New Model 567s Mark the Return of Peterbilt Model 567s to the A&R Logistics Fleet
For years, a painted gold ribbon formed the A&R Logistics logo on the sleeper walls of the firm’s Peterbilts, dating back to the original founding of the company in 1970.
And then it didn’t anymore, at least not on a Peterbilt. A sale of the company to a private equity investment firm in 2007 changed many things at A&R. Math that long favored Peterbilt purchases in performance, driver retention metrics and cost-of-ownership analysis was largely eschewed in favor of that which considered only upfront costs, and a number of other truck brands soon represented the well-known pneumatic trailer hauler.
That would be until February of this year, when Peterbilt trucks — Model 567s specifically — remade their debut in the A&R Transport fleet. For company Sr. Vice President Steve Brantley, who has worked out of the company’s Highlands, Texas terminal since 1999, the change back to Peterbilt was the culmination of nearly a decade-long fleet-optimization effort, made easier by new private equity partnership that addressed fleet performance and valuation with an open mind.
“Right up until 2007 we were dominant Peterbilt,” recalls Brantley. “Well, here comes private equity and we started buying some other trucks. And those trucks flopped for us.
“But the vision of some private equity is different than that of other private equity. When a new ownership group took over, I was able to show them the trade values, the market values, the trends, the fact that drivers want to drive a Peterbilt over these other brands — the whole picture.
“Let’s just say we swung a heavy bat. They listened.”
No. 1 dry bulk carrier
Pneumatic trailers loaded with plastic pellets, delivered from ports and rail yards to manufacturing facilities where they’re processed into a wide variety of products, have long been the bread and butter for A&R Transport, which falls under the larger A&R Logistics umbrella. All tallied, the company turned $235 million in 2017 revenues, making it the leading dry bulk carrier in the U.S.
According to Brantley, their customer develops a familiarity and performance expectation out of the driver, who has to perform some specialized tasks in order to safely and efficiently load and unload their cargo.
That fact puts a further premium on ensuring that driver retention is high on the list of Brantley’s priorities — and that’s where the brand of truck they operate comes in.
“When you have driver turnover, it directly affects your ability to do business with your customers,” says Brantley. “We don’t bump a dock, we don’t pull up and wait on a forklift, we don’t wait on a flatbed and throw a chain over the top. Our drivers have to go out and choose their rail car, load from that, pull hoses, and get their weight distributed through that tank to where they can meet DOT requirements.
“These drivers are harder to find. When customers ask us what we are doing about turnover, we have to deal with that through equipment, through pay compensation, etc.
“And the questions the drivers coming in have are one, pay, and two, what kind of truck am I going to be driving?”
CEO Mark Holden, who came on board with new private equity ownership in 2012, was all ears when Brantley outlined his concerns about fleet development and how it affected retention. In fact, Holden went straight to the field to hear things for himself — especially once Brantley produced calculations that showed the training and recruitment costs of seating a new driver neared $7,000 apiece.
“Mark believes we’re all in this together from a recruiting and retention standpoint, and we are,” says Brantley. “So we put out a $10,000 reward for whoever got the most recruits, and that was for anyone from dispatchers to the secretary. Mark was part of that. He put his vest and hat on and got out there talking to drivers. And he came back with stories. The majority of drivers he talked to asked, ‘Do you have Peterbilts? We like to drive Peterbilts.’
“Mark has been able to bring that back to other investors. We have a P&L meeting every two months and Mark often brings that up – ‘Hey, I was out there. I heard it first hand.’”
P&L meetings prove to be an excellent forum for Brantley to point out several additional benefits of Peterbilt ownership. For example, fuel economy metrics show an improvement of .4 to .5 miles per gallon with the new Model 567s. A weight-saving spec ensures A&R trailer payload measures minimally 48,000 lbs. — important given that a rail car carries 192,000 lbs. and can be unloaded by A&R’s Model 567s in exactly four trips. And Brantley anticipates the company will resume realizing 35 to 40 percent better resale values than comparably aged competitors’ equipment.
“Those are the three big R’s for us,” he says. “Recruitment, retention and resale, and fuel and weight help too.
“We have to do everything in our power from equipment to retention and recruiting to stay where we are in the market. It’s a battle out there. Trust me — that Peterbilt oval, we feel that’s a huge advantage for us.”