Jerry Moyes
From one truck to the nation's largest truckload fleet.
From one truck to an empire that runs more than 18,000 power units and 3,000 owner-operators, it's Swift progress indeed.
Like many in truckload, Jerry Moyes started with one truck. And just like other prominent truckload figures, he has parlayed that unpretentious start into a major force in truck transportation.
The scale of what Moyes has done, though, is very different from most. His company, Swift Transportation, headquartered in Phoenix, Ariz., is the leading public truckload carrier with more than 18,000 power units and another 3,000 owner-operators. Yet it is only part of the Moyes empire that also includes Central Refrigerated and a majority interest in Central Freight Lines and extends to other interests as diverse as restaurants and professional sports. He is the owner of the NHL Phoenix Coyotes and has been an investor in the Phoenix Suns and Arizona Diamondbacks.
His trucking start was in the mid-'60s. He had grown up in Plain City, Utah, a small town of 850 souls that is also the birthplace of no fewer than four major trucking companies: The Moyes family was very close to the England and Knight families. C.R. England was based there and one of the England family members, Jeff England, went on to found Pride Transport out of Salt Lake.
"We jokingly say there was diesel in the water and we were all born in sleepers," said Moyes in a recent interview.
Back then, Moyes' father, Carl, was running a small trucking operation and also working for C.R. (see the C.R. England story on page 76).
"Dad's trucking company was only five or six trucks, back in the early '60s," recalled Moyes. I brought one old beat up Diamond T down here (to Phoenix). A truck with a 262 Cummins and a five and a three." Branching out on his own, Moyes hauled steel out of the Port of Los Angeles for points in the western states, backhauling cotton and citrus - which was also unregulated back then.
"We had a company called Common Market Distributing and we were actually buying and selling the product. Because we were hauling our own product, we didn't need Interstate Commerce Commission authority," he explained.
That small company operated for a few years, buying up import steel and hauling it to Arizona and other parts of the West. During that time Moyes' father moved to Phoenix, bringing along his brother Ronald and later, Randy Knight. That how far back the association between the Swifts and Knights goes. "We were all from the same hick town," Moyes said.
"My dad and the Knight's dad were very, very good friends."
A big break came along with the opportunity to acquire operating authority. In 1966, Swift Meat Co. opened its doors in Tolleson, Ariz., and one of the family members was charged with task of establishing a trucking company called Swift Transportation. The parent meat company supported the trucking company's application for ICC contract authority. But the transportation company apparently was not in very good hands.
"Over the next two or three years it quietly got into financial trouble. [The owner] went through the money and we basically were able to buy what remained the day before the IRS shut the door. We bought basically the shell company. But it had an ICC number," recalled Moyes.
"We didn't pay anything for the authority, but it was the key to the door."
All it had was the contract authority for this meat plant, so between 1970 and 1980 Swift's big challenge was to prove the need for its services in other commodities and lanes to obtain additional ICC authorities.
By the time the industry deregulated in 1980, Moyes had accumulated more than 250 separate ICC authorities. But, like all authorities granted during the regulated years, they were very restrictive, with such edicts as a "plant site to five states."
During those 10 years, Moyes said he did everything from changing tires to sales, but a lot of time was devoted to "fighting like heck to get those authorities approved by the ICC."
Fighting was part of the process because trucking companies would try to prevent new entries into their protected lanes and commodities. Moyes explained: "Those that had (the authorities) defended them strongly. We were the 'have nots' back then."
It was an uphill battle because the big carriers had amassed broad authority - general commodities between cities. So every time Moyes would file, there would be a protest. "They'd say 'we'll give this customer all the trucks he needs.' "
To come out on top in the authority granting game meant having a gimmick. "We'd say were going to haul 60-foot steel and the big LTL companies couldn't haul 60-foot steel. Therefore you'd have a case and you'd have to make it. I sat with many shippers and had them call other carriers and say, 'I've got ten loads of 60-foot steel and it needs to load on a Saturday.' And they'd say 'Oh we don't work on a Saturday.' "
As an example, Moyes recalled this anecdote: "There was a major shipper here in Phoenix that had multiple loads of oversize cement pipe. But he was too busy to call all these freight companies just to find they couldn't haul this pipe. So he said. 'Jerry, you go and do it and tell them you're me.'
"So here I am, sitting at his desk, calling these 10 different trucking companies, saying 'This is Joe at the shipper, and I've got these 100 loads of cement pipe that's gotta move,' and going through this big routine so they'd all come back and say 'no, we can't do it.' Then I call this one guy and he says "Dammit Jerry, I know that's you.' "
The major competitors at that time were companies like C & H Freightways and Reliance Trucking, Moyes recalled, but he said the biggest protests came from the big LTLs. And the fact that they really didn't want to haul the freight was immaterial. They had to protect their authorities.
Then in 1980, the Motor Carrier Act changed the way business was done, and like the other entrepreneurs in the truckload industry, Swift ended up the big winner.
"Truckload really got invented as a result of deregulation. But there were already truckload companies like Swift and Werner [hauling the freight]. Werner's history is exactly like mine. He was a flatbedder and he was hauling grain - an exempt commodity - from Omaha to New Orleans for export. Then he was buying and selling lumber to haul back. In his book he talks about the drivers always trying to cheat him, so whenever they'd have a flat tire, he'd make them put a copy of the receipt between the tube and the tire." Moyes laughed: "And we used to do the exact same thing."
These carriers who had amassed ICC hauling authority understood the old system. As Moyes said, they were on a first-name basis with the ICC commissioners. They were also doing whatever was necessary to exist while operating within the ICC's rules. "The system was broken and the customers suffered. We could offer better service at a lower price. But you could never bring price up during a hearing. The process was to prove a necessity," recalled Moyes.
As he pointed out, prior to 1980, the trucking businesses hauled three types of freight: exempt, private carriage or hot freight. And as the industry deregulated, that was the edge the emerging truckload carriers had over the big fleets with ICC authorities. In his words, the truckload guys were battled tested and knew how to compete.
In 1980 Swift had grown to 150 trucks - in part because Arizona had deregulated intrastate in 1976. But it's not just in size that his fleet was far from the operation it is today. Moyes candidly admitted that cash flow day to day was always a problem. "At one point we had four major customers and if the check wasn't ready by noon Friday, we didn't make payroll. We had a guy who used to sell us fuel. One time he said 'Jerry, you're at 60 days.' I said I can't afford to pay, so you'd better give me 90 days, and oh, by the way, I need another load of fuel' - which he did deliver."
Between 1980 and 1985, the company grew to around 300 trucks despite the capital intensive nature of the business and the day-to-day struggle with cash flow. In 1990, Swift Transportation went public at about 1,000 trucks. "That was a shot in the arm. With the discipline and responsibilities of a public company driving us we never looked back."
The years 1980 to 1990 redefined the trucking business model, Moyes said. Deregulation opened the door, but so did technology. Within the new environment they brought new efficiencies, cost cutting and strict controls. Swift's success was further enabled by a non-union workforce that was led by very efficient entrepreneurs who had learned the hard way how to "squeeze the buck."
As with other truckload leaders, Moyes and his team really knew how to sell.
They were able to sell new benefits that technology brought to the business of hauling freight. Moyes said emerging carriers were early adopters of computers, satellite asset management and customer access to information about their freight. "Truckload brought in computerized dispatch," he said. Also, he pointed to different attitudes about equipment shown by the new fleets. "The entrepreneurs looked at truck specs and introduced the notion of running new equipment. They were quick to take advantage of the changing environment. At deregulation, trailers were at 40 feet. They went quickly through 42, 45, 48, and now 53 feet.
"That's because the truckload carriers went to the customer to talk about price and service."
And mobile communications got the driver off the phone, improving driver quality of life. Moyes, too, emphasized the influence truckload carriers had on truck design, with the evolution of the sleeper berth from a small compartment barely large enough to lay down in, to today's roomy "condos."
Equipment, comfort, emphasis on the driver were all brought along by truckload, he said, and it was enabled by their sales and marketing. There were many innovations but they were driven by the truckload side, Moyes explained. "Even truckstops all really developed because of truckload."
All this change distanced the emerging truckload from the last remnants of the regulated era. Many fleets could not deal with that change and the attrition was extreme. A look at the top 100 carriers in 1980 and in 1990 shows few made it through the decade.
But change is good at Swift.
"Most people are afraid of change, Jerry eats it for lunch," said David Berry, who is vice president at the company and responsible for the owner-operator division.
According to Berry, the success of Swift has been based on a unique business within truckload. The organization is built around the idea of decentralizing the growing company, while making everything transparent with computers and real-time communications. That means making each terminal a business unit in its own right, but an integrated part of the overall operation.
Berry continued: "Jerry has a vision that includes his people. Back in the early 90s - just after the company went public - he had a sort or management retreat. He had the top 40 or so people at the time in the room, explained his mission and vision of the future. But he put it like this: 'I want to make everyone in this room a millionaire.' That makes this a different company culture than most. Jerry is good at sharing the wealth.' "
But there is also the entrepreneurial spirit. "Jerry wrote the book on trucking, is very courageous, and has a high tolerance for risk. All true entrepreneurs do. He sees what many can not; that is, how to manage the risk, fix the problem and execute on the plan. Where some people will take the pot and pull off a percentage to make it a win, Jerry will push it all back on the table."
Swift is now just one of many businesses that are controlled by Jerry Moyes. In the same way that he has shared his wealth with his employees, he has also shared it with his community.
An early involvement with the effort to get a hockey franchise into Phoenix resulted in him buying the Phoenix Coyotes. He has a company that builds ultimate custom motorcycles out of a generous offer to support young people with a vision for creative design, and he operates a charter plane service organization that caters to sports teams because otherwise there wouldn't be one in Phoenix.
Moyes lead the multi-million dollar fund-raising effort to build, staff and operate the West Valley Children Crisis Center. He personally contributes to many children-oriented charities, as well as provides scholarships to deserving students every year. He has made major contributions to Weber State, his alma mater in Utah.
Jerry Moyes has parlayed a one-truck owner-operator business that was a hand-to-mouth trucking company to a multi-billion dollar conglomerate. His is the essence of the entrepreneurial spirit that is the foundation of the truckload carrier.
— Steve Sturgess
