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Swift Transportation Co., Inc. - Transportation / Trucking -
Category Directory
2200
South 75th Avenue
Phoenix, AZ 85043
(602) 269-9700
www.swifttrans.com
Sales
$2.4
billion
Business Description
Swift Transportation Co., Inc., a Nevada corporation headquartered in
Phoenix, Arizona, is a holding company for the operating corporations named
Swift Transportation Co., Inc. and Swift Transportation Corporation,
(collectively referred to as “Swift”, “we”, “our”, “us” or the “Company”)
which operate the largest fleet of truckload carrier equipment in the United
States combining strong regional operations with a transcontinental van
operation. The principal types of freight we transport include retail and
discount department store merchandise, manufactured goods, paper products,
non-perishable and perishable food, beverages and beverage containers and
building materials. We operate throughout the continental United States,
predominantly in one industry, road transportation, as a truckload motor
carrier and thus have only one single reportable segment.
Operations
We have developed a network of regional terminals and offices strategically
located in areas that have strong and diverse economies and provide access
to key population centers. Our terminal network establishes a local market
presence in the regions we serve and enables us to respond more rapidly to
our customers’ changing requirements. The terminals are located in close
proximity to major customers who provide us with significant freight volume.
To minimize competition with long-haul truckload carriers and railroads, we
operate principally within short-to-medium-haul traffic lanes. With an
average length of haul of less than 600 miles, we are able to limit our
direct competition with railroads, intermodal services and longer-haul, less
specialized truckload carriers. (See further discussion under
“Competition”.) Although our transcontinental division allows us to serve a
broad spectrum of shipper needs, the primary regions in which we operate are
ideally suited to short-to-medium-haul lanes because of the distribution of
population and economic centers. To manage the higher costs and greater
logistical complexity inherent in operating in short-to-medium haul traffic
lanes, we employ sophisticated computerized management control systems to
monitor key aspects of our operations, such as matching availability of
equipment with the transportation needs of our customers, truck
productivity, equipment maintenance and fuel consumption. We have a
significant investment in our computer hardware and utilize state-of-the-art
software specially designed for the trucking industry. Customer Service
professionals monitor the location and delivery schedules of all shipments
and equipment to coordinate routes and maximize equipment utilization. Our
computer system provides immediate access to current information regarding
driver and equipment status and location, specific load and equipment
instructions, routing and dispatching.
We focus on achieving constant availability for service-sensitive customers
in short-to-medium haul traffic lanes that regularly ship over established
routes within our regional service areas. We seek to provide premium service
with commensurate rates, rather than compete primarily on the basis of
price. This regional network also enables us to enhance driver recruitment
and retention by regularly returning drivers to their homes, reducing our
purchases of higher priced fuel at truck stops and expediting lower cost,
in-house equipment maintenance. The principal elements of our premium
service include: regional terminals to facilitate single and multiple
pick-ups and deliveries and maintain local contact with customers;
well-maintained, late model equipment that enhances on-time deliveries and
driver satisfaction; a fully-integrated computer system to monitor shipment
status and variations from schedule; an onboard communications system that
enables us to dispatch and monitor traffic; timely deliveries; specialized
equipment, such as high cubic capacity trailers, to respond promptly to
customers’ varying requirements; multiple drops, appointment pick-ups and
deliveries; assistance in loading and unloading; and extra trailers that can
be placed for the convenience of our customers at their shipping locations.
The achievement of significant regular freight volumes on high-density
routes and maintaining consistent shipment scheduling over these routes are
key elements of our operations. As a result, our operations personnel are
better able to match available equipment to available loads and schedule
regular maintenance and fueling at our terminals, thereby enhancing
productivity and asset utilization and minimizing empty miles and expensive
over-the-road fueling and repair costs. Consistent scheduling also allows us
to be more responsive to our customers’ needs. Our regular scheduling and
relatively short length of haul enable drivers to regularly return to their
homes, which helps us with driver recruitment and retention.
Major shippers continue to reduce the number of carriers they use for their
regular freight needs. This has resulted in a relatively small number of
financially stable “core carriers” and has contributed to consolidation in
the truckload industry. Nevertheless, the truckload industry remains highly
fragmented, and we believe that overall growth in the truckload industry and
continued industry consolidation will present opportunities for
well-managed, financially stable carriers like us to expand.
In addition to expanding our services to existing customers, we actively
pursue new traffic commitments from high volume, financially stable shippers
for whom we have not previously provided services. Furthermore, a number of
large companies maintain their own private trucking fleets to facilitate
distribution of their products. In order to reduce operating costs
associated with private fleets, a number of large companies periodically
evaluate the opportunity to outsource their transportation and logistics
requirements. We believe our strong regional operations and average length
of haul of less than 600 miles position allows us to take advantage of this
trend. We already serve as a preferred supplier, or “core carrier” for many
major shippers who are considering, or may in the future consider,
outsourcing their private fleet transportation and logistics requirements.
We intend to take advantage of growth opportunities through a combination of
internal growth and selective acquisitions. We generally limit our
consideration of acquisitions to those we believe will be accretive to
earnings within six months and produce a double-digit internal rate of
return on investment.
In addition to the domestic operations described above, we have a growing
cross border operation into Mexico that primarily ships through commercial
border crossings from Laredo, Texas westward to California. In 2000, we
augmented our cross border operation by acquiring 49% of Trans-Mex, a
carrier that focuses on shipments to and from Mexico and we purchased the
remaining 51% in January 2004. For additional information regarding our
purchase of the remaining interest in Trans-Mex as well as our guarantees of
certain Trans-Mex obligations, see the Notes to Consolidated Financial
Statements.
In April 2000, together with five other publicly traded truckload carriers,
we founded Transplace, LLC, an Internet-based transportation logistics
company. We contributed our transportation logistics business and associated
intangible assets to Transplace.com upon its formation. Our interest in
Transplace.com is approximately 29%, reflecting both our initial investment
and that held by out subsidiary, M.S. Carriers. We report our equity
interest in Transplace.com and our share of the profits and losses of
Transplace.com in our consolidated financial statements using the equity
method of accounting. See the Notes to Consolidated Financial Statements.
As a transportation logistics company, Transplace matches shippers with
trucking companies and receives a fee for this service. We may receive from
Transplace the opportunity to provide transportation services to shippers.
In addition, we may utilize Transplace to assist in obtaining additional
capacity from other trucking companies for our customers.
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