CR England, Inc

views updated

CR England, Inc.

4701 W. 2100 S.
Salt Lake City, Utah 84120-1223
U.S.A.
Telephone: (801) 972-2712
Fax: (801) 977-6736
Web site: http://www.crengland.com

Private Company
Founded: 1920
Employees: 2,700
Sales: $500 million (2003 est.)
NAIC: 484121 General Freight Trucking, Long-Distance, Truckload

CR England, Inc. is a family-owned and operated trucking company based in Salt Lake City, Utah, operating more than 2,600 trucks and 4,000 refrigerated trailers serving the United States, Canada, and Mexico. In addition, England Logistics offers transportation management services and England Transportation Consulting analyzes customers' shipping programs and helps to lower overall freight costs on a "pay for performance" basis. CR England boasts a strong safety record, supported by six driving schools located across the United States. For the past two decades the company has been in the vanguard in the trucking industry in the adoption of high technology, among the first to use computers to consolidate and track loads and deploy a satellite communications system that allows management to know the location of all trucks and, thus, be in a position to better manage assets. As a result of these and other changes, revenues have grown from $30 million in 1985 to about $500 million 20 years later.

Beginnings in 1920

The man behind the CR England name was Chester Rodney England, born on a farm in Plain City, Utah, in 1896. Shortly after marrying at the age of 20, England, a devout Mormon, departed on a mandatory church mission, promoting the teachings of the Church of Jesus Christ of Latter-Day Saints in the South. When he returned home 30 months later he turned to farming, but soon realized that he was not cut out to be a farmer. In order to make a living, he bought a Model T truck in 1920 to haul farm products to the market. He found a ready demand for his service from farmers in Utah's Weber County and Cache Valley. In addition to produce, the industrious England began to haul milk for the Weber Dairy, starting his day at 4 a.m. to serve the dairy and then devote his afternoons to transporting produce to the market. England expanded the territory he served and began to add trucks and drivers. When his sons, Gene and Bill, were growing up they became immersed in the business. During the summers they joined their father on the road, riding along on weeklong runs to Wyoming. When they were old enough to drive, the boys spent their summers driving the several one- and two-ton trucks that the company owned.

After the United States entered World War II in December 1941, Gene and Bill England served in the military. During this time, their father began to buy Mexican bananas in El Paso, Texas, and sold them in Utah. His trucks would then return to Texas with loads of potatoes and pick up more bananas. The business was prosperous enough that after his sons were discharged from the service England was able to buy his first diesel truck, a used 1940 Kenworth. Shortly thereafter, he bought a 35-foot trailer with one of the new mechanical refrigeration units in it. Because the system was unreliable the company continued to utilize an older method employing ice bunkers: The trailer was kept cool by means of a fan and two feet of ice in the front of the trailer.

Coast-to-Coast Capabilities in 1950s

England was always on the lookout for new opportunities. He added more trucks and became involved in Idaho potatoes, with the company eventually operating its own packing shed and a storage facility. During the 1950s, when Mexican bananas were overtaken in popularity by Central American bananas, England switched his focus from Texas to California and Arizona and began to haul produce from these states. In the late 1950s the company made its mark by becoming the first trucking operation to offer 72-hour, coast-to-coast service. The driver of the first shipment of produce from California to Philadelphia was named Robert Gould. Because this new service proved so successful, about a year later a temporary office was set up to serve the Philadelphia area, with Gould hired as the first East Coast terminal manager. (A permanent terminal was later opened in Pennsauken, New Jersey. The East Coast office would then be relocated to Burlington, New Jersey, in 1978, but with the addition of new technology and management the company was able to close the office in 1982 and run all of the East Coast operations out of the Salt Lake terminal.)

In 1977 a third generation became involved in the business when Daniel England, the current chief executive officer, joined the company, just as the trucking industry was about to enter a period of radical change caused by deregulation initiated by the Reagan Administration. CR England like other carriers experienced a significant drop in shipping prices and had a difficult time bringing costs in line with the new reality. As a result, many trucking companies failed, and in 1985 CR England, reduced to about 175 trucks, lost money for the first time in some 60 years. Moreover, the Department of Transportation conducted a safety audit of CR England in 1985 and found it lacking. The company was fined and its status with the DOT was severely compromised. Management decided it had to take steps to aggressively address the company's economics as well as its safety record.

CR England made safety a core value and became diligent about adhering to DOT requirements, such as auditing driver logs, making sure the company followed drive and sleep regulations, and, if need be, curtailing loads if the job took too many hours to drive. A safety management system was implemented and safety managers conferred with drivers on a regular basis. CR England also became much more careful about the drivers it employed, implementing a screening procedure that included drug testing, and raising hiring standards so that eventually only around 30 percent of applicants qualified. In addition, in the late 1980s CR England became one of the first carriers to establish an onsite driver training school. Drivers were also encouraged to be involved in the safety program. They shared driving tips with one another, and the company provided an incentive program, awarding prizes for good driving records. As a result of these changes, CR England won the Truckload Carrier's Association Grand Safety Award three consecutive eligible years.

Management also took steps to improve the company's fi-nances. Accountability tied to incentives and goals was a major part of the company's new strategy. To avoid lapsing into complacency, the goals were revised each quarter. CR England also began to look to high-tech ways to gain a competitive edge. The first step taken in the 1980s was to embrace computers to help in handling logistics and make more profitable use of equipment. The company then leveraged its computer system to digitally image all of its paperwork—invoices, receipts, contracts—to greatly improve accounting operations. Additional costs to the electronic infrastructure were less than $100,000. In the early 1990s, the company installed satellite communications systems in all of its trucks, thus allowing management to know the precise location of drivers and instantly communicate with them, thereby providing even greater control in the management of equipment. Another major improvement was to the phone system. Although the company maintained 150 WATS lines, booking agents might receive 10,000 calls in a day, which meant that many potential customers had to be put on hold. With the trucking industry so competitive, many of these callers, rather than wait, simply hung up and tried a rival firm. The company's phone system was unable to capture the phone number of the abandoned call, resulting in an untold amount of lost business. Rolm, which made the equipment, was hired to upgrade the system to add automatic number identification. Coupled with a computer database of customers, the new system, rolled out in October 1991, allowed booking agents to identify the source of the abandoned call and to promptly call back the shipper to take the order. Customers soon realized that an agent would call back as soon as possible, allowing them to hang up and pursue other tasks rather than track down another carrier. Once the system was established, the company estimated that it captured from 12 to 24 jobs each week that would have previously been lost, representing a considerable amount of increased revenue. The new telephone system also helped the company's telemarketers with a preview dialing feature, which allowed the agent to create a list of customers to call on a frequent basis, whether it be daily or weekly. The preview dialing program would call down the list and when it found a connection, the telemarketer's computer screen would display the customer's record. Once that call was completed, the program would call the next number on the list. As a result, the productivity of the telemarketers virtually doubled. Taken altogether, these changes cut costs, made CR England more competitive, and resulted in annual growth in the 20 percent range. In 1985 revenues totaled $30 million, but by 1993 that amount increased to $160 million. Despite this significant increase in business, the company did not have to hire additional staff in the credit or billing departments, and the savings went straight to the bottom line.

Company Perspectives:

CR England Trucking is dedicated to meet all of your trucking and shipping needs, with over 2,600 trucks and over 4,000 refrigerated trailers serving the United States, Mexico, and Canada.

Expansion in 1990s

In the early 1990s CR England expanded in a number of directions. With the passage of the North American Free Trade Agreement (NAFTA), the company quickly began to ship to the Mexico border. CR England forged relationships with a number of Mexican carriers, who would take the trailers at the border and deliver them to their final destination in Mexico. CR England trucks, in turn, could pick up Mexican loads for delivery in the United States. All the Mexican partners also used satellite tracking technology. In addition to adding an international division, CR England began to offer logistical services related to trucking. In 1994 it established England Logistics to offer traffic and transportation management, dedicated contract carriage, contract distribution center services, and fulfillment services to be marketed on a national basis—primarily to food processors and manufacturers. At first, the unit focused on companies that needed refrigerated trucking services, with dry truckload service to follow. A seasoned executive from Chicago-based TNT Contract Logistics, Ronald Wallace, was brought in to serve as president of the new business.

By 1997 CR England reached $300 million in annual revenues. Realizing that drivers were a primary asset, the company continued to take steps to retain them, an important consideration since the trucking industry had a high turnover rate. The company had more than 3,000 drivers and in order to continue to expand the business it had to hire as many as 100 new drivers each week. For driver comfort, truck cabs featured beds, a refrigerator, and a television. Family members were also allowed to accompany drivers on trips, helping to alleviate some of the problems associated with drivers being separated from their families for extended periods of time. The company built a driver rest area in Salt Lake City called English Village, which featured overnight accommodations, barber shop, fitness center, video arcade, credit union, theater, and restaurant. To reward senior drivers, CR England launched an effort to create more owner/operators among its drivers as a way to provide further incentives for making a long-term commitment to the company and give employees a greater share of the rewards.

By the end of the 1990s CR England exceeded $400 million in annual revenues and continued to pursue new ways to realize further growth. It took advantage of the Internet to allow customers to book loads as well as to track their shipments. The company also decided to outsource the management of its paperwork. Although it was essentially a breakeven affair, the change speeded up the processing of the paperwork submitted by drivers. To remain competitive, CR England instituted a cost containment initiative, which led to a surprisingly simple, yet highly effective, way to cut nearly $200,000 per month in fuel costs. Traditionally, drivers left their engines running during meals or overnight stops. While the practice kept the cabs warm, it also cost carriers millions of dollars a year. The company's answer was to install Webasto auxiliary heaters and idle-limiting software in each truck.

In 2002 the company formed two new value-added divisions, the Diversified Division to arrange shipping for companies that contract freight hauling, and England Transportation Consulting to offer a range of transportation management services, including transportation cost analysis, carrier selection and rate negotiation, carrier contracting, compliance monitoring, inbound freight management, return goods management, and loss and damage claims filing. ETC offered a no-risk deal to customers, the company's fees generated from the amount of money a customer saved on shipping. There were no upfront charges or consulting fees. Both units operated out of Louisville, Kentucky. In December 2002 the Diversified Division expanded by acquiring one of its competitors, Wisconsin-based Service Transport Inc.

Following the terrorist attacks of September 11, 2001, CR England decided for the first time in 15 years to hold back on growing its fleet. When the company returned to adding drivers, it faced increasing challenges, due in large part to heightened national security provisions that resulted in a more stringent screening process. In addition, the DOT, in the first major change to standards since the 1930s, lowered the maximum number of driving hours from 70 to 60, which meant that carriers had to hire more drivers to make up the difference. When the measures went into effect in 2004, drivers were also allowed to work 11 straight hours as opposed to 10, but they were now required to rest two additional hours between shifts. According to studies conducted by CR England these rules were actually counterproductive, negatively impacting a driver's productivity by 5 to 10 percent. The company was worried that if lower productivity led to lower earnings, the driver shortage would grow even worse.

CR England did not face a shortage in family members to help run what was now a $500-million-a-year business. Scores of relatives were employed at all levels of the company. Gene England told CNNfn in a 1998 interview, "I have 34 grandchildren. And Bill has quite a number. . . . You've got to grow this thing to provide jobs for all of our grand kids; there are so many of 'em. And still growing."

Principal Subsidiaries

Diversified Division; England Logistics; England Transportation Consulting.

Key Dates:

1920:: Chester Rodney England founds company.
1957:: Company offers 72-hour, coast-to-coast service.
1977:: Third generation becomes involved in running company.
1985:: First loss in decades leads to major changes.
1994:: England Logistics is launched.
2002:: Diversified Division and England Transportation Consulting are started.