CHATTANOOGA, Tenn. — Like many other motor carriers during the recent recession, Covenant Transport found itself on the wrong side of the financial ledger.
After a profitable year in 2005, Covenant’s parent company, Covenant Transportation Group, had a net income loss for four consecutive years, including a huge loss in 2008. Being a public company, Covenant’s financial data was there for all to see — and discuss. Unfortunately, many of those discussions took on a negative tone with misconceptions about the company — created on hearsay conversations — being bantered about in truck stop lounges and motor carrier recruiting centers all across the country.
Many of those misconceptions still exist, even though the company’s bottom line is getting stronger and stronger and Covenant is doing everything possible to communicate — and implement — its positive message and company culture.
“There’s a perception in the driving community that you can get good miles at Covenant Transport, but Lord help you if you ever need to get home,” Joey Hogan, president and COO of Covenant Transport and COO of Covenant Transportation Group, told The Trucker in a recent interview. “That is a major misconception out there. I think that’s inherent in our business when you’re an over-the-road driver for a carrier that runs 48 states, especially in our model.”
Admittedly, Hogan said, it was a serious issue at Covenant Transport several years ago.
“Starting late 2006 and early 2007, we launched an effort to change that and it’s something we monitor on a frequent basis,” Hogan said. “We have service standard for home time. We’re getting our drivers home 92 percent of the time on time to the day they need to be home. I know what the numbers are year to date; I know how it was last week and I know how it was by division. I want that as high as possible.”
A misconception of inflexibility within the customer community also plagues Covenant Transport, Hogan said.
“They claimed we are too aggressive when it comes to affecting change with customers,” he said. “Yes, we’ve had very passionate leadership in that regard because we needed it. Our drivers need to be paid more money. Truck prices are up over 50 percent the last eight or nine years, net.”
That perception was probably somewhat real in the past, Hogan admitted.
“But we are aggressively trying to change that,” he said.
The company’s professed faith-based foundation has at least been partly responsible for a third misconception.
Both Hogan and David Parker, the company’s founder and now chairman and CEO of Covenant Transportation Group, are both very open about their Christian faith.
Hogan said his faith guides his values.
“I was raised to keep God first in my life, although I don’t always do that,” he said. “I was raised to treat others the way I want to be treated. I was raised to strive to always be last. Work hard, answer yes with a yes and no with a no and your word is very important.”
So, it obviously pains him when he speaks frankly about the perception that “we try to be perfect from an employee ‘better than thou standpoint.’
“That’s just not true. We all make mistakes. We welcome anybody that wants to work,” he said. “We have a high standard of how we want to treat each other. I’m not embarrassed to say that. I’m not going to treat you any differently in how I want you to treat me. And so, that’s something we battle, that I have to be perfect to work there. There’s stuff that goes on out of 5,000 employees that shouldn’t go on. People need to understand that, too. We battle that. The world is always going to take attacks at that.”
Covenant reversed the negative trend in the second quarter with a profit, but it’s not necessarily the positive bottom line that makes Hogan smile the most.
It’s a different attitude among employees, that of a team wanting to work together for the best of the company, and the company’s safety record.
“I’ve seen a change in our employee base of wanting to be actively be a part of the decision making process. It’s kind of like the growing up of a child,” Hogan said. “When I came here in 1997, the decision making was confined to a very small group of people. I would say since 2005 we tried to change that and engage the company from the floor level up to say ‘we need you to help, we need you to step out of the box; we need you to step forward.’ It’s not where I want it yet, but you can see it and feel it.”
“I’m also very proud of what we’ve done across all the companies, but particularly at Covenant Transport in the area of safety improvement. If I could pick one thing where I could see the whole company had to get engaged and had to make some changes it was in safety.”
Frankly, Hogan said, seven or eight years ago the company’s safety record was terrible.
“We have made consistent, meaningful improvements each and every year,” he said. “We had two drivers in the National Truck Driving Championships. We had multiple state winners. We’re continuing to put up record DOT accident per-million-mile numbers. Our safety director has been honored for his work. I could go on and on.”
Hogan is optimistic about the future.
“We’ve been fairly disciplined on what we do,” he said, speaking of Covenant Transportation Group. “For where we are today, we’re not in Mexico although we’re in a test phase there and doing incredibly well. We’re not in Canada, we don’t do intermodal. We’ve done very little government business. But we have a regional truckload platform (Star Transportation), we have a large refrigerated platform (Southern Refrigerated Transport), we’re known as an entrenched expedited carrier and we have a non-asset brokerage business.
“But we have other opportunities we haven’t touched yet, starting a product in Canada in the next few weeks. [With] intermodal, I don’t know. It’s on the radar screen. I don’t see us getting into pure logistics, but over time the asset carriers that have the non-asset option will continue to grow because as capacity stays tight, customers are going to want to take care of the guy with the assets and so I think they are going to allow us to peel off opportunities for our non-asset arm. Will any of us ever be as big a C.H. Robinson, I doubt it. But I think we are going to compete OK.”
And with the misconception being erased and the infusion of a culture that is based on shared responsibility and shared benefits, Covenant will compete very well, thank you.
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