A Word From the Publisher n this 2007 edition of the Trans- The shift to private owner- port Topics Top 100 For-Hire ship is also reflected in the pur- Carriers, the focus has shifted chase of Swift Transportation from Main Street to Wall Street. by its former chairman Jerry Private equity investment firms Moyes and the proposed buy- have become the driving force for out of U.S. Xpress Enterprises I by top executives of that com- change, based on our annual review of financial and operating statistics pany. for the nation’s top for-hire trucking No one knows how long this companies. trend will last, or even how suc- Of course, well-heeled investors cessful these new investment and Wall Street money managers strategies will be over the long have been involved in trucking term. But what is clear from a before, but today’s breed of money reading of the Transport Topics men appears to be taking a different Top 100 For-Hire Carriers list approach than did the corporate is a sense that the game has raiders in the 1980s who used high- Howard S. Abramson changed. interest debt to target vulnerable With private equity funds companies. And they are different from the Inter- providing a source of new capital, many carriers net-inspired corporate roll-ups that we saw in the are making investments in technology and 1990s when small companies were patched expanding services in order to increase their together to create new, bigger businesses that share of the freight market. were assumed to have magical superhero market They say you can’t tell the players without a power. scorecard. We like to think of the TT Top 100 list The current crop of private equity dealmakers as one of best ways to keep score. — there were 16 buyouts of for-hire carriers in the first five months of 2007 — appear to be taking a different, more sustainable approach. And as Daniel P. Bearth’s reporting for this issue of the TT 100 For-Hire Carriers shows, it has the potential to alter the competitive landscape for many trucking companies. Who could have imagined, for instance, that two of the nation’s largest auto haulers would come to be owned by an investment firm with ties to the Teamsters union? That’s what happened when Allied Holdings and Performance Transportation Services fell into bankruptcy and were “rescued” Acknowledgements & Sources by Yucaipa Cos., a Los Angeles-based investment fund headed by Ron Burkle, a man who made his The 2007 TRANSPORT TOPICS 100 list is a fortune by investing in and selling several West special project of TT Publishing Group that Coast grocery chains. features financial and operating information New York-based Fenway Partners acquired on the largest for-hire freight carriers in the more than two dozen companies over six years to create Greatwide Logistics Services, now a billion- United States and Canada. Data was com- dollar company with significant market share in piled from annual reports of publicly owned dedicated contract carriage, truckload and freight companies and directly from the manage- brokerage services. Fenway recently sold a majori- ment of privately owned companies. In a few ty stake in Greatwide to two other investment cases, revenue estimates were used to firms, Hicks Holdings and Investcorp, and now is focusing on growing three other platform business- determine rankings. es — intermodal specialist RoadLink USA, Pan- ther Expedited Services and freight brokerage firm Senior Features Writer Daniel P. Bearth is Gemini Traffic. the project coordinator, with assistance from Other prominent for-hire carriers that have research intern Marjorie Pouyes. The design come under the spell of private equity include is by Patrick Donlon, assistant director of art Jevic Transportation, Transport America, Ceva and production. Logistics (formerly TNT Logistics) and, most recently, EGL Inc. This Transport Topics 100 PDF is sponsored by Polk Commercial Vehicle Solutions and Innovative Computer Corporation. Page 3 27. Ceva Logistics 64. P.A.M. Transportation Services Inc. 28. Allied Systems Holdings 65. RoadLink USA 29. Saia Inc. 66. Forward Air Corp. 30. CRST International 67. Cardinal Logistics Management 31. Southeastern Freight Lines 68. Contrans Income Fund 32. R+L Carriers 69. Graebel Cos. 33. NFI Industries 70. Central Freight Lines 34. Prime Inc. 71. Jevic Transportation 35. Quality Distribution Inc. 72. Central Refrigerated Service 36. C.R. England Inc. 73. Performance Transportation Services 37. Ruan Transportation Management Systems 74. Velocity Express 1. UPS Inc. 38. Covenant Transportation Group 75. Dynamex Inc. 2. FedEx Corp. 39. Lynden Inc. 76. Ace Transportation 3. DHL Americas 40. Knight Transportation 77. Mullen Group Income Fund 4. YRC Worldwide 41. Universal Truckload Services Inc. 78. Suddath Cos. 5. Ryder System 42. Anderson Trucking Service 79. Pitt Ohio Express 6. Con-way Inc. 43. Interstate Distributor Co. 80. Mesilla Valley Transportation 7. Penske Truck Leasing Co. 44. JHT Holdings 81. Bennett International Group 8. Schneider National Inc. 45. Heartland Express 82. Transport America 9. J.B. Hunt Transport Services 46. Kenan Advantage Group 83. KLLM Transport Services 10. EGL Inc. 47. Roadrunner Dawes Inc. 84. Jack Cooper Transit Co. 11. Swift Transportation 48. Trimac Group 85. Roehl Transport 12. Landstar System 49. AAA Cooper Transportation 86. Maverick USA 13. UniGroup Inc. 50. Western Express 87. Epes Carriers 14. Werner Enterprises 51. Marten Transport 88. Canada Cartage Diversified Income Fund 15. Pacer International 52. Dart Transit Co. 89. Gordon Trucking Inc. 16. Arkansas Best Corp. 53. Vitran Corp. 90. Cassens Transport 17. Estes Express Lines 54. Comcar Industries 91. Arrow Trucking Co. 18. U.S. Xpress Enterprises 55. Frozen Food Express Industries 92. TransAm Trucking 19. TransForce Income Fund 56. Celadon Group 93. Paschall Truck Lines 20. Old Dominion Freight Line 57. USA Truck 94. Superior Bulk Logistics 21. Greatwide Logistics Services 58. Stevens Transport 95. The Waggoners Trucking 22. Sirva Inc. 59. Central Transport International 96. A. Duie Pyle Cos. 23. Crete Carrier Corp. 60. Shevell Group 97. Falcon Transport 24. Purolator Courier 61. Gainey Corp. 98. Panther Expedited Services 25. Atlas World Group 62. Contract Freighters Inc. 99. United Road Services 26. Averitt Express 63. Mercer Transportation 100. Groendyke Transport ‘hot’ industries. We have companies within all industries that are doing well.” Private Equity Reshapes Trucking John Anderson, a partner with Fenway Part- ners, a private equity firm that has made more than two dozen acquisitions over the past six As Investors Bolster Top Carriers years, said the goal is to “leave good companies in our wake.” CD&L Inc., have been taken private or merged “We are more certain of getting a return with a By Daniel P. Bearth with other publicly owned companies. better business than we would through some Senior Features Writer Two of the nation’s largest autohaulers, Allied financial engineering,” he said. Holdings and Performance Transportation Ser- In December, Fenway sold controlling interest rising tide of buyouts by private equity vices, were taken over by a private investment in its biggest holding, Greatwide Logistics Ser- firms is changing the competitive land- company — Yucaipa Cos. — with close ties to vices, to two other private equity firms, Invest- scape of trucking. the Teamsters union, giving labor leaders corp and Hicks Holdings. A Over the past six years, annual revenue for the Not only is the process accelerating a transition unprecedented control over management and from small family-run companies to large, pro- wiping out the value of stockholders’ investment Greatwide organization, which now includes fessionally managed corporations, it is changing in both companies. trucking, warehousing and freight brokerage the way many for-hire carriers are organized and The trucking industry has seen surges in out- services, grew from $175 million to $1.2 billion, managed. side investment before. However, private equity Anderson said. Fenway still owns Panther Expe- “Private equity is raising the bar,” said Ben- firms appear to be targeting well-run companies dited Services, intermodal group RoadLink USA jamin Gordon of BG Strategic Advisors, a busi- — unlike leveraged buyouts in the 1980s, driven and its latest “platform” company Gemini Traf- ness consulting firm in Boston that specializes in by low stock prices and high-interest debt, or cor- fic, a freight brokerage firm. the transportation and logistics sectors. “Compa- porate roll-ups in the 1990s, most of which failed. Fenway’s approach, which includes giving own- nies who compete against private equity-backed They are focusing on making them bigger and ers of acquired companies a stake in the fund, companies are going to find it tougher better, rather than buying what are perceived as appeals to many potential sellers, said Marc to succeed because capital is flowing to the best undervalued assets or attempting a major Kramer, a Fenway partner who works with companies and giving them the resources to restructuring in order to turn a quick profit. Anderson to pursue deals in the transportation accelerate their growth.” Doug Christensen, a former executive with sector. In just the first five months of 2007, private USF Corp. who recently joined Chapman & “We see good momentum with our franchise,” equity firms have acquired 16 for-hire carriers, Associates, a merger and acquisition advisory Kramer said. He noted that the company has more than all of last year. In addition, several firm, said investors today are more discriminat- looked at more than 300 buyout proposals publicly owned trucking companies, including ing about the companies they buy. “We [have] already this year, compared with 220 in all of last truckload carriers Swift Transportation and gone through the conglomeration cycle and the year and 150 in 2005. Smithway Motor Xpress and parcel carrier hot industry cycle,” he said.