such as Keebler. No matter where she traveled in the country, she told her prospects, “I work for a small trucking company in Vineland.” They all replied, “Well, you must work for Bernie Brown.” Even at that time, he was a legend in the industry. It never really bothered Anne that everyone knew her father. But on one memorable occasion she had to visit her customer, International Paper, for their very large trucking confab. They invited all of their major carriers, and she wanted her father and mother to attend this big event in her stead due to a conflict with her own schedule. She also figured it would be good for her parents to get connected with this customer. When Bernard met the VP of Transportation, he said to Bernard, “Oh, you’re Anne’s dad.” Bernard was taken aback and couldn’t help looking shocked. Shirlee piped in, “Bernie, you should be proud of her. She lives with ‘So, you’re Bernie’s daughter’ every day! She’s doing a great job!” “My father gave me two pieces of advice,” Anne says. “First, never get involved in any illegal deals. Second, always make sure you can sleep well at night, knowing you did your best and handled yourself with the utmost professionalism.” Anne went on to become a member of the Board of Directors of Sun Bank Corp. and a board member of the Cooper Hospital Foundation. Today, she has a highly successful career in real estate as a luxury homes specialist and office leader for Berkshire Hathaway HomeServices. Anne still lives and works in southern New Jersey, not far from where she grew up.
150 The Third Generation Steps In National Freight Inc IKE BROWN After high school, Ike Brown earned his BBA from Boston University and went on to the University of Wisconsin in pursuit of an MBA, but his studies were cut short. While Ike was on track for his MBA, his father kept calling, asking Ike to visit customers with him. Ike often consented, and they traveled to Chicago, New York, and other locations, allowing little time for his school work. In 1973, during his college years in Boston, Ike worked the entire summer completing the acquisition of Northeastern Transport and integrating the teams in Charlotte, North Carolina. “We bought that trucking company to obtain additional routes,” Ike recalls. “I spent the whole summer at the Red Roof Inn working on closing the transaction.” In 1977, while a student at the University of Wisconsin, Ike was helping his father with business in Chicago, and it turned out to have an unexpected benefit for Ike. “I was making all these calls in Chicago, and a family friend was getting her degree at Northwestern University and had a roommate, Candy, who became my wife.” Knowing his father would continue to call on him, and having a clear understanding of the priorities after many years of learning the ins and outs of the company, Ike decided to forego his scholarly pursuits and start his career at National Freight in 1978. For his first job, he took over sales leadership of the New England territory. Then in 1979 he headed west to Texas, where he oversaw National Freight’s operations in the southwest. From his base in Dallas, Ike made his mark. For National Freight, Texas evolved from a location featuring only a few trucks to the single most profitable state for the company by the end of the 1980s. The company became the largest contract carrier in Texas, and a major truckload carrier in the southwest, under Ike’s guidance. A chip off the old block. Today, Ike is Vice Chairman/President of NFI. He continues to expand NFI’s footprint in numerous service offerings. Ike also serves on the Board of Directors for the Truckload Carriers Association, the Scholarship Committee, and has also held a Board of Director’s seat with Sun Bancorp. He is a Trustee at National Jewish Hospital in Denver. Ike, and his wife, Candy, are active supporters and founding donors of the new Dallas Holocaust and Human Rights Museum. He has formerly served on the Board of Directors for the Social Venture Partners Dallas, Dallas Jewish Community Center, Jewish Federation of Greater Dallas, Greenhill Schools of Dallas, and the Dallas Lighthouse for the Blind. Ike was also a member of 2011 Super Bowl Host Committee-Concert Kick-off Series in the Dallas-Fort Worth area. In 2009, Ike and Candy were named honorees for their help in building the Kellman Brown Academy, a Jewish day school in Voorhees, N.J. They were also named honorees for the Dallas area by National Jewish Health in Denver, Colo. in 2010.