Watkins & Shepard Trucking Inc. (W&S) was founded in 1974 as Stan Watkins Trucking. The company offered truckload, less-than-truckload (LTL) and flatbed services and was headquartered in Missoula, Montana. Watkins & Shepard first built its business hauling loads for the furniture and carpet industries. However, the company soon diversified as its business grew. By 1990, the company hauled as much as 70% of the liquor sold in the state of Montana. The majority of its business was in LTL freight, with its truckload business primarily on backhaul lanes.
By 1992, the company had grown its fleet to 250 drivers and had started adding owner-operators. Between 1994 and 1996, the company payroll increased 50%. Seeking to bolster its workforce, W&S established a driving school, offering a commercial drivers’ license (CDL) in 30 days and employment at the company after a license was acquired.
By 1996, the company had established terminals in 13 states, and by 1999, W&S had grown its payroll to 880 employees, 400 of whom were drivers. The company had also established the Western States Fleet, a specialized fleet for drivers who did not want to travel the continental 48, but wanted to stay only in the West. At that time, the company’s drivers were traveling a total of 47 million miles annually, only 10% of which were inside the state of Montana.
Ups and downs in the 2000s
The new millennium was challenging for truckers nationwide, as insurance rate increases and economic problems caused a number of companies to go out of business. Ray Kuntz, Chairman and Chief Executive Officer of Watkins & Shepard, was part of a lobby to change insurance regulations to ease pressures on trucking companies.
In 2002, W&S caught a lucky break when Consolidated Freightways (CF) went out of business. It was able to pick up a portion of the business CF left behind. That year, Watkins and Shepard had grown to approximately 700 company drivers and 100 owner-operators. In 2005, the company reported it had less than one-third the average industry driver turnover. The company was also talented at recruiting, and received the Commercial Carrier Journal Innovator of the Year Award in 2006 for implementing a financial assistance program in the driving school, recruiting drivers that had been turned down by other driving programs for their inability to pay. In exchange for financial assistance, drivers were offered employment at W&S for two years. The company continued to grow and in 2007 had 1,300 employees and 19 terminals.
However, the economic recession hit hard in 2008, particularly in the housing market. Furniture and carpet were the backbone of the loads that W&S hauled, so its business suffered as well. Rather than admit defeat, the company renewed its focus on recession-proof commodities such as alcohol, and were able to move through the tough financial times easier than many other trucking companies.
Schneider National acquisition… and aftermath
In 2015, Schneider National Inc. began the process of acquiring Watkins & Shepard; it was Schneider’s first acquisition since 2005. The purchase was finalized in 2016. At the time of the acquisition, the W&S fleet consisted of 630 tractors and 1,600 trailers.
When truckload and logistics giant Schneider National acquired Watkins & Shepard Trucking and final-mile and IT provider Lodeso Inc. in June 2016, its management envisioned penetrating the business-to-consumer e-commerce category with a holistic, “first-to-final-mile” shipping service for furniture and carpet orders.
In a rare miscue for Schneider National, the vision died on August 1, 2019 according to a FreightWaves article by Mark Solomon. At that time, Schneider said it would immediately halt the unit’s operations due to results that were “significantly below expectations.” It had struggled despite ongoing investments, including in mid-April when Schneider added middle-mile capabilities to connect the network’s multiple terminals. Schneider also stated that the unit lost $26 million in the first half of 2019 and was on track to lose another $9 million in the third quarter. In the wake of the shutdown, Schneider took pre-tax restructuring charges through the end of the year of $50-$70 million, in addition to a one-time, $34.6 million goodwill impairment charge in the second quarter.
The operation was shuttered before the end of 2019. Prior to the shutdown, Watkins & Shepard had a fleet of 943 trucks, 2,043 trailers and 781 drivers. Solomon reported that W&S was also a key part of almost every furniture retailer’s delivery operation, according to an executive of a furniture e-tailer that had used Watkins for years. It continued to do so after the Schneider acquisition, and then had to search for new sources for 70 to 80% of its delivery traffic.