Duane Acklie
'Like a kid in a candy store' is how this senior statesman of truckload felt about deregulated trucking.
The budding fleet owner came out of retirement as an attorney to represent the "yak fat hauler" in a key push for deregulation.
Duane Acklie, chairman of Crete Carrier Corp., didn't start his career as a trucker. In fact, he was the attorney for the previous owner of Crete, a man who dropped by the Acklie home on June 21 of 1971. He wanted out. Did Acklie want to buy?
"I paced the floor all night,"Acklie recalled. "We closed the deal in three days."
Acklie was mostly investing in operating authority. At the time, Crete had about 600 owner-operators with 100 leased trailers. "I remember the first meeting of the Contract Carrier Conference (predecessor of the Truckload Carrier Assn. of ATA.) "None of us had more than 60 tractors. We all ran with owner-operators with leased trailers - and a hope and a prayer," Acklie chuckled.
"I came into the business, borrowed heavily with virtually no assets - just operating authority."
Acklie began building his business prior to deregulation and soon purchased Shaffer Truck Lines. But the Interstate Commerce Commission said he was expanding too fast and suspended growth of the company for three years.
In 1979, he purchased Sunflower, a reefer fleet that was a subsidiary of a meat packer. It made sense, he said, to expand his contract carrier dry freight business into the reefer business. Acklie turned to Tennessee-based Hilt Truck Service for backhaul capability to balance out the traffic of Crete and Shaffer.
Thus began a partnership that made history when the push to deregulate trucking began.
Leroy Hilt, owner of Hilt Truck Service, was approached by the meat packing houses to haul lard in bulk. Hilt had authority to haul meat, but had been denied authority to haul lard on several occasions. He tried again on Acklie's authority.
They applied to the ICC to haul lard and - as was all too typical of the times - the railroads protested.
"Every time we applied for a rate that competed with the rails, they would fight it with the ICC. The rate commission rubber-stamped all the trucking requests 'Denied,' " Acklie said.
"Hilt's son, Tom, was handling the rates," Acklie explained. "He said we should do something about it. He said 'Let's throw 'em a curve and show the public that the railroads have the ICC by the nose.' "
This time, instead of applying for authority to haul lard, they applied for authority to haul yak fat.
Yep, yak fat. As you can well imagine, there wasn't a huge demand in the U.S. for yak fat haulers. Unless you talked to the railroads, that is.
When the yak fat petition was filed, the rails immediately protested. They alleged they were hauling millions of tons of yak fat and that allowing trucking to cut into their action would cause irreparable harm to the railroads' business. They claimed the trucker's rate was ridiculous and that yak fat couldn't be hauled for that.
More ridiculous: The Interstate Commerce Commission ruled in favor of the rails and denied the trucker's petition.
Hilt immediately took his case to the media.
The first story of the "yak fat hauler" appeared in the Journal of Commerce. The reporter called Hilt and asked, "Are there any yaks in Nebraska?"
"One or two in the zoo," Hilt replied.
Hilt posed beside a yak from one of those Nebraska zoos in a photo that accompanied the piece. The national media picked up on the story and ran with it. Stories appeared in such auspicious journals as U.S. News and World Report and Business Week, as well as many major national newspapers.
In the end, Acklie says, the case put Hilt on the map as the "yak fat hauler," and eventually was a major catalyst for deregulating trucking.
Government officials didn't take the flap over yak fat lightly. Hilt had embarrassed the ICC.
They filed a fitness case against Hilt, and Acklie had to take off his trucker hat and come out of retirement to represent Hilt against the government.
Acklie is as good an attorney as he is a trucker. An administrative law judge eventually dismissed all charges against Hilt's operations.
That wasn't the end of it, though. The "yak fat case" was one of the major bullets that pro-deregulation factions aimed at detractors to change forever how freight moved in America.
"It's amazing how something small like that has helped change history," Acklie said.
Also amazing, according to Acklie, is the evolution of trucking after 1980. Most truckers at the time were opposed to deregulation. Despite the difficulties with the ICC and the railroads, they preferred the status quo.
The real push, he said, came from the shippers.
"Prior to deregulation, the truckload business was quite small. Less-than-truckload was huge business because of operating authority."
But what was "huge" then pales in comparison to some of the larger truckload carriers today. Prior to deregulation, LTL fleets with 1,000 tractors were the biggest operators in the business. Today, Crete and its companies run more than 6,000 power units. Swift has more than 18,000 drivers, mostly operating company equipment.
"Authority was hard to get. You could get one state, one area, but not broad authority. Most truckload fleets were small carriers domiciled in small communities," he said. Most operated - as Crete did - utilizing owner-operators pulling company trailers.
There was a major shift by truckload carriers to operating mostly company-owned equipment after 1980. Most of the pressure came from shippers who believed they would get better service from companies owning their own equipment.
There were some primary reasons why truckload fleets took hold as the predominant players after deregulation, according to Acklie.
• "They ran awfully lean operations with low overhead. The larger truckload carriers have continued to run efficient operations."
• "Deregulation gave us the ability to run anywhere in the continental U.S., so we were better able to balance traffic lanes."
• Successful truckload carriers were astute at finding their own niche. "Whether they focused on a 300- to 400-mile area built around a particular shipper - or one that ran nationwide and developed into larger carriers with some regional operations - they evolved and expanded based on their particular expertise."
As examples, Acklie cited J.B. Hunt's focus on intermodal transportation, Werner's on dedicated carriage, Schneider's on logistics and Swift's focus on flatbed, car hauling and dry van freight.
"The business has always been very competitive. That's one reason truckload has been able to grow. We were the 'have nots' prior to deregulation. How we became the 'haves' is that we poured all our profits back into our companies for growth.
"Truckload is still the entrepreneur's business. J.B. Hunt, Glenn Brown, Jerry Moyes, (profiles of all these carriers follow) all recognized the wonderful opportunities and the need, and they all worked to fulfill that need.
"I came into the industry in 1971 - nine years before deregulation. I might have a very good shipper prospect, but couldn't haul the freight. I had to fight for operating authority. After deregulation, I was like a kid in a candy store. From 1980 to 1990, we all enjoyed that. It was a great opportunity."
And grow he did. In 1980, Hilt Truck Lines merged into Crete. Then, Acklie merged Sunflower into Shaffer. In 1999, Acklie bought Hunt Transportation - not to be confused with J.B. Hunt. The Hunt fleet had been in business even longer than J.B. Hunt and was third generation when Acklie acquired it. That purchase put the Acklie companies into the flatbed and heavy haul business.
Acklie businesses today include Crete Carriers, the dry van business based in Lincoln, Neb.; Shaffer, the reefer business based in New Kingston, Pa.; and Hunt, the heavy haul, flatbed operation based in Omaha. They operate more than 6.000 company-owned tractors and 11,000 trailers.
Operations have been streamlined and are all based out of company headquarters in Lincoln, including insurance and claims, accounting and data processing.
Always the entrepreneur at heart, Acklie's companies have evolved with the the most recent changes in trucking. Last year, driver hours of service rules changed for the first time since 1932. The major impact of those changes ended the practice of shippers using trucks as freight storage by forcing drivers to wait hours and sometimes days to load and unload freight at the dock. The shippers were forced to recognize that driver time was worth money.
Crete was one of the first carriers to build a detention team into its operations. Tonn Ostegard, Acklie's<\!s>son-in-law and president and CEO of Crete, gave HDT a tour of the firm's new detention department soon after hours of service changes went into effect.
"Shippers have shown tremendous improvement in driver detention," Ostegard explained. But only if carriers are able to validate and support detention charges.
Crete and its companies added an entire department that tracks and notifies shippers when drivers are being held at the dock too long.
"We had to prove to them (shippers) that there was a financial incentive to avoid detention," Ostegard said.
Crete began charging for every unacceptable minute drivers were kept waiting. "We had to accurately measure detention time," Ostegard said. "If you can't substantiate it, you won't get paid."
Driver input is the key to proving detention charges at Crete. The detention team keeps track of thousands of drivers and their hours, with help from Qualcomm satellite communications. The detention department also keeps shippers in the loop and advises them hourly when they are misusing driver time.
Drivers and their needs have always been a priority with Acklie and, consequently, his staff.
That is probably why Crete and its other companies have some of the lowest driver turnover rates in the country. While many truckload fleets register driver churning of more than 120%, Crete has less than 40% annual driver turnover. They also have the best SafeStat record (the fed's fleet safety rating system) in the nation.
The average age of Crete drivers is 47. Drivers enjoy profit sharing, a 401K and numerous benefits. "It's not the driver who's been with us a year who quits," said Acklie. "If we keep them a year, we keep 'em. Mature drivers are the key. Mature drivers help your safety records - and insurance is such a big factor."
While a driver force with an average age of 47 is an obvious benefit, there are obvious liabilities, too. How long can you sustain growth and productivity without new blood?
Acklie helped found a Professional Truck Driver Institute truck driver training program at Southeast Community College in Lincoln. They focus on taking kids off the farm and providing them with the best training to become professional commercial truck drivers.
Crete supplies the tractors and trailers for the program.
"Farm kids already know how to drive a truck, shift a 13-speed transmission," Acklie said. "We teach them the rules of the road, safety, how to log hours. Our driver of the year has come out of that school on several occasions.
"A first-year driver out of the school makes more than a first-year lawyer. It's a great way to improve their income and opportunities. We get great support from the state of Nebraska. It's a win-win-win for everyone."
Withstanding change and remaining on the cutting edge has sustained Acklie's success through the last few years in trucking - during one of the worst economic downturns in industry history. The companies that sustained profitability through the past few years exemplify the spirit of truckload.
"Many carriers didn't make it after deregulation. They fought change - they couldn't change with the times," said Acklie. "When something changes, you have to change with it."
An example of that was a chief executive at ABF who spoke out at a Contract Carrier Conference meeting against truckload fleets back in the '80s.
"He said, 'We can't let all these cream skimmers get in here,'" Acklie laughed.
"But now he is one."
— Deborah Whistler
