Schneider and the history of trucking
March 2, 2021
Schneider National, the big orange fleet from Green Bay, Wis., recently noted the 30th anniversary of its intermodal service with a news release. Not a big deal to anyone other than Schneider, really.
But that news release reminded me Schneider was once involved in a truly momentous industry turning point. American trucking has seen four such historic landmarks in time.
1935. Congress passed the first Motor Carrier Act that officially regulated trucking as a public utility under the Interstate Commerce Commission – the ICC. Trucking was mostly local and farm-to-market, but regional carriage was growing. Existing carriers received operating authority in the territories they already served and along the routes they used. Those operating rights could be sold to another carrier that wanted to expand.
Truckers who wanted to start a business had to acquire existing rights or apply to the ICC for their own. That was a challenge. They had to convince an administrative judge that shippers needed service that existing carriers did not provide. Operating authority became valuable, even as collateral for large business loans.
1956. This was the year the interstate highway system was born. The interstates reshaped the industry, slashing linehaul and sometimes even local transit times. Now trucks began to seriously compete with railroads.
Before the interstates, much LTL linehaul was on the rails. For example, car-loading companies picked up and delivered locally. They sorted shipments by destination cities and then loaded them onto box cars for linehaul. Cross-dock operations had trucks on one side and box cars on the other. Since there were no coast-to-coast carriers, much long-haul LTL moved this way – including shipments we now consider truckloads. The interstate highways prompted carriers to buy authority and linehaul by truck.
Over the next 20 years, car loaders disappeared, slowly at first, but more rapidly as long-haul freight moved to the interstates.
1980. The Motor Carrier Act of 1980 pretty much undid the Motor Carrier Act of 1935, when the U.S. population was 127 million. It deregulated an enormous, mature industry in 1980 when the population was 226 million (it’s now 331 million). Trucks had taken almost everything but bulk freight from the railroads, and many big LTLs served the country coast-to-coast with operating authority obtained piece by piece at great expense. Overnight, deregulation made that authority worthless. It also removed barriers to entry. Virtually anyone could start a trucking company with no geographic restrictions. The truckload industry we know it today was born, and driver wages industrywide began to fall.
1987. Here’s where Schneider National comes in. Schneider was the first major carrier to commit to the mobile communications that revolutionized trucking, ushering in the Data Age we live in today. A startup company called Qualcomm finally made practical what had failed before – messaging from anywhere over satellite. A retired engineer named Irwin Jacobs created Qualcomm and convinced Schneider President and CEO Don Schneider to give it a try. Schneider outfitted a dozen trucks with Qualcomm and was satisfied enough with the results that he ordered his entire fleet equipped with Qualcomm. Big Brother took a permanent seat in the truck.
It wasn’t all bad. Satellite messaging turned out to be less stressful than hunting for a phone booth or begging to use a shipper’s phone. In a related development, the Department of Defense allowed for civilian use of its Global Positioning System in 1983. Big Brother got bigger.
Meanwhile, big truckload operations followed Schneider’s lead while Qualcomm grew into a telecommunications giant.
With trucking a small, increasingly unrelated division by 2013, Qualcomm sold it to a private equity firm that renamed the company Omnitracs.
As Omnitracs puts it in its online history, technology turned trucking “into a model of data-driven sophistication.” Schneider National was there at the beginning.
In the late 1990s, I had an appointment to interview legendary CEO Don Schneider at his office in Green Bay. I drove from North Jersey only to find Don wasn’t there. So, I was given a tour of the sprawling facility, including a look from the gallery onto a football-field-size warren of office cubicles – the life center of Schneider’s entire trucking operation. I was impressed. Don Schneider died in 2012.
Maybe the most interesting part of my Schneider adventure was the Green Bay hotel where I stayed. My room was decorated in Hawaiian style with an enormous hot tub – the first I had ever experienced.
Unlike Schneider’s bustling operations floor, it was underwhelming. LL