• DATVF.ATLPHL
    1.770
    0.010
    0.6%
  • DATVF.CHIATL
    2.016
    -0.133
    -6.2%
  • DATVF.DALLAX
    0.850
    -0.099
    -10.4%
  • DATVF.LAXDAL
    1.594
    0.002
    0.1%
  • DATVF.SEALAX
    1.015
    -0.022
    -2.1%
  • DATVF.PHLCHI
    1.129
    -0.026
    -2.3%
  • DATVF.LAXSEA
    2.150
    0.001
    0%
  • DATVF.VEU
    1.638
    -0.050
    -3%
  • DATVF.VNU
    1.481
    -0.036
    -2.4%
  • DATVF.VSU
    1.222
    -0.049
    -3.9%
  • DATVF.VWU
    1.582
    -0.011
    -0.7%
  • ITVI.USA
    9,697.950
    -63.310
    -0.6%
  • OTRI.USA
    7.710
    0.190
    2.5%
  • OTVI.USA
    9,690.610
    -70.020
    -0.7%
  • TLT.USA
    2.720
    0.030
    1.1%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
  • DATVF.ATLPHL
    1.770
    0.010
    0.6%
  • DATVF.CHIATL
    2.016
    -0.133
    -6.2%
  • DATVF.DALLAX
    0.850
    -0.099
    -10.4%
  • DATVF.LAXDAL
    1.594
    0.002
    0.1%
  • DATVF.SEALAX
    1.015
    -0.022
    -2.1%
  • DATVF.PHLCHI
    1.129
    -0.026
    -2.3%
  • DATVF.LAXSEA
    2.150
    0.001
    0%
  • DATVF.VEU
    1.638
    -0.050
    -3%
  • DATVF.VNU
    1.481
    -0.036
    -2.4%
  • DATVF.VSU
    1.222
    -0.049
    -3.9%
  • DATVF.VWU
    1.582
    -0.011
    -0.7%
  • ITVI.USA
    9,697.950
    -63.310
    -0.6%
  • OTRI.USA
    7.710
    0.190
    2.5%
  • OTVI.USA
    9,690.610
    -70.020
    -0.7%
  • TLT.USA
    2.720
    0.030
    1.1%
  • WAIT.USA
    156.000
    -2.000
    -1.3%
ContainerLess than TruckloadOnline Haul of FameTrucking

Online Haul of Fame: McLean Trucking

This is part of our ongoing weekly feature called the “Online Haul of Fame.”  FreightWaves will feature companies that have had a lasting impact on the trucking industry, past or present. Check out the Online Haul of Fame series posted each Friday on FreightWaves. 

McLean Trucking is one of the pioneers of the less-than-truckload (LTL) trucking industry. The company’s founder eventually became one of the pioneers of the global logistics and trade industry.

At one point, McLean Trucking was the fourth-largest motor carrier in the United States. The company was founded in 1934 in Raleigh, North Carolina by Malcom McLean. Eventually, the company’s headquarters moved to Winston-Salem, North Carolina, in an effort to be closer to one of McLean’s largest customers. McLean would come to be known as one of the pioneers of less-than-truckload (LTL) shipping.

For the first decades of McLean’s operation, the Interstate Commerce Commission was still regulating routes and rates for all trucking companies. Because of this, a large part of McLean’s history and growth came from acquisitions. The 1945 acquisition of American Trucking Co. was the first of these. Other notable acquisitions in the 1940s included Pee Dee Express in 1947 and Simpson Motor Lines in 1948. McLean’s first service area was essentially a straight line between points in North Carolina and a small area in the Northeast and southern New England. After World War II, the company began expansion into more areas in the Northeast and pushed into more markets in the South. In the 1950s, McLean focused on expansion into the Midwest. This was achieved by the company’s acquisition of Carolina Motor Express Lines in 1952. 

What happened next will be one of the biggest moments in the history of modern capitalism and trade. Malcom McLean, the father of the standardized freight container, dreamed of creating an intermodal network. FreightWaves’ Managing Editor of Copy, Scott Mall, covered the history of the “Box” in 2019: 

In 1952, Malcom McLean’s original idea was to create a standard-size trailer that could be loaded onto ships. He thought he could improve his business by taking his trucks off the ICC-controlled roads and move them by ship along the Atlantic Coast. He planned to move them from the company’s base in North Carolina to New York, with trucking hubs co-located with strategic ports. This would mean his trucking fleet would be used only for shorter, intrastate deliveries, which would fall outside the ICC’s jurisdiction.

However, he realized that the original concept of “trailer ships” would not be very efficient. Only a certain number of trailers would fit on a ship, and other cargo space on board a vessel would be wasted. McLean modified his idea so that only the containers, not the chassis, would be loaded onto a ship. The concept of a trailer ship became the “container ship” or “box ship.”

During that time period, U.S. law did not allow a trucking company to own a shipping line. McLean believed in his idea of a standardized shipping trailer or container. Undaunted, he sold McLean Trucking for approximately $6 million and began a new company, McLean Industries.

McLean Trucking continued to operate as a stand-alone company, growing along with the U.S. economy. The company thrived for almost two decades, but the fortunes of McLean Trucking changed in the 1970s. The U.S. and global economy became subject to an OPEC oil embargo in 1973. Over six months, oil prices quadrupled. The cost of fuel dramatically increased the operating cost of trucking companies. The oil embargo ended in 1974 and oil prices receded, albeit at higher levels than pre embargo levels. 

A few years later, in 1979, a nationwide Teamsters strike and an industry-wide lock-out completely halted all McLean operations for 12 days. At that point, it was the longest national Teamsters strike in history, and profits took a considerable hit as freight sat motionless at company terminals. In 1979, McLean reported revenues of over $483 million, but only recorded profits of $8 million. This was compared to the previous year when McLean brought in nearly $440 million in gross revenue and $15.5 million in net profits. McLean executives were aware that deregulation was coming, and braced themselves for the change.

Though McLean’s operating revenues increased 30% to $725 million in 1980, the company dealt with several other financial challenges. The relaxation of regulations by the ICC with the passage of the Motor Carrier Act created a serious imbalance in McLean’s operations, causing an increase in empty miles and loss of revenues. New entrants into the market increased competition, and rate-cutting was prevalent across the industry. These factors led to a net loss of over $2 million for McLean in 1980. Unwilling to give up, McLean Trucking continued efforts to adapt to the new environment, and opened 10 new terminals that year. In 1980, McLean was the fourth-largest Class 1 motor freight common carrier of general commodities in the United States. The company employed 13,000, served 42 states and Washington, D.C. from 206 terminals  as well as the Canadian province of British Columbia. 

The company lost $12.4 million in 1982 and could not find a way to recover. In 1983, the company lost $35.2 million, and the following year, $39 million. So loved was the company that in 1985, employees took a 15% pay cut in order to keep the struggling company afloat. Unfortunately, it was too far gone. In 1986, the company filed for bankruptcy, and approximately 10,000 people lost their jobs.

At its largest, McLean operated approximately 3,800 tractors and 9,600 trailers out of its 300 terminals in 45 states. 

FreightWaves take: McLean Trucking’s legacy is more about the evolution of the freight market throughout the 20th century and less about the trucking company itself.

Most pre-deregulation carriers, especially unionized ones, suffered greatly in a post-deregulation world. The fact that McLean was among these is not surprising. Most unionized carriers that enjoyed rent seeking could not survive in a world where non-regulated market forces took control of the freight market. 

Before deregulation, trucking firms and their employees thrived, often at the cost of the shipping community and public. Shippers paid much higher rates and suffered from inconsistent and slow services compared to today’s trucking environment. They were often left at the mercy of trucking monopolies that owned specific lanes. 

It is likely that Amazon and e-commerce wouldn’t be around in a regulated freight market. We also wouldn’t have modern freight brokerages or dynamic load matching. 

McLean’s legacy, however, is not just about trucking. The company’s founder, Malcom McLean., will go down as the most influential figure in logistics history, having created the first intermodal container network. The intermodal company he founded, Sea-Land, was inspired by his successes and frustrations of being a trucking CEO and a vision to create far more efficient way of delivering global trade. 

McLean also had a vision for making the world a better place. In an American Shipper story, written by Chris Dupin back in 2012, he quotes a Sea-Land executive in saying the most important decision Malcom McLean ever made was “to give up all the patents, the hundreds of patents that Sea-Land had on the container system.”

The executive further stated, “He decided it was better to give up those patents and grow the industry rather than keep them as a proprietary item. He saw that if he gave up the patents and it became universal, we would have intermodal trade, and we would have something that was good for the customer… Intermodalism prospered and so did Sea-Land,” he said.

Each Friday, we will post another article from our Haul of Fame series. Check FreightWaves each week as we feature other legendary companies from our industry, past and present.

Other Haul of Fame coverage:

Builder’s Transport

Consolidated Freightways




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Craig Fuller, CEO at FreightWaves

Craig Fuller is CEO and Founder of FreightWaves, the only freight-focused organization that delivers a complete and comprehensive view of the freight and logistics market. FreightWaves’ news, content, market data, insights, analytics, innovative engagement and risk management tools are unprecedented and unmatched in the industry. Prior to founding FreightWaves, Fuller was the founder and CEO of TransCard, a fleet payment processor that was sold to US Bank. He also is a trucking industry veteran, having founded and managed the Xpress Direct division of US Xpress Enterprises, the largest provider of on-demand trucking services in North America.

8 Comments

  1. The highly regulated nature of the trucking industry at the time had much to do with the transport philosophy Malcom adopted early in his career and that would be a trademark for the rest of his life. Malcom quickly recognized that to win over new customers you had to offer a lower rate. The regulators however would only let you do that if you could show you had lower costs. In those days, the regulators in effect stopped freight people from pricing below full cost. That resulted in Malcom’s laser focus in reducing costs. He was the first trucker to embrace diesel engines in tractors. While the industry complained about acceleration problems with diesel engines, he was focused on the extraordinary cost per mile advantage it was giving him. Malcom poured over the detailed financial statements that all trucking companies then filed with the ICC, looking into and copying what the best companies were doing to lower costs in various areas. He told me that in the early years he was hoping that other companies weren’t looking into his fuel costs numbers as close as he was looking into everybody’s numbers but eventually the cost advantages of diesel became clear to the entire industry. In another example of minimizing the key fuel cost component, he had his trailers manufactured with a corrugated wave pattern in the outside panels to reduce air resistance based on an engineering study by the University of North Carolina. That was a type of innovation that was decades ahead of when trucking companies routinely had various foils to reduce air resistance. Malcom instituted one of the first fuel purchase programs which allowed him to get discounts by concentrating his purchases at certain stations. He also started the first management training program in the trucking industry where young college graduates came in and were rotated thru various operating areas prior to being given sales assignments where they followed a prescribed way of pitching analytical comparisons of the savings that would come from using McLean Trucking. As a former truck driver himself, Malcom recognized the key importance of getting good drivers and incentivizing them. One method he used to get who he thought would be good and stable drivers was to have his recruiters spend time in coffee shops popular with truck drivers. They would approach the drivers who were calm and polite and avoid the drivers who were loud and bellicose. Among the incentives Malcom put in place was to have a new house constructed on a road that approached his main terminal in Winston-Salem that drivers would always see. At the beginning of the year, he announced that the driver with the best safety record would be given that house at the end of the year. With what was already among the best safety records in the industry, not surprisingly it improved further to lead the industry that year. These are just a few examples of Malcom’s focus on costs in his earlier trucking days. With that total focus, its not surprising that it would eventually lead to the development of containerization which was just an extension of his core goal of moving something from point A to point B for the lowest overall cost.

  2. Amazing company and man. Absolutely love these posts. Please keep them coming.

    As much as I love the old history as my family’s history within transportation goes back to the 1910’s – I love the pictures of the old equipment. I really appreciate that FW adds those to the article. Great to see.

  3. Worked for them , when Reagan deregulated the industry. Came in on Friday found out we lost are jobs Monday morning when the gates were locked . Didn’t give us any notice we were going to lose are jobs. Sorry for his family.

  4. Always appreciate the history of an industry. History may not repeat but it often rhymes. Appreciate this! Hopefully they can get ahold of the big jefe Royal Jones the quiet king of the Industry.

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