Talkin' Trucks With Mike:A History of the TNT Companies

The middle truck in the Carson Ford C-series pic looks to be a Dodge.

 

Definitely is a Dodge, an Alltrans truck, whoever they were.

 

Yes. Alltrans was a very big user of Dodge trucks. It operated all Dodge models :

C serie


L serie


D serie

 

The name of the Hungarian immigrant was Peter Abeles. It's the visionary man behind the worlwide expansion of TNT.

Ken Thomas (left) and Peter Abeles (right)
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Now we're getting somewhere. :^)

 

The partial spin off or the TNT's American regional trucking network and the set up of TNT Freightways Corp. was not a fire sale but quite the opposite. The process was part of a strategy taking into account the big picture. The TNT Group had founded massively between 1985 and 1990, in its American as well as its European operations and with the Gulf War having generated a worldwide recession in 1992-93, TNT was for the first time since its incorporation in a dept situation which increases its vulnerability.

The purpose to set up TNT Freightways as a public company on the New-York stock exchange was for generate new cash flow without lose the control of the American operations and pursue their expansion. So, the public offering had a value which represented approximatively 75% of the total capitalisation of the company, the residual value (25%) being held by the Australian Group. In this way, TNT Ltd. kept the control of the new entity the other shareholders (sleeping ones) being mutual funds the most important of which holding only 12% of the shares. However, a 25% controlling ownership can be relatively fragile. Then the TNT leadership, in Sydney, weaved a genuine spyder web around the new autonomous entity of TNT Freightways. A series of agreements concerning trademark utilisation, competition rules, commercial cooperation, management staffing and the handling over of some peripheral operations were concluded between the two companies confirming the presence of the Australians on the American market.

During the year 1993, TNT Freightways buys back from TNT Ltd. the remaining 25% of shares held by the Australian holding. Then, TNT Freightways becomes a totally American company without any ownership link with TNT Ltd. but continuing to keep organizational, commercial and contractual links with its previous tutor this, until 1997 when the original agreement come to the end. Then, TNT Freightways saw the opportunity to rebrand itself and soon changed its name to USFreightways.

 

So at that point TNT completely exited the LTL business in the US?

Was there ever an initial plan to expand Reddaway, Holland, and New Penn to cover the entire US? It seems to me that they were buying up territory at first, in the form of smaller companies, and then stopped, slowly backing away in an artful and profitable manner but decisively getting out of it nevertheless.

Today's USF, if that is the descendant, is a sort of 3PL with an aerated logo. USF itself moved on and sold those lines to YRC and went another way or sold the name. It's interesting that three respected regional LTL's changed hands so often within a decade.

Compared to the timespan of CF or even the offspring Conways, those three seem to have been a hot potato at the time, and TNT seems to have kept receding in general. It seems like TNT changed course for some reason.

Fedex was also buying up regional LTL's but keeping them and quickly integrating them into a nationwide LTL,

Was it really just a horror of debt on the part of TNT? Or was there an attitudinal shift within TNT regarding North America and the US in particular? Would it have to do with seeing Fedex buying up those companies and building them out, and knowing that TNT had bought unionised properties and was possibly limited in growth potential or would have additional costs comparatively?

I noticed today, BTW, that FxF is looking for new recruiting bodies, specifying innovation and working across all levels to find quality personnel. This is for the Denver area, which somewhat explains it, but still it says that the battle isn't over, even for the current top dog.

 

Your questioning is very pertinent but the answer be likely to turn out to be complex.

According to my previous post (217), the TNT's American operations have served as a financial lever to keep the Group afloat and able to maintain a significant (operational) presence on the North-American continent. The slight difference was as follow : TNT have desinvested financially but have protected its operational capability to support its US non LTL operations as well as the capability of TNT Canada to move easily LTL freight south of the border in cooperation with the same sister companies displaying the same trademark. In fact between 1992 and 1997, TNT Freightways was a kind of franchise of TNT Australia. The links between TNT Ltd. and TNT Freightways was very close.

First, the management didn't change; by the way Transport Group, the TNT American holding, has transferred its executive offices to TNT Freightways but has subleased a part of these executive offices keeping in this way a phisical proximity between both organisations.

The other agreements between both companies was the following :

>> TNT Freightways Corp. were obligated to make its management available to Transport Group and TNTCanada over a period of five years on an as needed basis, to insure an ordely transition of certain responsibilities and to consult with respect to matters for which such management had special knowledge as a result of its past involvement with Transport Group and TNT Canada.

>> TNT Freightways gained the right to use some of the logos and trademarks belonging to TNT Ltd. and TNT Canada.

>> An agreement of no competition in the general freight LTL and truckload sector was signed, TNT Freightways restricting its trucking operations to the American territory and TNT Ltd. to the Canadian territory. This agreement was completed by exclusive interlining between certain TNT Freightways subsidiaries and the Canadian division, TNT Overland Express.

>> A joint venture (TNT Logistics Corp.) was set up to manage the logistics operations excluding the automotive logistics activities (see the chart in the post no 172).

>> TNT Freightways continued the insurance coverage provided through the TNT Ltd. group policies.

I gave all those détails in the purpose to illustrate my point. In fact between 1992 and 1997 the only change, even though major, was the source of the money to operate the company but nothing had changed for customers, suppliers or the public in general. The TNT LTL freight continued to travel smootly throughout North-America and the regional deep roots of the TNT American LTL trucking subsidiaries was well alive. The two companies, one backed by Australian money and the other by American money have worked together during five years as one company and at the end of the day it was a success story.

From a humble beginning in 1981 with Pilot Freight Carriers, Transport Group and later TNT Freightways Corp. have built the fourth largest LTL network in 1996 this, behind Roadway Express, Yellow Freight, Consolidated Freighrways and equally ranked with Con-Way Transportation Services.

Now about Reddaway, Holland and New Penn :

New Penn have never been part of TNT. Reddaway and Holland have never been a hot potato for TNT; their respective operating ratio was among the best of the industry : between 84% and 88% for Reddaway and between 88% and 92% for Holland.

TNT had no similarity with FEDEX neither with UPS. The Australian Group was not an `` integrator `` but a conglomerate multimodal, ultra diversified with loose links between its different components. It played a completely different ball game.

Finally, U.S. Freightways Logistics is not related at all to USF.