Trucking comeback: Dohrn Transfer turns the corner with assist from Pitt Ohio

There is rare turnaround family LTL success story going on in the Midwest. Iowa-based Dohrn Transfer Co., a new unit of Pittsburgh-based Pitt Ohio Transportation Group, claims to be “the best in the Midwest,” and industry experts and insiders agree.

And the change is being driven by a couple of 40s-something trucking veterans –the great-granddaughter of the man who founded the company in 1921 and an African-American veteran of LTL giant XPO Logistics, the third-largest LTL carrier in the country.

Heather Dohrn, vice president of sales and marketing, said Pitt Ohio’s infusion was just what the company needed, when it bought majority ownership in 2014. Since then she said Pitt Ohio has invested more than $50 million in the company.

Chief Operating Officer Robert Howard came to Dohrn when Pitt Ohio top management recruited him after a 13-year career at XPO Logistics, which had bought Con-way Transportation for $3 billion in 2015.

 “I was a director at XPO and I wasn’t forced out,” Howard said. “I took a leap of faith, left XPO and the Fortune 500 world. We had no metrics, no technology here. It was like building it from the beginning. We started to get people involved.

“Dohrn had some smart, driven people who just needed a little bit of guidance,” Howard added. “We didn’t change the culture but slowly modified it to drive improvements. We had Pitt Ohio investing heavily. Our power equipment was 16-1/2 years old. Now it’s less than 4-1/2. We’re going through this transition, delivering more e-commerce, more residential.

 “The biggest change is the ability for us to think long-term with Pitt Ohio,” he added. “XPO is very focused on the current quarter. Here we were able to take a longer view. It’s paid off for us.”

Dohrn is compiling a Who’s Who list of Class-A customers that include John Deere, Ecolab, PPG, Salon Centric and Grainger. Its customer base is largely agricultural. Dohrn, whose father Gary still is involved in the company, noted that turnarounds are extremely difficult in an industry that has lost more than 70,000 carriers since deregulation in 1980.

“Trucking is a tough industry,” she said. “But Pitt Ohio was clear it wanted our culture to remain intact. Their senior management told us that family companies were ruined by being gobbled up by larger companies. They were there as support, soft landing for us. We have leveraged their knowledge of the industry.”

For more than a decade, experts say family-run trucking companies have had trouble keeping up with the well-funded larger public and private carriers.

In doing so, Dohrn is bucking the industry trend running against family-owned, privately held companies. It was such headwinds that have caused hundreds of family-run companies, epitomized by the March 2019 closing of New England Motor Freight (once the 17th-largest LTL company) to shutter its doors.

“They simply do not have the resources to invest in an ever-changing industry,” Pitt Ohio President Chuck Hammel told LM. “I recognized this and wanted to do something to help these companies compete and keep their long legacy going.”

Pitt Ohio acquired controlling interest in Dohrn in 2014. But as evidence of Hammel’s unique approach to acquiring companies, he eschewed top-down, one-size-fits-all approach to management.  Most acquiring companies would seek to create one brand and establish one management team.

Rather, Pitt Ohio chooses to meld different regional carriers together, retain their company cultures, increase their employees’ engagement, and provide a great service offering. It’s a unique approach and it’s working.

Dohrn has gone from operating with an on-time performance in the mid-80s to the mid-90s. After incorporating standardized processes, Dohrn’s operating ratio similarly has gone from around 99 to the low 90s, Dohrn said. She is projecting the privately held company will do about $135 million this year, up from $125 million last year.

The improvement is part of Pitt Ohio’s acquisition strategy that supports the individualism of each company but they also have the oversight and council of a parent company, Hammel explained.

“We wanted to keep the culture, current employees at all levels and their relationship with their customers intact while at the same time help them with their safety program, purchasing, insurance and I/T decisions,” Hammel said. “We wanted the employees to see that it is the same company the day after that sale as it was the day before the sale – just a better version of themselves,” added Hammel, who said he never once thought about merging Dohrn into Pitt Ohio. 

“We handle all of our (related) companies (Dohrn, U.S. Special Delivery, Ross Express, ECM, Palmetto, Motor Carrier Service) in the same manner,” he said. “The results so far have far exceeded our expectations.”

“When Pitt Ohio bought majority, we didn’t have enough ability to reinvest in our company,” Dohrn said. “Our equipment was old and needed to be replaced. We had kind of grown past what we were good at managing. We needed outside capital to take it to next level and where we needed to be.”

To get employees engaged, Dorhn raised driver wages 21 percent with the help of Pitt Ohio’s $50 million investment.

“That changed the dynamics,” Dohrn explained. “Having happy drivers made the difference. We stopped the churn. We put into place (solutions for) safety concerns, we turned everything around to make sure we were safest carrier around.”

With the largest fleet of heated trailers in the Midwest, Dorhn now says fears of bankruptcy are in her rear-view mirror.

“I’ve lived in this industry my whole life and that fear was always in my mind,” she said. “We are so proud now. Every month we show better numbers.  I don’t have any fears of going out of business. We are a solid carrier showing improvement every month. I feel our best is yet to come.”

She credits Howard, the former Con-way and XPO rising star, for helping “build our culture” while improving performance metrics.

“He hasn’t disrupted anything we’re doing. He has a gentle approach in introducing ideas,” Dohrn said. “He’s open minded in suggesting ways to improve. Everybody can talk to the boss. Robert has embraced that as well. That personal touch really makes us different.”

Dohrn noted one interesting aspect of her company is “you don’t see a lot of women and minorities running trucking companies. Robert is 42. I’m 43. We have a lot of energy. That makes us open minded to try more things. We like to be in the forefront of things to give better service and give better feedback.”

Of the traditionally white male power hierarchy in trucking, Dohrn chuckled and responded: “It’s changing slowly. I’ve seen the changes.”

Of his soft and personal approach, Howard said that’s something he’s learned over the years in trucking.

 “Trial and error,” he said. “Here’s a company that’s struggling, the founder is still here, he’s working every day. I don’t want to be disrespectful to him. My job is getting people to buy into change. I don’t know everything. I was around to facilitate change and bring the people along. Once we melded the culture together we started to make some improvement.”

Even in midst of the worst pandemic in a century, Dohrn is on pace to set profitability and revenue marks this year, he said.

Dohrn implemented a new operating system which provides customers with complete shipment visibility, Pitt Ohio executive vice president/chief marketing officer Geoff Muessig explained. He said that in the third quarter Dohrn will leverage this platform to introduce paperless delivery receipts.

After acquiring Dohrn, Pitt Ohio officials began sharing best operating practices with its new sister company. The Dohrn management team began to build on an existing culture to start to build a premier service carrier, they said.

“The rebuilding process started from within by focusing on what needed to change to recruit, train and retain engaged employees,” Muessig added. “Finally, the journey extended to encompass the customer experience.”

Sustained investment over many years enabled Dohrn to recapitalize its fleet and enhance the driver’s work day experience. Increased wages and modern and clean equipment enabled Dohrn to train, retain and recruit upper echelon safe drivers.

Muessig added Dohrn standardized processes and implemented on board technology in the trucks which improved service, reduced claims and improved shipment visibility and customer service.

Despite the COVID-19 pandemic, Dohrn has improved its on time delivery performance which enabled the company to grow year over year revenue despite the onset of the pandemic.

“Today Dohrn is one of the best LTL carriers in the Midwest,” Hammel said flatly. “Their service, safety rating and financial results speak for themselves.”