John "Corkey" Gray, Jr., is president and CEO of Air-Land Transport Service, Inc. He is the second generation in the family business and has led the corporation to new heights, implementing a diversification plan that strengthened the business to allow for stable and controlled growth.
Air-land tripled its volume in the past five years. Growth in the economy has been a factor, but a continuous "hands on" approach with his employees and customers are the main reasons for the company's success.
Gray's formalized education and training includes completion of numerous development programs through the American Trucking Association (ATA) along with many independent seminars designed to enhance his knowledge of the industry. He attended Western Illinois University and Bradley University.
He serves as president and is on the board for the Transportation Club of Peoria, and is actively involved with the Shriners.
Gray's professional affiliations include membership in the Illinois Transportation Association and the American Trucking Association.
Married to his wife Jane for 21 years, they have three children and three grandchildren. Their son, Todd, oversees the warehousing distribution segment of the business. Stephanie is largely involved in the transportation portion. Piper, their youngest daughter, works for American Airlines and resides in Chapel Hill, N.C.
Tell us about your father's entry into the delivery business. How/when was Speedy Delivery started? Briefly describe its history.
He started his business in 1939, delivering telegrams on a bicycle. Shortly thereafter he took out a loan and bought his first truck, delivering groceries and other miscellaneous jobs.
The majority of his work was predicated around expedited or urgent deliveries to and from local businesses and consumers. Some of the key industries he served were grocers, printing companies, and retailers. He picked up and delivered furs from homes that were to be stored for the Summer; delivered packages to consumers from various retail outlets; delivered groceries; and supported deliveries for printing companies.
He worked out of his home and kept his truck parked at a gas station in close proximity to downtown. My mom would stay home and answer the phone and dad would call throughout the day to see what deliveries had to be made.
By 1954, business was taking shape. He landed a contract to deliver packages, appliances, and furniture from Block and Kuhls. This required warehouse space and a couple more trucks. They moved the office to a warehouse they built on Bryant Street, in the north-end of Peoria. He hired three drivers, shortly thereafter Caterpillar started to use him to pick up packages at the Peoria airport. This required another two to three employees.
As malls were starting to crop up, the business of delivering packages to homes started to dwindle. This segment of the retail business was being phased out. As this happened Caterpillar expanded its work with Speedy to make pick ups and deliveries to O'Hare Airport. Caterpillar also opened their Morton parts distribution facility and we were contracted to deliver urgent parts on a daily basis to the bus depot and the airport.
In 1965, he bought his semi tractor and trailer. Caterpillar started to use Community Workshop as a source to do miscellaneous packaging work. We moved pallets of material to and from their locations. Other outsource vendors were also developed by Caterpillar, and we moved their materials as well.
In 1976, an opportunity came to start delivering steel to customers for a local steel company. This afforded us many opportunities.
We expanded our fleet size as well as our employment to approximately 20 people. It allowed for expansion into new geographical areas, and more importantly, helped us diversify our business from straight trucks and van trailers to being a flatbed carrier.
What was your role with your Speedy? What did you learn there that prepared you to open your own transport service?
I started at Speedy as a driver to start learning the business. As time went on I got involved with other support roles, as dad needed help with them. The thing that really catapulted me into the business was when dad and mom were on vacation and I received an inquiry from Caterpillar. Until that day I never did rating, but it was time to learn. I went to Caterpillar and found out the scope of what they wanted. I prepared the quote, presented it, and was awarded the work. My other significant role was to study and understand the tariffs and other governmental regulations required to be able to do the needed work.
The one most critical thing I believe helped prepare me to open my own business while at Speedy was to never lose site of the customer's needs. Needs change and are many times driven by the customers. You must continuously work to understand the customer's business, and what drives their success.
How/when was Air-Land Transport Service, Inc. started? What was the founding vision for your business? How has that vision matured since then? How do you expect it to change over the next five to ten years?
Because of business dynamics involving economic conditions, pricing issues, and the way our business was organized, we had to prepare ourselves to be more proactive. The need to filter in part time people and adjust schedules were issues that needed addressing.
I formed Air-Land Transport service in 1980 as a means to help gain more flexibility in our rate structures and service levels. Both companies worked hand in hand for the next decade, when we decided internal efficiencies could be better served by merging the two operations into one, Air-Land Transport Service.
We started out located near the Peoria airport. The company literally started with one truck, a dispatcher, and myself. Without exaggeration, there were times my wife, Jane, even helped with moving material.
The founding vision was simply to meet all the demands of our customers. I would rather have my customers think of me as their best supplier by servicing a lesser number than be a mediocre supplier because I am trying service to many accounts at one time.
Our vision really hasn't changed–we are more aggressive in attaining increased diversification within our customer base and maintaining a controlled growth approach.
The customer's needs are constantly change in this global economy, as they are inspecting their core competencies. As the customer recognizes the need for change we will be there to support these requirements.
The other significant factor that has changed is to recognize that the employees insight is crucial to the company's success. My senior management team and I advocate an open door policy, so that anyone who wants to discuss an idea is welcome to do so.
The change we have already seen, and I think we will continue to see, is one that requires a broadening of our services. Our company currently supports a vast array of transportation services along with on-site and off-site logistical support, which involves warehousing and distribution of goods, sub-assembly work, and on-site personnel services to support the customers primary production needs. The company will continue to support a process that provides a "turnkey" type operation to our customers. We want to be a resource to our customers to perform activities that are not considered to be their core competencies.
How many employees did you have (full/part time) at the beginning? Today?
In 1939, Speedy employed three people–my parents and one other person. The number of employees increased steadily through the years. In 1980 Air-Land/Speedy employed 21; in 1990 Air-Land employed 45; in 1995 Air-Land/Gray Interplant employed 70 people; and today Air-Land/Gray Interplant employs 450 workers.
How has your company expanded, and to what do you attribute the growth of your business from its origins?
The company has expanded through controlled growth and diversification of its services. We are not reliant on being only a transportation company, but also a full service provider of related areas and industries.
During the years 1980 to 1985, Air-Land started in a facility close to the Peoria airport with three people, transported urgent/expedite packages for Caterpillar, and contracted to haul steel for a local steel company.
From 1985 to 1990, the company purchased Schmidgall Transfer Co. ICC Authority, providing the opportunity for expanded growth, became back up carrier for all regional moves in the Midwest for interplant material moves at Caterpillar, and purchased the land and facility in Morton.
From 1990 to 1995, Air-Land became the primary interplant carrier at Cat, expanded flatbed services to transport steel from mills in and around Chicago, and diversified its customer base within 100 mile radius of Peoria.
The years from 1990 to 1995 were a tremendous time for growth for the company. The significant increase was primarily due to Caterpillar inspecting their core competencies and outsourcing the movement of material between facilities.
From 1995 to the present, the company concentrated on changing the organization culture, and began building an infrastructure allowing for managed growth. This entailed developing a senior management team experienced in leading organizations through new growth, and into the new Millennium. Establishing business units helped monitor company's successes, and diversification into related fields involving on-site and off-site warehousing/distribution functions, and value-added operations started. A new company was created, named Gray Interplant Service, Inc.
Air-Land continued its expansion by creating another business unit entailing over-the-road work. Since 1998 it has gone from five sleeper units to 45. This entity of the company primarily serves the flatbed industry.
The companies are involved in being a full service provider to its customer base. We are servicing accounts through warehouse distribution and logistic activities, pick and pack operations, sub-assembly work, providing services for on-site activities at customer locations, interplant shuttling, data entry administration, and truckload transportation. Our business plan has vision, intent, a mission, and business assumptions as well as corporate values and operating principles to help guide the companies.
What sets your business/organization apart from others in your industry?
"What you see is what you get" still applies to my business. I realize our business is continuously changing, and we have to be astute enough to stay ahead of industry trends.
The key to our success will be to stay on the leading edge of technology; to maintain the previously mentioned attributes; and to combine our strengths in our various businesses together, which will allow for increased efficiencies.
During the late 1980 and early 1990s, you were forced to close your over-the-road service and sell equipment due to high fuel prices and a tight business climate. How did those moves help/hurt your business?
Our over-the-road business was originally created when I purchased the Schmidgall authority. It became clear to me that we were not positioned to give a 100 percent effort due to the increased regional growth we were experiencing. It was a difficult decision to make, but one that was correct.
I knew our regional business was the foundation to build on, and if something needed to be put on hold for a while it would be the over-the road division.
Describe your relationship with Caterpillar–from the beginning to today. How did you position your company to meet the demands of such a large corporation?
A trusting relationship and open communication with Caterpillar are the key components for our success over the years. I have the privilege of being a customer as well as a supplier of multiple services for them. Caterpillar has taught me a lot about business. Their dedication and commitment to the community is outstanding. I also believe in investing back into the community, and trying to make my employees and their families a vital part of it as well.
Positioning yourself for positive growth is a matter of planning, executing, and understanding customer needs. As the business dynamics change, a company must also change if they are going to survive in this global economy. A key factor in my success is that I have aligned myself with a senior management team who are open minded and dedicated to achieving growth through many of the same traits and philosophies that my father started the business with. You combine that with continually investing back into the business with adequate levels of equipment and support to service the customer, and the two usually will meet their needs.
What trends in your industry have forced change in your business? How did it change? Was it for the better or for the worse?
Trends in the industry that have forced change include:
- When deregulation occurred.
- Improved equipment changed the image and increased efficiencies in the industry.
- Equipment size has allowed for more material to be moved with fewer trips. A trailer was typically 96" wide by 45' long. Now the standard is 102" wide by 53' long. This results in a higher cube per load.
- Due to improved road conditions, the gross weight that can be hauled increased from 73,280 pounds to 80,000 pounds.
- Various states adjusted speed limits, which contributed to efficiencies.
- Satellite communication increases efficiencies through lowering empty miles driven; more accurate responses are able to be given to the customer and internal functions are more streamlined.
- The customers intent to drive responsibilities/accountability pertaining to less on-hand inventory and true JIT service has forced better responsiveness by all involved entities.
All the above trends result into a common denominator of being able to service the customer more positively than before. I think any time you can control your own destiny you are better off. At least if things don't work out as planned you have the opportunity to alter them as you see fit.
What, if any, misperceptions does the community hold regarding your industry in general, or company here in Peoria?
Misperceptions more often relate to drivers being unsafe due to an excessive amount of driving hours they are perceived to do. The general public only hears of accidents involving tractor-trailers and seldom hears of the thousands of hours they drive without incident. Those involved in the industry realize that drivers are professionals and truly work hard at their jobs to be successful. The DOT guidelines are very stringent, and are designed to focus on safe driving, and safe equipment.
The other negative press affecting the industry is the alleged CDL scandal pertaining to illegally acquired driver licenses in Illinois. This issue has been getting a lot of press, and is not helping the image if the industry.
What impact will the proposed federal regulation on limiting long distance operators to no more than 12 hours of driving in a 24-hour period, etc., have on your business?
The proposed federal regulation on limiting operators to no more than 12 hours of driving in a 24-hour period will create a couple of problems.
A driver could lose as much as four hours of driving time per day, which translates to lost wages. The issue is that this could raise the cost to the customer, realizing that it will take more drivers and equipment to move the same amount of freight moved today.
What other state and/or federal regulations hamper your business? What, if any, regulations would you be in favor of?
A regulation that could effect business is the EPA's more stringent emissions controls. This may cause higher costs from the engine manufacturer, which in turn will affect the consumer. More parity in speed regulations between busses/tractors and automobiles could reduce congestion on highways. The ability to bypass scales with the new pre-pass system (for companies with good safety ratings) will allow for increased fuel efficiencies.
How have you marketed your products or services in the past? What, if any, changes have you seen in those efforts recently?
I have been the main marketing arm of the business up to the last three years. The company's delivery performance and reputation has probably been the key to gaining new opportunities as much as my developing them personally.
The other element that I think has helped is that we have focused on particular niches in the industry, and a limited customer base. In the last three years my son, Todd, and my vice president, Tom Daman, have also taken a direct and active role in promoting the organizations.
Going forward we will become more aggressive in promoting the companies. We will have a full-time employee dedicated to business development.
The companies will remain focussed on maintaining a limited account base, and will attempt to penetrate each one more thoroughly to offer a wider scope of services.
How does your company recruit and retain employees? Have you seen a change in those efforts in the last decade? Your children are involved in the business. Do you have a succession plan?
The primary methods of recruiting employees are through the media, advertising on our equipment as well as customer and employee referrals. We have incentive programs in place that compensates employees when the company hires people based on their recommendations.
The retention element is an issue we put a lot of effort into. I believe that to be successful one has to reinvest back into your employees.
There are several things I have our H.R. and safety departments concentrate on. Benefits and competitive compensation plans are critical. We strive to provide flexibility in our benefits by offering options so that our people have choices so that they can, in essence, customize their plan to fit their personal needs.
Being available and keeping an open line of communication between these departments and the employee is very important. I want my H.R. and safety people making contact with employees so they understand their needs.
There are many ways to build unity among people and I expect management to work at it. My goal is to provide all employees a safe and a pleasant working atmosphere. These efforts have always been important to me and I don't expect that they will change in the future.
I established a succession plan for the business two years ago. I am not ready for retirement, but realize at some point in time I will be. There will be a span of time in the business with me retiring and my son Todd taking over that I had to prepare for. To circumvent this I have a vice president, in place who is capable of leading the companies. Todd and he will work together, which will allow Todd to gain the experience to assume my role at a given point in time. As the businesses continues to grow, I knew this was a critical element that needed to be put into place.
What changes do you plan to make in the future?
As the business expands, and when it is practical I have to look at ways to be more efficient. My intent is to consolidate similar departments that are now separate within the companies. I know our common values are the same, along with the business plan, H.R./safety programs, and administrative issues can also be dovetailed together. I believe the business will continue to expand due to the strength and experience of the employees and my senior management team. They will continually be prompted to think proactively. There are also related services that are similar in nature to what we are doing that I want to expand into, which will aid our existing customers, and provide expansion into others.
What has been the most challenging for you as a business owner? The most rewarding?
The most rewarding as well as challenging times go hand in hand in my mind. I get a lot of personal reward as I see employees develop their skills and become more proficient in their work. I also get a sense of pride as I hear about employees and/or their family's successes.
When I think of challenging and rewarding accomplishments in the business pertaining to customers, I think of when I became a core carrier and an outsource supplier for Caterpillar. This had major impact, and is a challenge plus a reward working for such a large influential company. The other company's that have given me similar reward are Keystone, and the newest addition to the area, Hanna Steel.
Other challenging things are reacting to influences impacting the transportation industry, and at the same time exceeding the expectations of my customer base. The positioning of the companies to be responsive and in a position to react to expansion is always on my mind. I work hard at having the foresight that prepares me for future challenges that may confront the organizations. IBI