Estes Express Owners Stay Committed to Independence in Merger-Driven Industry

By Chip Jones, Richmond Times-Dispatch, Va.

Apr. 10–Nobody knows the exact moment W.W. Estes turned the crank on his used Chevrolet truck in the small town of Chase City in Southside Virginia.

“Nobody alive remembers,” said Rob Estes, grandson of the founder of Estes Express Lines.

This hasn’t stopped Estes’ heirs at the trucking company he began from throwing one heck of a birthday party.

Rob Estes, president and chief executive officer of Richmond-based Estes Express, and other relatives who run the family-owned company know enough about their grandfather’s story to make it the cornerstone of a 75th anniversary celebration:

How in 1931 he seized a business opportunity in his hometown of Chase City, offering to haul cattle for nearby ranchers. And how W.W. Estes was available to move from farming into trucking, hauling livestock and farm supplies across southern and Southwest Virginia.

“My grandfather didn’t have a windshield on that first truck,” Rob Estes said, posing with family recently outside Estes’ headquarters at 3901 W. Broad St. They stood in front of a fully-restored 1931 truck with running boards and wooden truck bed.

This custom truck has a windshield and something else the first vehicle lacked — a driver’s seat. W.W. Estes sat on a crate as he cruised the rural roads, but that “didn’t slow him down,” according to the company’s new historical pamphlet.

The same could be said of the company with humble beginnings. Estes Express Lines has grown to 175 locations across the country, making it the nation’s 23rd largest trucking company, and 2005 revenue of $1.15 billion. In the “less than truckload” segment — where multiple shipments are hauled on the same trailer — Estes ranks seventh in the country based on revenue, making it the largest family-owned carrier.

The trucking arena is fiercely competitive with larger companies routinely gobbling up smaller ones (witness UPS’ 2005 acquisition of Richmond’s Overnite Transportation). But W.W. Estes’ descendants are determined to remain independent.

The less-than-truckload companies can be tempting targets because they can help larger competitors “fill in existing voids for those carriers,” said Steve Hupp, corporate secretary. Typically, large LTLs want to add routes and expand their reach.

In the case of UPS, the parcel carrier was able to become more competitive with archrival FedEx by acquiring a major LTL carrier in Overnite.

The trucking business can be deceptive, said Thom Albrecht, a trucking analyst at Stephens Inc., an investment banking company.

“It’s about a lot more than having trucks,” he said. Succeeding as an LTL — as opposed to a long-distance hauler — requires having enough real estate for freight terminals to load and drop off shipments.

“Many cities are not very welcoming to the idea of a major truck terminal,” Albrecht said. “It makes more sense for carriers to merge than to build an LTL carrier from scratch.”

This dynamic led to a dramatic drop in such companies from about 1,000 in the 1980s to 100 to 110 today, according to Albrecht.

Estes is pursuing a middle course — large enough to offer competitive shipping rates and service, but small enough to try to keep its reputation for service.

“To maintain that family atmosphere, you have to be independently owned,” Hupp said.

The 75th anniversary project is part of Estes’ efforts to maintain its family ties with customers and employees.

“One of our biggest challenges is to be in 46 states, and still be a family,” said Patricia A. “Trish” Garland, vice president of corporate communications, and a granddaughter of W.W. Estes.

Rob Estes, her first cousin, added: “Sometimes when you look at big business, it’s impersonal. That’s not what made Estes successful. That’s not us.”

Celebrating the company’s origins in a big way seemed like the right thing to do — especially given Estes’ recent acquisition of California-based G.I. Trucking and its expanding employee base with 13,500 full- and part-time employees.

The celebration became a major project for Garland’s corporate communications team, and resulted in a companywide bash March 29. Along with cake at the 175 sites around the country, Estes provided 45,000 copies of a glossy, photo-filled pamphlet — one for each worker, with plenty more for an estimated 25,000 customers and others.

On April 21, Estes will hold a headquarters fete for clients, media and Richmond-area business leaders.

Company officials declined to give a price for the promotional effort. “It’s kind of like your daughter’s wedding,” Rob Estes said. “I didn’t even ask.”

Whatever the final tally, he said it’s money well spent. It’s about not only the Estes family, but also Estes Express’ 13,500 team members, he said.

Still, there remained a pesky question — when did their granddaddy actually start trucking? There was no written record, and W.W. Estes died in 1971.

They finally settled on a kind of substitute birthday, one that’s recorded in the state’s records — March 2. On that day in 1949, the State Corporation Commission officially issued an operating permit to Estes for the transportation of goods.

Almost by default, it seemed, March 29 became the official birthday.

Part of the fun has been remembering W.W. Estes, a man known for a strong work ethic and practical jokes.

“We all grew up going to Chase City to his farm,” said Rob Estes, 53. “He was a person people looked up to.”

Christmas on the farm was always fun. “He gave all the girls a little box — inside was a pig tail. He was quite a joker.” The boys got socks.

Garland, 39, recalled the colorful souvenirs her grandfather kept on his desk in Chase City, such as a donkey that released cigars when she pulled its tail.

In the company’s historical pamphlet, W.W. Estes projects the stoic individuality of a Depression survivor — dark top hat, overcoat, no smile. “He once told a reporter that he knew of no secret formula for success,” the brochure states. “Just hard work followed by more hard work.’

His son, Robey Estes Sr., served in the Army during World War II, including the Normandy invasion and the Battle of the Bulge. He received two Purple Hearts.

Returning home, Robey Estes Sr. became general manager after the company moved its headquarters to Richmond in 1946.

Even then, there was a temptation to sell out.

“My grandfather had offers to sell back in the 1950s,” Rob Estes recalled. “My dad talked him out of that.” Laughing, he added, “My dad probably would have sold me before he sold the company.”

In 1981, the company had its first month without a profit — a result of the deregulation of the trucking industry.

Robey Estes Sr. sometimes stuttered. But not at that critical moment. He called his employees together in Wilson, N.C., and said firmly: “I’ve never been a part of something that was a failure, and I don’t plan to start now. There’s going to be some hard work here. Anyone who doesn’t want to work hard, there’s the door.”

Another defining moment was Aug. 30, 2004, when the remains of Tropical Storm Gaston dumped more than a foot of rain on Richmond and flooded the basement at Estes’ headquarters — where its data center and records were located.

The company suffered about $5 million in damage to its computers before insurance but managed to keep operating. It moved its central computers to the second floor and invested in a redundant system based in Arizona.

“You feel confident and secure and something happens, and you wonder if things are going to be the same,” Rob Estes reflected. “Our team here, and in the field, took a situation that could have completely destroyed a weaker company. I don’t want to go through it again, but it showed what we can do in adversity.”

His grandfather couldn’t have put it better.

THE ESTES FAMILY

Here are the descendants of company founder W.W. Estes still working at the company.

–Robey W. Estes, Jr. (Rob): President and CEO, son of Robey W. Estes Sr., grandson of founder W.W. Estes

–William T. Hupp (Billy): chief operating officer and executive vice president, son of Margaret Estes Hupp (Robey Sr.’s sister), grandson of W.W. Estes

–Stephen E. Hupp (Steve): corporate secretary, son of Margaret Estes Hupp, grandson of W.W. Estes

–Patricia A. Garland (Trish): vice president of corporate communications, daughter of Helen Estes Garland (Robey Sr.’s sister), granddaughter of W.W. Estes

–Robert W. Speight Jr. (Bobby): general manager of Estes Specialized, son of Mary Estes Speight (Robey Sr.’s sister), grandson of W.W. Estes

–Thomas H. Donahue Jr. (Tom): vice president of human resources, husband of Mary Sue Estes Donahue who is Rob’s sister and a granddaughter of W.W. Estes

–Carrie E. Johnstone: manager of special projects, daughter of Rob Estes and great-granddaughter of W.W. Estes

TIMELINE

–1931: W.W. Estes buys a used Chevrolet truck

–1933: First office opens on Main Street in Chase City

–1937: Officially named “Estes Express Lines”

–1938: Establishes branch terminals in Richmond and Norfolk

–1946: Moves home office to Richmond

–1965: Purchases Coastal Freight Lines

–1967: Purchases Carolina-Norfolk Truck Lines

–1971: W.W. Estes dies

–1972: Purchases A.C. Express and Johnson Express

–1980: Partial deregulation of interstate trucking

–1999: Opens first terminal west of the Mississippi in St. Louis

–2003: Begins providing service to major commercial markets in Mexico

–2004: Remains of Tropical Storm Gaston destroy ground-level data center in home office; Purchases California-based G.I. Trucking

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Copyright (c) 2006, Richmond Times-Dispatch, Va.

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