RIP Watkins Shepard

I'm confused, was Watkins-Shepard profitable by itself or not?

 

I should have said "profitable enough" in the second bolded sentence.

If SNI takes the trucks running Watkins LTL freight and has them run system TL freight instead revenue stays the same but costs go down.

 

To my knowledge Watkins was doing very well before Schneider bought them.

 

And they were a highly recommended company to work for, esp for new drivers.

Unlike SNI.

 

Imagine you own a large bakery that makes bread and cakes. You notice that pies are becoming very popular and you want in. Your bread ovens won't work for pies and your cake ovens wouldn't have the capacity to make cakes and pies, not to mention all of the pie tins and whatnot. You find a pie bakery that is doing well, but the numbers don't work, but if you buy the orchard that supplies the pie bakery as well it looks like you can make some money.

You buy them both and start scaling up. Then you find out that orchards output is significantly smaller than you thought. It turns out the orchard had a bumper crop the last three years but normal output is 30% less. Also the bakery's receipe calls for the pies to cool overnight so you can't run two shifts like you'd planned on. You make some changes and get your production problems sorted out but then find you have a marketing problem - you struggle to get stores to stock your pies.

After a few years you decide to cut your losses. You sell off the orchard for whatever you can get but convert the pie bakery to cakes as you can use the space.

In this analogy Watkins is the pie bakery and Final Mile is the orchard.

 

Familiar with the business. Been working for one of Watkins “competitors” for years. There’s up and downs in the market. But Schneider ####ed it up.

Watkins would have been and fine and still around if they either hadn’t sold to Schneider or Schneider hadn’t tried to do so much so fast.

 

Seems like this is why Chris retired........

 

That and he could finally cash in his stock options

 

And Schneider could have keep running the "Watkins" freight without a problem- the #### up was with the final mile.

Schneider made some dumb assumptions in the acquisition, then some more in the execution. At the same time we acquired Watkins et al we were turning down Amazon freight for being less profitable than general freight. There were people in upper management who argued against the move, but lost.

 

after only a couple years?