18 DC VELOCITY APRIL 2018 www.dcvelocity.com
newsworthy
Congdon to leave Old Dominion CEO post after decade
of historic outperformance
David S. Congdon wasn’t exactly dealt an ace-high hand
when he became chief executive officer (CEO) in January
2008 of the less-than-truckload (LTL) carrier that his
grandparents founded 74 years before.
The company, Old Dominion Freight Line Inc., was
doing OK. But the macro environment was crumbling
around it. A freight recession had been under way for two
years. The financial pillars of the U.S. economy were starting to crack, leading to a full-blown financial crisis and
the worst recession in 70 years. The LTL industry, already
hammered by the freight downturn, would face indigenous
turmoil during 2009 and 2010, as vicious rate wars broke
out over grabs for market share and a concerted effort by
other carriers to drive the ailing YRC Worldwide Inc., then
the market leader by size, out of business.
Through the maelstrom, Congdon and Old Dominion
stood firm. It would not jump into the rate-cutting ditch
with others. It kept pricing relatively firm, and when the
economy and freight demand improved, it would not raise
rates before it saw what others had done. When it finally
did, it brought up prices to levels below its rivals’ rates.
Most important, Congdon and Old Dominion tuned out
the noise and focused on the daily blocking and tackling
that wins and keeps shipper and third-party logistics service
provider (3PL) business: reliable, damage-free deliveries at
rates that the marketplace deemed fair and reasonable. In
the process, a virtuous cycle was created where shippers
sought to associate with the carrier perceived as providing
the gold standard of service.
Thomasville, N.C.-based Old Dominion said March 9
that Congdon, 60, would step down as CEO May 16 to
become executive chairman, a position currently held by
his father, Earl, who will then become senior executive
chairman. Greg C. Gantt, Old Dominion’s president, will
add the CEO’s title at that time.
STELLAR PERFORMANCE
Congdon leaves with an enviable track record. In 2007,
Old Dominion posted revenue of $1.4 billion, operating
income of $129 million, and net income of $71.8 million.
In 2017, the company reported $3.35 billion in revenue,
operating income of $575 million, and net income of $463
million, the latter a remarkable increase of well over sixfold in just a decade.
Old Dominion’s operating ratio—the ratio of expenses
to revenues and a key metric of operating efficiency and
profitability—fell more than 800 basis points, to 82.9 percent, during Congdon’s tenure, a sterling record given the
complexity of synchronizing a national LTL network with
dozens of terminals and multiple handoffs.
The company’s performance has been reflected in the
soaring value of its equity. Old Dominion shares, which
on Jan. 1, 2008, traded at $12.96 a share (adjusted for three
stock splits), closed at $147.59 a share on the day of the
announcement. These are gains, in percentage terms, usually associated with a high-flying IT (information technology) company instead of a well-established trucker.
Bradley S. Jacobs, chairman and CEO of Greenwich,
Conn.-based transport and logistics service provider XPO
Logistics Inc., which acquired LTL and logistics giant Conway Inc. in 2015, said that Congdon “created the benchmark [that] we measure our LTL performance against.”
C. Thomas Barnes, who ran Con-way’s multimodal
transport unit earlier in the decade and today is president
of project44, a Chicago-based logistics IT concern, said
Old Dominion’s operations were in good shape when
Congdon became CEO. What Congdon brought was “more
focused leadership,” Barnes said. Today, Old Dominion’s
yield-management practices are considered second to none,
and it is widely regarded as the best among trucking firms
in understanding its cost structure.
The elevation of Gantt marks the second time in less than
two years that a big trucking concern with generations of
family leadership has gone outside the bloodline. In May
2016, Omaha, Neb.-based Werner Enterprises Inc. tapped
Derek J. Leathers as CEO, ending a 60-year history of a
Werner family member holding the job.
Gantt, who joined Old Dominion in 1994 as a regional
vice president, is considered by many a natural fit to fill
Congdon’s big shoes. Gantt is “the best operator in LTL,”
said Barnes.
—M.S.
Full-service supply chain and logistics service provider MVP Logistics has expanded its facility in the
Houston area to more than 100,000 square feet. …
Contract logistics service provider DHL Supply Chain
and Mills Fleet Farm, a retailer of outdoor and recreation equipment, have partnered on the design,
construction, and staffing of a new 1,100,000-square-
foot distribution center in Chippewa Falls, Wis. …
Ryder System Inc., a company offering commercial
fleet management, dedicated transportation, and
supply chain solutions, has opened a 109,000-square-
foot logistics facility in Laredo, Texas, that supports
cross-border shipments between the U.S. and Mexico.
ground breakers
