Overnite Transportation Founder Cochrane, 97, Still Consulted Frequently for His Sage Advice
By Jonathan S. Reiskin, Associate News Editor
This story appears in the Sept. 13 print edition of Transport Topics.
RICHMOND, Va. — People in trucking have long viewed themselves as a collection of hardworking individuals — and there are plenty of stories to support that belief. But who among them has worked harder and longer than J. Harwood Cochrane, founder of the highly successful Overnite Transportation Co. at age 22 and the more middling Highway Express at age 78?
What soul singer James Brown was to show business, Cochrane has been to trucking — the hardest working man in the industry.
Cochrane will turn 98 in November and walks with the assistance of a cane after he broke a hip earlier this year. But he still follows trucking from his spacious apartment in a well-heeled retirement community here, ponders mergers and acquisitions, and offers advice to the president of UPS Freight, Overnite’s successor, at a monthly lunch.
“He’s probably the greatest LTL trucker of us all,” said Earl Congdon, chairman of Old Dominion Freight Line, Thomasville, N.C. “I used Overnite as a pattern for Old Dominion. We tried to do the same thing, but we were 15 to 20 years behind him.”
Cochrane is a thrifty — some say, cheap — man, who grew up in rural poverty, left high school without graduating so he could work, started a business during the Great Depression that is still around, amassed a nine-figure fortune and now has given most of it away to finance causes ranging from the Virginia Museum of Fine Arts to wells that provide drinking water for poor African villages.
His first power unit in freight transportation had just one horsepower, and that horse’s name was Charlie. He pulled Cochrane’s Virginia Dairy milk wagon through the streets of Richmond, the state’s capital city. Early on, Cochrane drove poor-quality trucks because, he said, he couldn’t afford premium vehicles.
He slept in his sleeperless cab, curled up with an oil heater for warmth. Later, he pushed for standardization in tractor and trailer design. He took Overnite public in 1957 and led it onto the New York Stock Exchange five years later. He spent years fighting off Teamsters organizing campaigns and collected judgments against the union.
He sold Overnite, a less-than-truckload carrier, to railroad holding company Union Pacific Corp. in 1986 for $1.2 billion. His truckload venture, Highway Express, didn’t work as well. But when he sold it to Celadon Group in 2003 at age 91, he still had to sign a five-year noncompete agreement.
Cochrane follows trucking and tends to his investments with the help of Nancy Earnhardt, his now part-time secretary, who has worked for him for 52 years.
“I did everything wrong. I bought the wrong trucks, the wrong tires and trailers. I survived on determination and hard work,” Cochrane said as he reviewed his career during a recent interview here. He seems to have learned from his mistakes, though, and the industry’s events have kept his mind active for roughly 80 years.
“I dream of mergers at night,” Cochrane said, adding that he doesn’t want to engineer them but that he naturally tends to speculate on the subject after having pulled off 56 of them during his Overnite years. His current favorite idea involves three regional carriers, all based in the East, forming a triple combination.
“Those three would make a perfect combination, although they’d have to close 50 to 70 terminals,” he said. He has long thought LTL consolidation will continue, he said, until there are only about eight very large carriers left.
Looking at other operations, Cochrane said he thinks Congdon’s Old Dominion is “well run.” On the truckload side, he also respects Heartland Express’ operations but wonders why the stock hasn’t done better lately, especially because Knight Transportation has.
Cochrane’s heart may be in trucking, but as an investor, his head is not.
“I would choose another industry before trucking as an investor,” he said. “If the company isn’t union now, there’s the threat of it.”
C.H. Robinson Worldwide, the nation’s largest freight broker, worries him as a trucker but intrigues him as an investor.
“They really take a high percentage [of the freight bill as a fee], but I’m tempted to buy some stock.”
He also said the Con-way Inc. model of offering large-scale LTL and truckload services has great merit because of the opportunity to cross-sell to a single customer base.
“The two services fit together quite nicely,” he said.
“The first official action I took,” said UPS Freight President Jack Holmes, who has had the job as Cochrane’s successor since 2007, “was to establish a UPS Freight Leadership Hall of Fame. We inducted Leo Suggs, Gordon Mackenzie and Mr. Cochrane.”
Suggs ran Overnite from 1996 to 2006, and Mackenzie was in charge between Suggs and Holmes, in 2006-07.
It was Cochrane’s second Hall of Fame appearance. He was inducted into the Automotive Hall of Fame in Dearborn, Mich., in 1991.
After Cochrane sold his ownership stake to the railroad in 1986, he stayed for four more years as a hired manager. His immediate successor, Union Pacific executive Thomas Boswell, did not get along with him.
“He disliked me with a passion,” Cochrane said.
Boswell asked him to leave in 1990, and Cochrane did. The next year, he started truckload carrier Highway Express. He ran that business for a dozen years until he sold it to Celadon.
“I thought I had lost money on it, but after the final tax return was done, I found that I’d made $2 million. That wasn’t much money relative to all of the revenue involved, but it was nice to know that I didn’t lose anything,” Cochrane recalled.
Holmes said the railroad removed Cochrane’s portrait from the lobby of the company’s headquarters here, “but I put it back up.”
Holmes said he has been talking to Cochrane regularly since 2008, and it’s not just to be polite to an old man.
“As it became obvious the economy was suffering and slipping away in 2008, I had to figure out what would be our approach,” Holmes said. “Harwood Cochrane was the only guy I knew who managed an LTL company through a worse economy. He survived the Great Depression.
“He told me, ‘You have to count every nickel,’ and take control of the expense side. If you don’t take expenses down, he said, the customers will get caught in the middle as the revenue drops.”
“I’ve got very selfish reasons for meeting with him,” Holmes said.
In 1989, Overnite published a biography of Cochrane that tells his life story through the Union Pacific sale. Estelle Sharpe Jackson, who wrote about Cochrane for Virginia Business magazine, provides a useful chronology of his life and some compelling anecdotes.
Cochrane had six siblings who survived to adulthood. For much of his childhood, their mother stayed with the children on a farm outside of town while Cochrane’s father worked construction in Michigan and sent back money. The elder Cochrane died at age 56, when Harwood was 16, shortly before the Depression started.
The first job that he liked was the dairy job, but that was just his day job, according to Jackson’s “Mr. Cochrane’s Overnite.” He and his brother Calvin started Cochrane Transportation in 1933 to move furniture, groups of people and anything else around town.
Success in trucking was not inevitable for the family. The brothers split at the end of 1934, with Harwood starting Overnite in January 1935 and Calvin keeping the name Cochrane Transportation.
The two brothers did not want to compete with each other, Harwood Cochrane said, so he hauled freight in Virginia and North Carolina with nonunion labor, whereas Calvin looked north toward Washington, Baltimore and Philadelphia and worked with unionized employees.
Calvin Cochrane’s company went out of business before 1940, however, and he returned to farming for a living.
Harwood Cochrane said he got his first big break after the 1941 attack on Pearl Harbor, Hawaii. In 1942, he began hauling freight for the Marine Corps from Philadelphia to North Carolina. It was lots of steady business.
The other work that helped to stabilize Overnite in the 1940s and made it profitable and durable was hauling cigarettes, Cochrane said. Philip Morris Inc. and R.J. Reynolds Tobacco Co. were both frequent sources of freight.
Casting about carefully for the right word, Old Dominion’s Congdon called Cochrane “thrifty.” Others, speaking on the condition of anonymity, went straight for “cheap.”
Congdon said Cochrane, like most businessmen in the 1950s, did not like the Korean War-era tax that collected 90% of profits and left only one dime out of every dollar with companies.
“A White Trucks dealer was trying to sell him trucks and emphasized that point,” said Congdon. “Harwood replied, ‘Yes, but I want that dime.’ He was a light tipper. He’d tip 10% when I tipped 15%. But he was also a philanthropist who gave away much of his fortune.”
Cochrane saw enough of life’s difficulties, even at an early age, to know that nothing was easy. There was the poverty of his youth, even before his father died and the Depression started. There was Calvin’s business failure in trucking.
LTL carriers started folding in large numbers in the 1980s because they could not adjust to deregulation. Cochrane bought some of their signs and fastened them to a wall at one of his terminals to remind employees that no one is ever completely safe.
“Hundreds of days could have been my last ones in business,” Cochrane recalled. “I didn’t have money to pay bills.”
He had to learn both ends of the business, finance and operations. He shopped carefully for terminals, often snapping up real estate from failed competitors in exchange for ready cash.
“I always looked at what was available when a company went out of business,” he said. “When you’re going bankrupt, you want money right quick. I had lousy terminals to begin with and wanted better.”
He also prized modern tractors and trailers with easily replaceable parts that could be operated efficiently.
“I’ve seen changes of every size and shape,” he said. “Trailers weren’t easily interchanged when I started. There were different types of fifth wheels, and light connectors usually had to be cut and respliced. There were no uniform fifth wheels and light plugs.”
Cochrane said one of the most important things he ever did for trucking was to get together with management from Yellow Freight System, Roadway Express, Consolidated Freightways and Carolina Freight to urge Fruehauf Trailers to manufacture a standard trailer that all of those carriers would buy.
Cochrane’s committee gave detailed advice on landing gear, fifth wheels, king pins and electrical hookups.
“We got to 97% of a trailer,” he said, before things fell apart, but the work was picked up by others and led to greater standardization.
“It was a great service to the industry, I think.”
As a result of his obsession over operational efficiency, Overnite was one of the industry’s most profitable carriers, often producing operating ratios — expenses as a percentage of revenue — in the 80s, which is considered a sterling measure of financial performance.
An important part of the financial side for Cochrane was his strong bias against unionized labor. Having observed early on that life often can be difficult and that success is never guaranteed, Cochrane knew only one way to run his company: work fiendishly hard as much as you can; give customers whatever they want whenever you can; and make sure your employees work hard, too.
A couple of incidents related to union work rules made up his mind. As related in Jackson’s biography and confirmed in an interview, Cochrane did sign a Teamsters contract in the 1940s because of the Southern Biscuit Co., a major shipper with unionized employees who wouldn’t tend to Cochrane’s trucks because his employees weren’t union members.
Cochrane signed a labor contract, and shortly thereafter, a fight ensued. A local Teamsters leader wanted Cochrane to fire an executive, but Cochrane wouldn’t — because the man in question did not work for Overnite but for another company instead. Picketing and interruptions took place until Cochrane could prove the man worked elsewhere.
“Afterward, they laughed and said I should forgive and forget. I told them I could forgive, but I’d never forget,” he said.
Another time, he was delayed significantly while moving 3,700 pounds of freight at a newly purchased New Orleans terminal because the necessary employee for freight handling was not around and an available employee on site was not allowed to do that job, he said.
Among Cochrane’s memorabilia are two photos of checks from 1963. One, for more than $359,000, was signed by Jimmy Hoffa, the late union president. The other is from liquidating a Teamsters union hall in Charlotte, N.C., to satisfy a judgment against the union in favor of Overnite.
Cochrane said he is not happy that his old company now uses Teamsters union employees. He and Holmes talked about the 2008 switch to representation. Cochrane said he’s concerned that UPS Freight will not be as agile in serving customer needs. Holmes said UPS has been working with the Teamsters union for about 80 years on the package side and that UPS managers know how to work well with Teamsters employees.
Cochrane didn’t just shut out the union by fiat. He convinced his employees to vote against representation elections by providing steady employment, encouraging employees to get their relatives to work for Overnite, providing a well-funded retirement fund, offering stock ownership to employees and taking an interest in their personal lives.
“He engrained a culture into the organization that was family-oriented,” said Leo Suggs, the one-time Overnite boss and now chairman and CEO of Greatwide Logistics Services, Dallas. “After he left [in 1990], it was much less personal. He had the commitment of people in the organization . . . and it was a hardworking group.”
Suggs said he took the lesson on corporate culture to heart and has tried to replicate it with Greatwide. He had not met Cochrane before becoming one of his successors, Suggs said, but he called him up and found him happy to talk.
“He encouraged nepotism. He wanted employees to want their sons and daughters to work there,” Suggs said. “He viewed Overnite as his family, and it was the most successful trucking company in America when he sold it. He loved the company and its employees, and it was mutual.
“He didn’t sit behind his desk in his office. He went out with drivers and dockworkers,” Suggs added. “He learned that mutual respect and a willingness to share was the road map for a successful company. If employees know they have job security and good equipment, they feel better and do more for customers. That makes for better business. It’s a full circle and he reinforced it.”
Cochrane no longer has a company to run. With Earnhardt’s help, he tends to his investments and follows events in trucking. Despite difficulty with his hip, he feeds the ducks at his community pond.
While extremely comfortable, his fortune is much smaller.
“I’ve given away about 75% of my holdings,” he said, and he estimated the value of the cash, stock and real estate given away to be more than $100 million.
His wife, Louise, is a great lover of art, and so he has given $37 million to the Virginia Museum of Fine Arts, including the Louise and Harwood Cochrane Atrium and the Harwood and Louise Cochrane Fund for American Art.
He’s also donated to Baptist groups, the American Red Cross, the University of Richmond and Randolph College in Lynchburg — formerly Randolph-Macon Woman’s College.
Although the poverty of his youth spurred him to great financial success at Overnite, hoarding cash was never the point, Cochrane said.
“I wanted to do things better,” he noted. “It’s not so much that I wanted to be rich, but I wanted better trucks, better tires and better terminal buildings. I always want a way to do something better.”
