One of America’s oldest family-owned trucking companies didn’t get that way by being, well, old.
In fact, the Decker Truck Line fleet is turning younger than ever, and it’s a nimble, proactive approach to growth strategy and market conditions that continues to guide the Fort Dodge, Iowa-based firm in an industry that challenges most companies to reach even relative adolescence. As a result, the company that delivered its first load in 1931 remains a steadfast presence as one of the nation’s premier refrigerated goods and flatbed haulers.
For Don Decker, the second-generation owner of the company that his uncle Loren founded as a teenager and soon after employed his father, Dale, a primary key to longevity is managing fleet costs.
“We need to keep a firm grasp on what it costs to buy it, run it, fix it, maintain it and fuel it,” says Decker, who has guided the company as its sole proprietor since 1993. “And we need to understand what the residual value is, and how we maximize the value of our ownership.”
“Like the trucks we operate, we don’t want our services to be cookie-cutter either.”
After a recent thorough cost-of-ownership analysis, Decker found the math favored Peterbilt, and last year the firm placed an order for nearly 600 trucks, most of which are Model 579s. The order — the largest in Decker history — represented the strengthening of a relationship with Peterbilt that Decker has enjoyed since 1967.
But not only is the innovative Model 579, paired with a PACCAR MX-13 Engine, new to the Decker fleet — so is an accelerated trade cycle.
Growing with Net
When First Class last visited Decker Truck Line in 2004, Decker made clear that he wasn’t chasing goals measured in gross revenues.
“We’re focusing on maximizing net revenues,” he said then. “It’s called, ‘Making a profit.’”
In the tumultuous economic times since then, that focus has remained, but the means of achieving it have evolved. The recent economic downturn and its construction slump were particularly hard on the flatbed side of Decker’s business. But the refrigerated side of business has grown steadily, and Decker revenues are up to $165 million from $100 million in 2004, and the company-owned fleet is at 755 trucks from 550 over the same period.
The profile of the fleet is also visibly changing. Incoming new equipment is exclusively Peterbilt, which now represents about 65 percent of the overall fleet. Most new Model 579s differ only in their roof fairings to best maximize aerodynamics for flatbed or refrigerated haul. Some new Model 579s have double bunks for training purposes, while the company has also taken delivery on some new Model 587s that have been popular with team drivers and in training operations. A few long-tenured Decker drivers remain partial to traditional styling, and Decker has rewarded their loyalty with several new Model 389s. All the new trucks are equipped with the MX-13 and an automatic transmission.
But whereas new trucks had once typically spent 60 months in the Decker fleet accumulating upwards of 650,000 miles, these new Peterbilts will be traded after 36-42 months with 350,000 to 400,000 miles on them.
According to Don’s son Dale, a company vice-president, the change was a matter of finding the sweet spot in minimizing maintenance costs and maximizing trade value.
“We’re doing a better job of looking at the multiple aspects of our costs,” he says. “And that’s the main reason we’ve shortened our trade cycle, primarily to decrease our maintenance costs but also to take advantage of residual value and advancements in fuel economy technology. Savings in fuel and maintenance outweigh the costs of depreciation, particularly with Peterbilt.”
“And low interest rates help, too,” adds CFO Tim Burns. “But Peterbilt and the dealership team worked really hard to earn our business. They outworked everyone else.”
The average age of the fleet is now down to 1.97 years, Burns notes. And fuel economy for the company’s 2016 Peterbilts is up to 7.32 mpg, a figure he expects their 2017 models to exceed once their break-in period is complete.
Uptime Advantage
But the performance metric the Decker executive team — and their drivers — is most focused on is uptime.
“Drivers like a nice-looking truck and they want the comfort features, the visibility and the nuances, so we try to give them something better than the cookie-cutter fleet trucks that you see out there,” says Dale. “They like the power in the MX-13 and the automatic transmission and the storage space.
“But what they really want is the uptime. They want to get out, make their delivery and get home, so our job is to make sure it runs. That’s what it’s all about.”
To help ensure drivers get home, Decker has spent $5.5 million in a safety initiative that includes factory-installed lane departure warning systems, adaptive cruise and forward collision mitigation systems. Drivers have taken notice — of 384 drivers who had three or more years of service, the company only had to replace 39 last year, and five of those were due to retirement.
The company continues to look to achieve a similar distinction with its service to customers, but Dale Decker notes that it’s a price-driven marketplace.
“The fact is we’re something of a commodity,” he says. “We’re looking harder at some of the niche markets out there, and the opportunities to provide services in markets that not only place a premium on the quality services that help differentiate Decker, but also are in better alignment with our drivers’ desired lifestyles.
“Like the trucks we operate, we don’t want our services to be cookie cutter either. In some of these markets, we’re better able to identify the needs of our customers and hire the right drivers to fill them. And in turn, we can tell those drivers when they’ll be gone, when they’ll be home, and they’ll know days in advance. It’s not, ‘Call me when you’re empty.’
“That’s the battle. As a commodity, everything is price driven, and while we’ve long been able to be quite competitive and successful in those markets, in these niche markets you can build specifically dedicated operations and tailor high-quality services to their needs.”
And that’s a market for which the new, innovative Peterbilt fleet at Decker Truck Line figures to be uniquely suited.