Anderson Trucking Service, Inc. Business Information, Profile, and History

Company Perspectives:

Behind the trucks and the technology there are always THE PEOPLE OF A TS. Our employees are the real reason ATS is such a spectacular opera tion. We attract--and keep--the best, working hard to make ATS a plac e that good talented people want to be. In all honesty we can say tha t Anderson Trucking Service, Inc. employs the very best transportatio n professionals in the world today, whether drivers, office people or mechanics. You want to talk competitive advantage? Our success alway s points back to them.

History of Anderson Trucking Service, Inc.

Anderson Trucking Service, Inc. (ATS), ranked among the top transport ation companies in the United States, is a leader in specialized tran sportation. The company also serves customers in need of wind energy, heavy haul, vans, and pad wrap van transportation. By way of wholly owned subsidiaries and alliances, the Minnesota-based company offers additional shipping solutions, such as international and logistics se rvices. During its anniversary year of 2005, ATS's resources consiste d of more than 1,900 tractors and 3,300 trailers, delivering more tha n 100,000 loads each year.

Roots in the Back Woods: 1920s-40s

Anderson Trucking Service, Inc.'s legacy dates back to a time and pla ce in which horses provided the most reliable pulling power. Elmer An derson contracted with a timber company to haul logs out of the north eastern Minnesota forest during the early days of the 1920s.

He shifted to a different kind of horsepower in 1922, selling his tea ms and buying a used truck. In 1926, Anderson fabricated his first se mi, using Model T parts, and hauled cattle to stockyards in South St. Paul. That same year, Anderson brokered a transportation relationshi p with Cold Spring Granite, building a semi to haul 15-ton blocks out of an Isle, Minnesota, quarry to the railroad right of way. Anderson would also establish a road construction business, a venture grown o ut of the need to keep roads passable from the quarry to the railway, and car and truck dealerships.

In 1935, Elmer Anderson embarked on transporting finished monuments a nd building granite, moving into competition with railroad companies. Elmer's son Harold was behind the wheel by then. Three Anderson unit s provided long-distance service for Cold Spring Granite by 1941.

Harold Anderson enlisted in the Army Air Corps in 1942, eventually fl ying 29 missions. The end of the war with Germany, in 1945, brought t he younger Anderson home to his wife in Isle, Minnesota, and back to his father's trucking enterprise.

Expansion Drive: 1950s-70s

A prolonged illness forced Harold Anderson out from behind the wheel, to a desk in St. Cloud, beginning in 1951. The move would prove pivo tal for the family business, with Anderson envisioning and enacting o n new ideas.

In 1955, the Andersons gained Granite City Transfer's operating autho rity, covering trucking in 20 states. The business incorporated as An derson Trucking Service, Inc. Harold Anderson then convinced competin g granite companies in the St. Cloud area to combine their shipments through ATS, thus gaining an advantage against other regional quarrie s.

In 1957, construction began on a new interstate highway system, a boo n for the trucking industry. The purchase of another operating author ity in 1958 gave ATS entry into new areas of transport, including hea vy machinery and construction equipment, within the states of Minneso ta, Wisconsin, and Iowa.

ATS continued to expand its reach geographically and in terms of the materials it was authorized to handle. In 1959, the company set up it s first out-of-state terminal, in Illinois, to facilitate its growing operation.

Revenues topped $1 million in 1961. The trucking business now ser ved all 48 contiguous states. Sadly, founder Elmer Anderson died in 1 967. A year later, ATS gained an authority to move iron and steel, ma rking the beginning of a significant area of business for the company . In 1969, Harold Anderson bought K&W Transportation, serving the Alaskan pipeline. The transaction was separate from his involvement with ATS. Around the same time Anderson established St. Cloud Truck S ales.

In 1971, Harold Anderson acquired the family's ATS shares. His son Ro llie joined the company in 1972, bringing in data processing expertis e gained in the Air Force.

By the end of the decade, 463 people worked as employees or independe nt contractors for ATS, hauling a variety of specialized loads.

New Rules of the Road: 1980s-90s

The Surface Transportation Act of 1980 moved the industry toward dere gulation, ending operating authorities and producing an explosion of new carriers. ATS responded by ramping up marketing and service and u pgrading its fleet. The wave of deregulation put many trucking compan ies under, but the diversified ATS not only survived, it grew.

In 1983 the company purchased Haupt Contract Carriers, thus establish ing a van division. That same year, ATS began operating its own artic ulated rail cars, a first in the carrier business.

Sureway Transportation Company was established as the ATS Brokerage D ivision in 1989, the year revenues topped $100 million. The ATS f leet consisted of more than 600 power units and 1,500 trailers.

The early 1990s marked expansion of services to the south: Mexico in 1990 and Puerto Rico in 1992. The 1993 purchase of Iowa-based Warren Transport from Federal Express added 450 tractors and 1,500 trailers to the fleet.

Back home in Minnesota, there was as much grumbling about the busines s climate as the weather. Minnesota workers' compensation rates, much higher than surrounding states, drove trucking companies to seek cre ative remedies to cut costs. Some companies began hiring drivers out- of-state through employee leasing operations, allowing them to minimi ze the risk of paying Minnesota rates to injured drivers. Anderson Tr ucking, which employed more than 400 drivers, had stopped hiring in i ts home state during the latter half of the 1980s, shifting hiring an d training to hub states of Wisconsin, Indiana, and North Carolina.

In 1999, ATS produced sales in excess of $250 million and had fou r business divisions.

Harold Anderson, a decorated World War II pilot, reflected on how he had drawn upon his military experience to build the trucking business . "In war, you learn the difference between being a boss and being a leader," Anderson said, according to Sue Halena of the St. Cloud T imes.

Challenges in the 21st Century: 2000-05

Fuel costs, along with job injuries, ranked high on the list of conce rns for trucking firms trying to maintain competitive rates while tur ning a profit. Diesel fuel climbed from about 97 cents a gallon in Ja nuary 1999 to $1.47 a gallon in early February 2000. The high cos t had forced many independent drivers off the road. ATS had begun lev ying a fuel surcharge to customers, but the fee covered loaded miles only. The result was pressure on the company's operating margins.

John Hausalden, president of the Minnesota Trucking Association, told the St. Cloud Times, "I think it's important to note that the diesel price problem comes at a time when the trucking industry is b eing attacked by the government." He explained, "The government wants to reduce the number of hours truckers can drive, and there are new stringent emission standards for sulphur in fuel, which drives down t he efficiency. It's like a triple whammy for truckers to handle."

In response to customer and internal demand, ATS introduced a more so phisticated Internet site in October 2000; a basic site was launched in 1997. Load tracking, its most popular feature, allowed customers t o track shipments and family members to follow their trucker's route.

"The new site also acts as a target marketing campaign in that it ena bles the company to differentiate itself from transportation competit ors, including Warner Transportation, Sioux Falls, S.D., and Trism In c., Kennesaw, Ga. 'We're constantly looking at ways to respond to cus tomers' and drivers' needs--whatever it takes to make it easier and m ore profitable to do business with us,'" Larry Weston, e-commerce man ager for ATS, told B to B. The site had also drawn the interes t of potential employees.

Harold Anderson died in November 2001, at the age of 85. "Harold was really considered one of the pillars of the Minnesota trucking indust ry," the state's Trucking Association's Hausalden said of Anderson. " One of the things that made Harold so respected was that he was willi ng to share what he knew and was willing to help other trucking compa nies get better." Corporate revenues, by that time, had reached nearl y $300 million.

Two years later, revenues stood at $360 million. While the compan y was still headquartered in St. Cloud, other offices were located in Indiana, Iowa, California, Texas, North Carolina, Wisconsin, Florida , Montana, and Puerto Rico.

In an effort to bring more drivers aboard, Anderson began offering si gning bonuses and higher wages. The driver shortage was related in pa rt to the wage scale, nature of the work, and federal minimum age of 21 for drivers, according to a Novem- ber 2004 St. Paul Pioneer Pr ess article. Moreover, the nations' manufacturing downturn during the early years of the 21st century had put scores of trucking compa nies out of business, sending many drivers into other lines of work. The industry also faced new federal hours-of-service rules limiting d riving hours.

Anderson Trucking began work on its new $10 million headquarters in May 2005.

Growth of the city of St. Cloud and the company had limited access to the site established 50 years earlier. The new facility would be twi ce as large as the old, incorporating data and voice systems in compl iance with Homeland Security regulations for transportation businesse s. Stone from Cold Spring Granite quarries was to be incorporated in the building, a bow to the company's roots.

Principal Subsidiaries: ATS Logistics; ICE International.

Principal Competitors: Crete Carrier; Landstar System, Inc.; S chneider National.

Chronology

• Key Dates:
• 1922: Elmer Anderson sells his horses and buys a truck.
• 1926: Anderson forms transportation relationship with Cold Spr ing Granite.
• 1942: Son Harold Anderson leaves job as truck driver to enlist in Army.
• 1951: Illness gives Harold Anderson new perspective.
• 1955: Family business incorporates as Anderson Trucking Servic e, Inc. (ATS).
• 1958: Company attains authorization to begin hauling materials other than granite or stone.
• 1959: First out-of-state terminal is established.
• 1961: Gross revenues top $1 million.
• 1971: Harold Anderson buys family shares of ATS.
• 1980: Surface Transportation Act marks the beginning of increa sed competition for trucking industry.
• 1983: Van division is created with purchase of Haupt Contract Carriers.
• 1991: Company opens sales office in Mexico.
• 1992: New division is created to serve Puerto Rican market.
• 1993: Company purchases Warren Transport.
• 2000: Total ATS revenues reach more than $275 million.
• 2005: ATS celebrates 50 years in business.