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 <strong>2018</strong>
Let our employee benefit expertise benefit you. ...the wise choice. We’ll create a winning game plan with you. Employee Benefit Consulting | Benefit Plan Management | Insurance Brokerage Phone: 855-731-0277 | www.acumenadvisors.com Cedar Rapids, IA | Des Moines, IA | Joplin, MO | Davenport, IA | North Liberty, IA CBJ’S LARGEST PRIVATELY HELD COMPANIES <strong>2018</strong> 7
Change language