Federal Express announced on October 6, 1997 that it was acquiring Caliber System, Inc. for about $2.4 billion in stock, expanding FedEx’s ability to compete with package delivery rivals. The acquisition was finalized in January 1998.
Headquartered in Akron, Ohio, Caliber System’s subsidiaries included Roadway Package System Inc., which delivered packages between businesses; Viking Freight Inc., a regional less-than-truckload carrier serving the western U.S.; Caliber Logistics Inc., a contract logistics provider; Caliber Technology Inc., a producer of system-wide information services; and Roberts Express Inc., a critical-shipment carrier.
The focus of this article is Roberts Express, which was rebranded in 2000 as FedEx Custom Critical.
In 1947, Roberts Cartage was founded in Akron, Ohio, after the merger of two Ohio trucking companies, Smith Cartaging Inc. and Roberts Cartage Inc. Roberts Cartage specialized in pickup and delivery of air cargo from airports.
In 1971, Emery Air Freight acquired Roberts Cartage, a pickup and delivery agent for airlines and freight forwarders in northeastern Ohio. However, Roberts Cartage was unprofitable under Emery Air Freight, and in 1976 Emery sold the company to Bill Blodgett, then Emery’s treasurer.
Blodgett expanded the company’s area of operations by securing operating authority for the U.S. and Canada from the Interstate Commerce Commission. That action put the company on a national footing.
Surface expedited freight
When the trucking industry was deregulated by Congress in 1980, Blodgett changed the company’s name from Roberts Cartage to Roberts Express, Inc. It became the first carrier to offer exclusive-use expedited shipping service in 1980. The company specialized in surface expedited freight, a new concept in shipping that bridged the gap between high-cost airfreight and conventional trucking.
In the early 1980s, a major portion of Roberts’ business was transporting time-critical freight for the automotive industry. At that time, auto manufacturers and suppliers were starting the just-in-time inventory system.
In the beginning, expedited shipping was a new concept and difficult to sell to many potential customers. Over time, however, the idea of this specialized shipping method gained acceptance as those same customers realized the value of time-definite and emergency freight.
For most of the 1980s, Roberts Express specialized in critical or fragile shipments needing specialized handling and/or speedy delivery. It was the primary provider of those services in the nation and had an enviable market share, good margins and created the business model that was copied by many similar carriers that entered the market later.
R. Bruce Simpson was a friend of Blodgett and joined Roberts Express as director of sales in 1982. That year, company revenue was the largest in Roberts Express history, exceeding $3.2 million.
In November 1984, Blodgett sold Roberts Express to Roadway Services Inc. (RSI). RSI also acquired Spartan Express, Inc. and Nationwide Carriers, Inc.
Growth continues in the late 1980s and the 1990s
Simpson was named president of Roberts Express in 1988; company revenue topped $70 million. That year, the company began installing Qualcomm, Inc.’s OMNI-TRAC two-way satellite communications system. After the Roberts Express fleet was fully equipped, the number of driver telephone calls to dispatchers dropped by 50% and productivity soared.
The Qualcomm system, modified and customized for Roberts Express, was named Customer Link (C-Link), and was still central to FedEx Custom Critical operations years later.
In 1989, Roberts Express began service to Europe. The Qualcomm on-board communications system was fully operational, and using its satellite tracking, Roberts Express could pinpoint the location of its fleet’s vehicles. In seven years, the company’s revenue increased from $3 million (1982) to $100 million in 1989.
In December 1989, Roberts Express launched its first customer assistance team (CAT). The pilot CAT consisted of seven volunteers – three from operations, three customer service reps and one safety/contractor relations representative. The first CAT was overwhelmingly successful. In just a few months, it increased sales by 8% and increased customer satisfaction by 9%. The morale index rose 29% and overall job satisfaction increased by 10%. Because of the results achieved by the pilot team, management at Roberts Express decided to implement CATs throughout the company. (Similar teams were still being used at FedEx Custom Critical years later.)
The company was the largest expedited freight carrier in North America, delivering shipments nonstop, door-to-door, 24/7/365. Incredibly, more than half of Roberts’ shipments arrived on the same day they were shipped. The company operated a nationwide fleet of 1,000 vans, panel trucks and tractor-trailers dedicated to “critical shipments.”
In an article at that time, Joe Greulich, manager of the company’s management information systems, said, “We’re the ambulance service for industrial freight.” Roberts Express picked up most shipments consigned to it within 90 minutes of receiving a customer’s order. Its on-time delivery rate hovered near 96%.
Roberts Express customers were primarily users of air freight. But when the freight was too heavy to ship by air, Roberts Express was the carrier of choice. Its customer base included manufacturers of parts for assembly lines that might be halted (at great cost) if the parts arrived late, medical instrument suppliers, manufacturers of industrial repair equipment and similar companies.
In a 1989 interview, company president Simpson said, “Our mission statement calls for us to be the best time-sensitive carrier in the nation. I add to that, ‘as perceived by our customers.’”
In March 1990, Roberts Express launched a European subsidiary, Roberts Express, B.V., headquartered in the Netherlands. It offered Roberts’ services in Belgium, France, Germany, Luxembourg and the Netherlands.
CharterAir, an expedited, exclusive-use air charter service owned by Roberts Express, made its maiden flight in 1991.
By 1993, Roberts Express generated revenue in excess of $138 million.
Roadway Systems, Inc. announced that it was spinning off Roadway Express, its principal subsidiary, in August 1995. Roadway Express, which had been unprofitable (and unionized), was spun off as a debt-free company, with its own stock, which was listed on NASDAQ. Its revenues at the time of the spin-off were approximately $2.2 billion, and it served around 500,000 customers worldwide. It was acquired by Yellow Freight (now YRC Worldwide) in 2003.
After the spin-off, Roadway Systems consisted of Roadway Package System, a small-package carrier; Roadway Global Air, a freight package carrier; and a group of small, non-union specialized or regional carriers including Roberts Express and Viking Freight.
In November 1995, Roadway Systems announced that it would change its name to Caliber System, Inc., effective in January 1996.
Prior to the acquisition of Caliber System by FedEx, the Roberts Express fleet of 1,600+ vehicles traveled more than 80 million miles and completed more than 200,000 deliveries. The company’s net revenue topped $200 million.
The legacy of Roberts Express
Roberts Express was the first company to exploit the concept of surface expedited freight (and created the category). It was also the first company to provide time-sensitive cartage of high-value freight by truck.
The company was also among the first to incorporate new computer and satellite technologies into its operations. In a variety of ways, Roberts Express set the standards in the expedited industry through the innovative use of technology and processes that focused on customer service. The company refined the on-time/every-time pick up and safe delivery of customer freight. That became the primary mission of the company and the company pioneered how it was done successfully nearly every time it accepted a customer’s package.
In a span of just over 20 years, Roberts Express grew from Bill Blodgett’s visionary concept (carried out, in part, under Bruce Simpson) to begin the expedited freight segment. Roberts Express remained the segment’s leader throughout its history.