Known primarily on northeastern and midwestern highways by its iconic orange and white trucks, Preston Trucking Co. (The 151 Line) was founded in 1932 in the Chesapeake Bay town of Preston, Maryland. The company was started by a canned goods wholesaler, Albert W. Sisk and his sons, who had difficulty shipping small amounts of their products via rail routes. A.T. Blades, one of the company’s accountants, suggested that the company start its own small transportation division.
With a $500 loan from his employer, Blades was put in charge of the small endeavor. At first, Preston Trucking Co. transported produce from farms on Maryland’s Eastern Shore to cities across the Chesapeake Bay. The small, irregular loads that Preston (and many other carriers) transported would later be known as “less-than-truckload,” or “LTL.”
ICC regulation does not stop growth
Growth at that time was not easy, in part because the Interstate Commerce Commission (ICC) began regulating interstate trucking in 1935. The ICC implemented regulations governing trucking companies, restricting them to mandated routes with fixed rates. However, despite the economic challenges presented by the ICC and the Great Depression, in 1936 Preston Trucking opened its own offices and acquired its motto: “151 pieces of equipment to serve you.” By 1942, the company was able to pay the first cash dividend on its stock.
The ongoing ICC restrictions made growth a challenge for many trucking companies. Since routes and rates were regulated by the ICC, acquisition was the best way to extend a trucking company’s reach. Growth was a challenge that Preston handled readily. In the 1950s, 1960s and 1970s, steady growth defined the company. Preston acquired other trucking companies and grew the areas it could serve.
For example, in 1968, Preston acquired the O.K. Heilman Trucking Company and extended its service area to northwestern Pennsylvania and Ohio. In 1973, the company acquired Kirby Transfer and Storage, as well as the American Transfer Company. In 1974, Preston acquired the operating rights of Export S/D/Z, as well as the Southern Maryland Transportation Company, further expanding its routes and areas of service. However, its biggest acquisition occurred in September 1975, when it acquired Shippers Dispatch. Based in South Bend, Indiana, this acquisition doubled Preston’s service area. Preston could now service Illinois, Indiana, Michigan, Missouri and Ohio. This acquisition made Preston the 20th-largest carrier in the United States, boasting revenues of more than $100 million annually.
However, growth is just one way to measure a company’s success, and Preston Trucking faced difficulties that could not be mended by an acquisition. In 1972, the company was charged by the Equal Employment Opportunity Commission (EEOC) for discriminatory hiring practices. The EEOC claimed that Preston discriminated against women and people of color by using unfair tests and discriminatory wording in its help wanted advertisements that dissuaded both women and people of color from applying or being hired. The Commission also asserted that Preston Trucking discriminated during promotion and transfer practices.
Preston also faced union-related issues. In 1978, conflict between supervisors and employees had reached a fever pitch. A one-man wildcat strike occurred in Detroit, leading to a slow-down and lock-out of two-thirds of the Detroit terminal’s employees.
Growth continues during the first decade of deregulation
Trucking deregulation was coming, and Preston Trucking’s management knew that the company wouldn’t survive without mending fences between supervisors and employees. In 1979, Preston hired a management consulting firm to survey employees in Michigan, New York and Pennsylvania to gauge their sentiment toward their supervisors and working conditions. Following the results, Preston Trucking began empowering its workers and reorganized the company’s titles and structures to increase employee satisfaction.
Deregulation of the trucking industry occurred in 1980. While other companies faltered or barely survived, Preston Trucking thrived. That same year, the company formed a subsidiary, Pioneer Transportation Systems, to break into the full truckload industry. Preston recorded a profit of $5.26 million that year. Deregulation gave Preston Trucking the freedom to expand its reach even further, and it added service to California and Nevada. The company also began shipping goods to the Caribbean and Puerto Rico under the name Velero and added a new service, named Transocean, to connect its business interests with Europe. At this point, Preston had 78 freight terminals and 4,000 employees.
By 1983, Preston had further improved employee morale by implementing the industry’s first system of bonuses for employees meeting productivity goals. Finally, in 1983, Preston Trucking set up a holding company, Preston Corporation, Inc., to be the parent of Preston Trucking and any further acquisitions.
The 1980s saw continued growth as Preston continued its pattern of aggressive acquisitions. It acquired Bowie Hall Trucking, Saia Motor Freight Line, Carpet Services Inc. and four affiliated companies between 1984 and 1987. Never able to keep controversy completely at bay, however, the company’s reputation suffered during these otherwise good years when it attempted to regulate its health insurance costs by refusing to provide healthcare benefits for employees diagnosed with or suffering from AIDS.
Difficulties during the 90s snowballed
The 1990s proved to be more challenging than Preston could withstand. Consolidation of subsidiaries, originally intended to ward off any unwanted purchase overtures, proved more costly than predicted. Bowie Hall Trucking and Pioneer Transportation Company were consolidated in 1990 but could not outrun falling revenues and shrinking profit margins. Late that year, Preston shut down operations of its Pioneer Transportation subsidiary and the company sold CSI Reeves to U.S. Xpress Enterprises (NYSE: USX).
USX merged CSI Reeves with US Xpress’ LTL carpet division, Crown Transportation Systems. In the mid-2000s CSI Crown became Xpress Global Systems, Inc. and remained part of U.S. Xpress until 2015, when the truckload carrier divested it in a sale to a private equity group.
In 1991, Preston had to rein in the operations of its long-haul subsidiary, Smalley Transportation, as well. Despite the various reorganization attempts undertaken by its management, Preston ended 1991 in the red once more.
Though the company made small gains in income after raising its rates in 1992, the company simply couldn’t outrun the hole it had been steadily digging. In 1993, Yellow Corp., one of the largest U.S. trucking companies at the time, purchased Preston. But five years later, it was dissatisfied with the carrier’s sales and sold it to a group of Preston managers.
”Yellow really went out of its way to ensure that Preston had a bright future,” a Merrill Lynch analyst said. ”Yellow forgave $89 million of intra-company debt and even wrote down some assets so Preston’s depreciation base would be lower.”
For a few months after its spinoff, Preston was operating fairly well. But Preston’s operating condition deteriorated; it may have been in violation of some bank covenants. Although Preston was virtually debt-free, this bank covenants issue is what may have led to Preston’s financing being in jeopardy.
A sad ending for another trucking company
Unfortunately, after just a year under its new ownership, Preston’s financial situation continued to deteriorate. Company managers said it lost sales in 1998-99 and was unable to recuperate. The end of the line came in 1999, when Preston shut down operations completely, stating simply that the company did not have enough money to keep up with its bills.
“On Saturday, July 24,  we were informed that our current lenders would not make additional advances that would have permitted our continuing business operations,” said Sean Callahan, the company’s chief financial officer. “Vigorous attempts to obtain financing from other sources have been unsuccessful.”
Preston shut down abruptly on Monday, July 26, apparently with little notice to its shipper customers. Callers to the unionized carrier’s customer service number heard a recorded message that said: ”It is with great sorrow and regret that Preston Trucking will cease operations effective Monday, July 26, 1999. We will make no further pickups, but all freight in our system will be delivered this week.”
Closely held Preston had about $450 million in sales in 1998, but it faced growing competition in its primary northeastern and midwestern markets. Carriers such as New Penn Motor Express and Old Dominion Freight Line were focusing on Preston’s customers. Additionally, larger carriers like American Freightways Corp. were also seeking to win over Preston customers.
From 1932 to 1999, Preston grew to become one of the best- known LTL carriers in the Northeast and Midwest. At its peak, Preston hauled freight from Maine to North Carolina, west to Minneapolis and north into Ontario and Quebec.
When it closed, Preston Trucking had about 5,000 employees who lost their jobs. About 3,800 of those employees were members of the International Brotherhood of Teamsters according to the union.