What effect has the recession had on your businesses?
With Estenson, all the equipment that’s contracted gets paid for whether it’s in use or not. But we contract at a level where we’re confident that the assets will be utilized continuously. So when there are peaks, we bring in additional equipment — either we rent it or we use some additional equipment that we have for when our [contracted] tractors and trailers are down for repairs. That revenue is what we lost during the recession. But our margins stayed good based on our contractual agreements.
We’ve continued to sign new contracts. When people started looking at controlling costs, we started getting a lot of phone calls. In 2009 we’ve added more than 100 employees, and we’ll add about 75 tractors to our fleet.
On the Truline side, truckload carriers have been hurt by the recession because there’s been very little freight. When there is not enough supply to go around, there are price pressures. A lot of the other smaller truckload companies have taken whatever business they could get their hands on just to cover their fixed costs. But if you do that you’re not covering all your costs, so you can only do it for so long.
Have you gotten more vigilant on costs during the recession?
No. Truline has been around since 1962 and has always been very conservative. The owners and I have very similar finance philosophies. Our expenditures, including capex, are based on need, not on desires or typical [trucking] industry patterns. All petty cash reimbursements have to be approved by me before AP issues the check. When I see an expense for Starbucks coffee, I tell them to stop it — go out and buy a can of Folgers instead. We believe that by watching the pennies, the dollars will take care of themselves.
You personally approve all petty cash reimbursements? How is that wieldy for a $90 million company?
It really doesn’t take that long. We don’t use petty cash for everything. We use it for, say, tolls, meals for safety meetings, and for scale tickets in areas where we don’t have a contract with a scale company to get the tractors weighed. I look to make sure it is not an old receipt, that it is an original, and make sure that we’re not paying some guy three times to get his truck weighed. We have over 50 sites. That could add up to be a huge area of abuse.
But how much can you save by overruling Starbucks reimbursements and things like that?
It tells the site managers and department heads that they can’t get away with spending $100 here and $500 there. They can’t go out and buy a new laptop because they have one that is six months old. They’ve got to request it before they spend it. We don’t want them asking for forgiveness; we want them asking for permission.