CBJ's Largest Privately Held Companies 2018

CRST International
1
CRST International continues to lead the pack of largest
privately held companies in the Corridor, with some
big acquisitions driving revenue at a time when organic
growth has been hard to achieve.
The Cedar Rapids-based company is one of the most
diversified carriers in the country, with eight operating
companies serving different segments of the market and $1.55
billion in revenue. It is likely the largest privately held trucking
company in the United States after a rival carrier, Schneider National,
went public in 2017.
CRST serves shippers with
8,100 company drivers and
independent contractors and
about 6,100 trucks. In 2017,
it was ranked the nation’s
19th largest for-hire carrier by
Transport Topics magazine,
up from 24th in 2016.
Being privately owned
by the Smith family of Cedar
Rapids has helped CRST
take advantage of many
growth opportunities while
also taking care of its home
DAVID RUSCH
PRESIDENT & CEO
community, according to
CEO David Rusch.
“Being privately held gives
us a lot of flexibility in the
marketplace because we can react much quicker to our shipper’s
needs than some of the large publicly-held companies that have
more bureaucracy,” Mr. Rusch said. Difficult decisions such as
whether to acquire another company or make a major investment
can be made faster, he added.
Chairman John Smith and his wife Dyan have been leaders
in the city’s recovery from the flood of 2008, showing confidence
in the flood-affected downtown area by building a $36
million office tower, donating more than $1 million to neighborhood
rebuilding effort Block by Block and supporting wetlands
restoration efforts in the Cedar River watershed that will
reduce future flooding.
CRST has drawn growth in recent years from its 2016 acquisition
of California-based Gardner Trucking, which added
about $400 million in revenue, and its 2015 acquisition of Pegasus
Transportation, a Kentucky-based carrier specializing in
time-sensitive loads such as blood plasma and pharmaceuticals.
Without those acquisitions, Mr. Rusch said growth would
have been elusive. Shipping demand rose rapidly when the
economy first began recovering from the last recession in 2010.
Many carriers had gone bankrupt, leaving the surviving, larger
carriers with all the business they could handle. Those companies
then went on a truck-buying spree, and by 2016, there was
overcapacity, meaning carriers were unable to raise rates even as
costs continued to escalate.
“Our legacy companies, like most of our peers, were forced
to cut fleet size over the last couple of years,” Mr. Rusch said.
“Freight wasn’t strong, utilization dipped a bit and we just
couldn’t get the drivers.” Without CRST’s recent acquisitions, he
said overall revenue would have declined.
Although shipping demand has picked up since last year,
CRST and most other
carriers have been
hard-pressed to take
advantage of it. Heavy
Duty Trucking magazine
reported that
many shippers began
having trouble as early
as September 2017
finding enough trucks
to satisfy customers’
shipping needs. That
shortage has bloomed
into a “capacity crisis”
in recent months.
“It’s the worst driver
shortage I’ve seen
in my 38 years in the
industry,” Mr. Rusch
said. “The only difference
between 2010
and today is that none
of us can get drivers.”
CRST announced a
pay enhancement program
in January that
will cost it about $14
THE TEAM
EXECUTIVE TEAM
John Smith, Chairman
David Rusch, President & CEO
Hugh Ekberg, COO
BOARD OF DIRECTORS
John Smith, Chair
Dyan Smith
Ian Smith
John Bowron
Tony Golobic
Dave Kulik
Robert Lake
Peter Latta
John Larkin
Henry Royer
SUPPORT TEAM
Cedar Rapids Bank & Trust
RSM US LLP
Simmons Perrine Moyer
Bergman PLC
million this year in an effort to attract and retain more drivers.
One operating company, CRST Specialized Transportation Services,
introduced a $12,000 bonus program that pays the driver
an extra $1,000 per month for the first 12 months on the job.
The inability of trucking companies to raise rates during the
recent period of overcapacity has slowed the company’s pace toward
$2 billion in annual revenue, Mr. Rusch said, but he’s confident
CRST can reach the goal within the next couple of years.
“We’re entrepreneurial,” Mr. Rusch said. “We just don’t take
‘no’ for an answer. When there’s a challenge out there, we have
solutions. We understand them, we know what we have to do
to fix them and I’m confident in my management team that we
can execute and achieve our goals.”
- Dave DeWitte
PHOTO MIRANDA MEYER
6 CBJ’S LARGEST PRIVATELY HELD COMPANIES 2018