Nowhere to Go But Up: Celadon chief to Truck World group

TORONTO — When Steve Russell was a teenager growing up in Brooklyn, N.Y., he saw an Audi Murphy movie called “To Hell and Back.”

Now some 50 years later, he says that the title pretty much sums up the state of the North American trucking industry… except for the “And Back” part.

The first part, he says, still applies, and he’s never seen anything like it.

Russell is the Chairman and CEO of Celadon, an international operation with about 2,900 tractors, 8,100 trailers and 3,600 employees operating in the U.S., Mexico and Canada. (It has an independently-run Canadian office in Kitchener, Ont.).

His presentation Thursday morning kicked off Truck World 2008 at Toronto’s International Centre.

Founded in 1985, the name Celadon (NASDAQ: CLDN) was, according to Russell, one of the prettiest words in the English language. Now, almost 35 years later, the company is still attractive and growing –Celadon purchased six companies in five years — but the global economy is not making things very easy.

The true test of a good business person is one
who can turn a liability into an asset, says Russell.

In 2002, Celadon revenues topped $300-million. Five years later, they were over the half-billion-dollar mark. However, in 2002, about 45 percent of his business was automotive. Now, that’s more like five percent.

That, Russell said, is an indication of how much things have changed in a very short time.

Similarly, he said, rate per loaded mile dropped from $1.546 in ’06 to $1.499 a year later; dead heads were up almost half a percent year over year; and annual miles per truck dropped by about 300 between ’07 and ’06.

The bleakness continued. Fuel prices are soaring, housing starts are weak and customers are taking longer to pay bills. And that, especially with the sharp price increases that come almost daily, takes a bigger toll than it would in the days of consistent fuel prices.

Since 2001, Russell says he estimates diesel has gone up by 329 percent and if a truck travels about 120,000 miles a year, that means the operator’s fuel cost is up by $56,200 per truck.

“I’ve seen the world change a lot,” he told the crowd of Truck Show attendees. “I’ve been around 68 years. And I’ve never seen it like this.”

That said, shrinking truck capacity because of fewer trucks coming off assembly lines and more demand for trucks abroad is having a bright side. “We’re seeing,” he reassured the crowd, “rates stop going down.”

Auto freight went from 45% of
Celadon business in ’05 to 5% today.

It was a sentiment echoed by Canadian Trucking Alliance (CTA) President David Bradley, who commented afterward that he gets the sense that “we have reached bottom.

“We can only hope now that because the U.S. has admitted that they’re in a recession, we can get on with life and the capacity situation that we did enjoy is returning, soon.”

Finally, instead of offering the assembled show-goers a quick solution out of whatever economic quagmires they were facing, the very engaging Mr. Russell served up his Six Self-Conceived Business Mantras:

6) Don’t get ulcers; give them.

5) L-I-D-S, which stands for Leadership, Intelligence, Dedication and Street Sense.

4) People act in their own self-interest. (“As Warren Buffett says, ‘If you want someone to trust in business, get a dog.)

3) The true test of a good business person is one who can turn a liability into an asset.

2) “It’s not whether you are making good or bad decisions, it’s what are the priority issues upon which you should be making decisions.

1) To be happy, one needs to (think) “Can’t wait to get to work in the morning” and “can’t wait to get home at night.”

Truck World — owned and operated by this website’s parent, Newcom Business Media — runs Friday from 10:00 until 6:00 p.m and Saturday from 9:00 a.m to 5:00 p.m.