St. Johnsbury Trucking was formed by brothers Harry and Milton (Mickey) Zabarksy in 1920 in St. Johnsbury, Vermont. Even earlier (1918), Maurice, the youngest brother, helped their father convert a roadster into a truck and began hauling area farmers’ milk to market.
As the company became more established, Harry and Mickey began hauling farmers’ milk and meat to Boston by truck, while the bulk of these commodities were shipped by rail. The company became a household name in 1927 following one of Vermont’s worst floods. The Zabarksy brothers branched out and hauled mail and household goods to service those affected by the flood after the railroad tracks and trestles had been washed away.
The company began operating as a less-than-truckload (LTL) carrier servicing primarily the northeastern states. In the 1930s, the company’s service area was expanded and it established terminals in Maine and Massachusetts. The Great Depression made business difficult, and things were about to get even worse for the brothers. An untrustworthy employee caused $90,000 of debt. Rather than throw in the towel, the brothers buckled down and were more determined than ever to find new customers and more freight to move. Soon the debt was paid, and the business began to expand.
As the company grew, Harry Zabarsky was the chairman of the company and Mickey Zabarsky was the president. Mickey moved the company’s headquarters to Cambridge, Massachusetts in 1935. He ran the company into the 1960s when his son Martin took over the company.
Things were looking up for the company, and in 1937 and 1938, St. Johnsbury was the recipient of the National Safety Award. By this time, the company operated a fleet of 110 units and had terminals in Maine, Massachusetts, New Hampshire and Vermont. The company was the largest milk hauler in New England. It incorporated in 1946 and went public in 1963.
By the 1960s, St. Johnsbury had expanded its service offerings into Delaware, New Jersey, New York and Pennsylvania. The company’s headquarters was moved again, this time to Holliston, Massachusetts. St. Johnsbury’s fleet had grown considerably by the end of the decade, and included 380 tractors and 780 trailers. The company operated 26 terminals.
St. Johnsbury is acquired
In 1973, Martin Zabarsky sold St. Johnsbury Trucking to Sun Oil Company, ending 53 years of ownership by the founding family. Sun Oil added a number of trucking companies to its corporate portfolio in the early 1970s in an attempt to diversify. However, Sun Oil exited the trucking business and sold St. Johnsbury Trucking Company to Sun Carriers, Inc. in 1986, which was adding a number of trucking companies.
Sun Carriers was a holding company and kept the St. Johnsbury name alive. Following the acquisition, service expanded to include Kentucky, Maryland, Michigan, Ohio, Virginia and West Virginia. Despite difficulties suffered by many trucking companies due to deregulation, business continued to go well for St. Johnsbury. In 1982, the company reported revenues of $159.9 million.
In 1986, a Sun Carriers leveraged buy-out saddled the company with approximately $90 million in debt. This heavy debt load had to be paid down in good times and bad. In 1987, St. Johnsbury reported revenues of $287 million with an operating ratio of 89.4%. By 1990, it had grown to become the eighth-largest carrier in the nation.
In fiscal year 1990, St. Johnsbury listed $322 million in revenue, 66 terminals, 4,542 trucks and trailers. It had 4,638 employees, of which 1,975 were truck drivers. Although the company generated $322 million, had net income of $2.4 million and assets of $169 million, it also was burdened by $111 million in long-term debt.
In 1993, St. Johnsbury operated 54 terminals in a dozen states from Maine to Virginia as well as in Ontario, Canada. Faced with a two-year recession that was particularly difficult in the New England area at the beginning of the decade, the company repeatedly sought help from bondholders, trading larger and larger pieces of equity in return for interest payment restructurings.
Fierce competition between LTL carriers in the northeastern United States and harsh weather that paralyzed the region were also factors in St. Johnsbury’s financial problems.
St. Johnsbury continued to try to restructure, meeting with the International Brotherhood of Teamsters to negotiate workforce and wage cuts to keep the ailing business afloat. The union agreed to a 9% pay cut for workers in exchange for profit-sharing benefits, but it was too little, too late, and it failed to make a significant impact on the company’s financial health.
St. Johnsbury asked to cut the workforce by half, close 24 terminals and replace current benefits with company plans. The union rejected this request outright. An unnamed Teamsters official told local Teamsters members that St. Johnsbury asked for “a broad range of concessions, far beyond what is acceptable under the National Master Freight Agreement,” the governing Teamsters labor-management contract.
“There was no guarantee that any of these steps would stop the bank from moving against the company at any time,” according to a Teamsters communication to its members. “Based on every factor we looked at, including a recent audit of the company’s books by an outside expert, it was clear that their plan had no chance to succeed.”
Dozens of large unionized trucking companies failed following the deregulation of the trucking industry in 1980. Non-unionized companies had lower cost structures, which made them more competitive in the deregulated environment.
The end of St. Johnsbury Trucking
When the announcement of the company’s closing occurred, one Massachusetts Teamsters official said, “It was a shame. St. Johnsbury is a very good company. It was a shame the Teamsters [rank-and-file] did not realize the seriousness of the company’s financial plight.”
Officials cited factors ranging from cut-rate competition to a mid-March snowstorm that paralyzed New England, cutting the company’s cash flow.
The company’s executive secretary, Joyce Hynds, explained the company’s biggest problem was a regional one. “I would cite the deep recession that we suffered in the Northeast as the number one culprit,″ she said.
As company drivers returned from what became their final deliveries, they mourned the carrier’s end. “It’s like being at the wake of a child, everybody walking around not knowing what to do,” said Chuck Durfee, a driver at the company’s North Reading terminal for 24 years. He added, “Our customers have even called to pay condolences.”
Kenneth Simonson, chief economist at the time for the American Trucking Associations, agreed the recession contributed to the difficulties St. Johnsbury faced. But the company also operated in a difficult market segment, he said. “They’re a less-than-truckload carrier,” Simonson said.
“They pick up small shipments and move them through a series of terminals to a final destination.” He said that an LTL costs more to staff and operate than a full-truckload carrier.
In the wake of the recession and a changing industry, the company was caught between unforgiving creditors and a labor force unwilling to make further concessions. In 1992, St. Johnsbury lost $18.9 million on revenue of $290.1 million, compared with a loss of $2.3 million on revenue of $304 million in 1991.
The end of the Holliston, Massachusetts-based trucking company, New England’s oldest and largest trucking company, was set at a final meeting with bankers. St. Johnsbury’s debt was simply too large. “We just ran out of cash,” said one St. Johnsbury official at the time, requesting anonymity. The official added that St. Johnsbury asked for concessions for a Chapter 11 bankruptcy filing, but “our banks wouldn’t go along. It wasn’t our choosing. That’s for sure,” the official said.
The company, with its distinctive red and blue logo on all of its trucks, was a readily recognized name across the country and gave both the town of St. Johnsbury and the state of Vermont national recognition. It was also a major economic engine in the area.
St. Johnsbury, which served all of New England, the mid-Atlantic states, Canada and Europe, was forced to file bankruptcy just a few weeks later. The company closed its doors in June 1993 after 72 years in operation. More than 4,100 people lost their jobs.
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