Yellow Expands Regional LTL Group
Action will be the third member of Yellow’s regional family, which now consists of WestEx Inc. in Phoenix and Atlanta-based Saia Motor Freight Line.
It is the first addition since Yellow sold Preston Trucking Co. of Preston, Md., a Midwest and Northeast regional carrier, to Preston’s management in July (TT, 7-20-98, p. 4).
At that time, Yellow Chairman A. Maurice Myers signaled his intention to rapidly grow Yellow’s regional trucking business and to participate in other high-growth transportation markets.
Yellow Corp., also in Overland Park, entered the regional trucking market with the purchase of Preston, Saia and Smalley Transportation in 1993. Saia and Smalley were later combined. Johnson’s Freightlines was added in 1994 and expanded under the name WestEx.
The Action acquisition “is consistent with our previously announced strategy to add to our portfolio of regional LTL companies,” Mr. Myers said. “It expands our interregional coverage to 20 states.”
Action serves all points in Idaho, Washington, Oregon, Northern California, Utah, Nevada, Colorado and Texas from a network of 20 terminals. It has about 450 employees and operates a fleet of 205 tractors and 450 trailers.
Action had $40.4 million revenue and $1.7 million operating income in 1997, Yellow said.
Saia’s revenue last year was $311 million, with operating income of $19.6 million; WestEx posted revenue of $49 million with a small operating loss.
Action is owned by brothers Dan and David Fulkerson, who have operated it since 1984. Dan Fulkerson is president and will continue to manage the company, Yellow said. David Fulkerson has not been active in recent years, according to a Yellow spokesman.
In a statement, Dan Fulkerson cited the benefits of Yellow’s marketing, technology and customer service resources for his company. He also said the deal will preserve Action’s “independence” as a regional carrier.
For Yellow, the addition of a Northwest fleet provides opportunities for its other regional carriers to offer interregional services.
We get many customer requests to provide service to Washington, Oregon and Idaho,” said WestEx President Frank Myers, whose company serves the Southwest, California and Colorado.
Kent E. Politsch, manager of corporate communications for Yellow, said the expansion of regional trucking service poses no threat to Yellow’s long-haul trucking operations.
“It enables them to go to regional customers and offer expanded services. Now we can provide interregional hauling and [customers] don’t have to abandon us for companies like USFreightways and Con-Way Transportation Services. That’s who we are really competing with.”
Rosemont, Ill.-based USF owns a group of five regional LTL carriers and Con-Way, which moved its headquarters to Ann Arbor, Mich., last month, operates a three-carrier regional network. Both corporations recently stepped up efforts to capture more interregional freight.
