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Maverick's Williams could speed trucking changes.

TRUCKING COMPANIES BEWARE! When Steve Williams takes over this week as chairman of the American Trucking Associations, it will no longer be business as usual. Expect a shake-up. Williams would like to change the face of the trucking industry.

Embracing change, not resisting it, is Williams' way. That's how he built Maverick Transportation Inc. of North Little Rock into one of the largest flatbed carriers in the nation and the largest privately owned trucking company in the state. He's the first Arkansan to head the national trade organization.

Williams readily admits that he looks at the world differently than most in his line of business, taking opposite sides from industry thinking on many issues.

He has a reputation of being vocal on trucking issues--of asking the tough questions--and back in 1989 he decided that if he was going to whine, he should get involved and help develop solutions. That's when he joined the American Trucking Associations.

Despite his often contrarian views, Williams thinks that maybe some in the ATA have recognized the value of having different perspectives. After all, the organization did have opportunities to prevent him from becoming chairman.

Perhaps they also know a visionary when they see one--someone who can lay the groundwork for needed changes.

It's clear that Williams has his eye on the future, and with his knowledge of macroeconomics and demographics, he paints a grim picture unless changes are made.

Two primary factors will mandate change both for the trucking industry and for America.

Currently, 87 percent of all goods produced are moved by trucks. The first factor, Williams said, is that the gross domestic product (GDP) will increase by 100 percent in the next 20 years. And that means the trucking industry must double its capacity to move goods in the next 20 years.

The problem, Williams said, is that America hasn't committed to expanding the highways needed to meet that increased demand. Yet, already people complain about the overload of trucks on the road.

A second factor influencing coming change is the negative demographics of the work force. We have an aging population and smaller families, Williams said. In 1950, there were 12 people in the work force that supported 1 person in retirement. Now it's a 5-to-1 ratio and by 2050 it will be 2.8-to-1. In 2050, Williams said, for the first time in human history, the world's population will begin shrinking. In other words, there will be fewer people in the work force to meet the increased demands.

With the world changing so dramatically, he said, the old rules and strategies may not ensure success in the future.

"The policies we advocate must take into context the reality of where we are," he said. That reality is that the trucking industry will have to do more with less in the future.

"There a big disconnect about how stuff gets to a place," Williams said. Americans want the benefits that trucks bring, but not the trucks. But trucks move this nation, and while many debate whether we must have more trucks or bigger tractor-trailer rigs in the future, Williams says the industry must find ways to improve productivity. That could be through new technology or rethinking some of the regulations that govern the industry. Williams also is cochairman of Americans for Safe and Efficient Transportation, which has a legislative goal of allowing tractor-trailer rigs of 97,000 pounds, instead of the current maximum of 80,000 pounds.

"We cannot resist change," Williams said. "We must embrace it and capitalize on it. I question the resistance of trucking industry leaders to meet the demands of change."

While he questions that resistance, he also understands that it comes from being beat up the past four to five years. To make matters worse, the changes that have occurred have had a negative impact on the bottom line.

But with the GDP and capacity doubling in the next 20 years, the dynamics of the marketplace are changing, and trucking companies will be in a better position to capitalize on the growth, Williams said.

The Road Ahead

The industry faces numerous challenges. Among them the hours-of-service rule that faces a court fight, toll roads, safety and environmental regulations, diesel fuel prices at a record high, hazardous materials regulations, Mexican drivers under NAFTA, Homeland Security issues, a driver shortage and growing demand for on-time delivery, among others.

Williams said he would place top priority on two issues--hours-of-service and toll roads.

The Federal Motor Carrier Safety Administration, after a long study about the effect of fatigue in truck crashes, came up with new regulations to increase driver alertness and reduce fatigue-related incidents. Those rules went into effect in January.

A nonprofit consumer advocate group, Public Citizen, sued to stop the new regulations, which it considers less safe than the old one. In July the Court of Appeals at Washington, D.C., sided with Public Citizen and sent the HOS rules back to FMCSA for reconsideration.

For the time being, however, drivers continue to follow the new HOS rules, although Public Citizen is fighting for the industry to return to the old rules.

Despite early resistance to the new time-limiting rules among trucking companies and shippers, Williams thinks going back to the old HOS rules would be "irresponsible."

They weren't in effect long enough to obtain reliable data, Williams said, but what evidence there is points to the new rules making trucking safer.

A bigger fear is that as FMSCA complies with the court order, its new rules will make trucking less productive. That would force costs up, which would drive trucking companies to raise rates, which could have a harmful effect on the economy.

FMSCA also has called for electronic on-board recorders to ensure compliance with the HOS rules, another item that will add to the cost of shipping goods.

The other issue may prove even costlier to everyone, not just truckers. Language the Bush administration inserted into the U.S. Senate's six-year transportation bill could cost motorists billions of dollars in new taxes, according to Lane Kidd, president of the Arkansas Trucking Association.

That language would reverse the 45-year-old federal law that prohibits states from tolling the approximate 46,000 miles of Interstate highways, Kidd said. The new bill would allow states the "flexibility to implement variable tolls" on existing Interstate highways and even some U.S. highways.

Williams said toll roads are not the answer and the U.S. Senate bill must be killed. The U.S. House version provides for tolls to be collected on newly constructed Interstates until the road is paid for and then discontinued. That plan has the backing of the American Trucking Associations.

Kidd said, "Motorists have already paid for the Interstate highway system and these freeways are maintained with our federal gas and diesel taxes."

"President Bush doesn't think tolls are taxes, so he can keep his promise of not raising taxes," Williams said, but in effect, "it would be the most expensive tax increase in U.S. history."

According to the American Highway Users Alliance, Kidd said, nearly 1 trillion miles are traveled on the Interstate highway system each year. If states collect tolls on just 10 percent of these miles and charge a modest toll fee of 5 cents a mile, motorists would be hit with $5 billion in higher taxes each year.

"The trucking industry will survive," Williams said, but Americans better get ready to pay more for the goods they buy.

In the future, he said, time management will be key, and those areas of the country that refuse to pay more to update their infrastructure will see rates go up. For example, if a truck has to sit in congested traffic for three hours instead of the normal one hour trying to get into Atlanta, trucking companies will charge more.

Model for Maverick

Williams has been known as a young Turk since his beginnings in trucking. He has aggressively built his company and remains what he named it--a maverick.

"I've always been willing to push the envelope, to take chances," Williams said. "And if we didn't get our heads handed back to us on a platter, it gave us confidence."

That open, independent-thinking, risk-taking culture has been instilled throughout the company and attracts those who pride themselves on competitiveness. Williams calls it "living on the bleeding edge."

Williams' dad was a steel hauler, and after graduating from Southwest Missouri State in 1975, Williams went to work for Steel Haulers of Little Rock. In 1980, with the deregulation of the trucking industry, Williams saw the opportunity to start his own company.

Williams started with a single truck and now operates more than 1,000. Maverick employs more than 1,200 people and serves the continental 48 states. About 75 percent of its business is hauling steel and 25 percent is hauling building materials.

It ranked 49th on Arkansas Business' list of the state's largest private companies with 2003 revenue of $126.7 million. Williams said the key to his success has been paying attention to details. He's also made choices to embrace technology, and though his views can be edgy, the company is fiscally very responsible, he said.

"Our people have old-school work ethics that's married up with new-school technology," he said.
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Title Annotation:Maverick Transportation Inc; Steve Williams
Author:Henry, John
Publication:Arkansas Business
Geographic Code:1USA
Date:Oct 4, 2004
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