Known on northeastern highways for its iconic orange and white trucks, Preston 151 was founded in 1932 in the Chesapeake Bay area of the United States. The company was started by a canned goods wholesaler, Albert W. Sisk and his sons, who had difficulty shipping small amounts of their product via rail routes. One of their accountants, A.T. Blades, suggested that the company start its own small transportation division.
After a $500 loan from his employer, Blades was put in charge of the small endeavor. Initially, the company focused on small, irregular loads. These loads would later be known as less-than-truckload, or LTL. The way was not easy, as the Interstate Commerce Commission (ICC) had implemented regulations on trucking companies, which were restricted to mandated routes with fixed rates. Despite the economic challenges presented by the Great Depression, in 1936 Preston Trucking opened its own offices and acquired its motto: “151 pieces of equipment to serve you.” By 1942, the company was able to pay the first cash dividend on its stock.
Regulation made growth a challenge for trucking companies, but it was a challenge that Preston 151 handled readily. Steady growth defined the company in the 1950s and 1960s, as Preston 151 acquired other trucking companies and grew the areas they could service. Since routes and rates were regulated by the government, acquisition was the best way to extend the company’s reach. For example, in 1968, Preston 151 acquired the O.K. Heilman Trucking Company and extended its service area to northwestern Pennsylvania and Ohio. Acquisition of other trucking companies defined Preston’s growth.
In 1973, the company acquired Kirby Transfer and Storage, as well as the American Transfer Company. In 1974, Preston acquired the operating rights of Export S/D/Z, as well as the Southern Maryland Transportation Company, further growing its routes and areas of service. The company’s biggest acquisition occurred in September 1975, when Shipper’s Dispatch was acquired. Based in South Bend, Indiana, this company’s acquisition doubled Preston’s service area. Preston could now service Illinois, Indiana, Michigan, Missouri and Ohio. The acquisition made Preston the 20th largest carrier in the United States, boasting revenues of more than $100 million annually.
Growth is just one way to measure a company’s success, and Preston 151 faced difficulties that could not be mended by simple acquisition. In 1972, Preston was charged by the Equal Employment Opportunity Commission (EEOC) for discriminatory hiring practices. The newly founded Commission purported that Preston discriminated against women and people of color by using unfair tests and discriminatory wording in its help wanted advertisements that dissuaded both groups from applying or being hired. The Commission also asserted that Preston discriminated during promotion and transfer practices. Preston also faced union issues. In 1978, conflict between supervisors and employees had reached a fever pitch. A one-man wildcat strike occurred in Detroit, Michigan, leading to a slow down and lock out of two-thirds of the Detroit location’s employees.
Deregulation was coming, and Preston management knew the company wouldn’t survive without mending fences between supervisors and employees. In 1979, Preston hired a management consulting firm to survey employees in Michigan, New York and Pennsylvania to gauge their sentiment toward their supervisors and working conditions. The results were not good, so Preston tried empowering its workers and reorganized the company’s titles and structures to increase employee satisfaction.
Deregulation of the trucking industry came in 1980 in the form of the Motor Carrier Act. Where other companies faltered or barely survived, Preston thrived. That same year, Preston formed a subsidiary, Pioneer Transportation Systems, to break into the full truckload industry. Preston recorded a profit of $5.26 million that year.
Deregulation afforded Preston the freedom to expand its reach even further, and it added service to California and Nevada. The company also began shipping goods to the Caribbean and Puerto Rico under the name Velero and added a new service, Transocean, to connect its business interests with Europe. By this time, Preston had 78 freight terminals and 4,000 employees.
By 1983, Preston had further improved employee morale by implementing the industry’s first system of bonuses for employees meeting productivity goals. Finally, in 1983, Preston set up a holding company, Preston Corporation, Inc., to be a parent of Preston Trucking and any further acquisitions.
The 1980s saw continued growth as Preston continued its pattern of aggressive acquisitions. The company acquired Bowie Hall Trucking, Saia Motor Freight Line and four affiliated companies between 1984 and 1987.
Reeves Transportation Company, a carpet hauler and consolidator which Preston had previously acquired purchased Carpet Services Inc. in 1987. The company was renamed CSI Reeves. At the time, CSI Reeves was the largest carpet hauler in the U.S.
In 1987, Preston’s reputation suffered when the company attempted to regulate health insurance costs by refusing to provide healthcare benefits for employees diagnosed with or suffering from AIDS.
The 1990s proved to be more challenging than Preston 151 could stand. Consolidation of subsidiaries, originally intended to ward off any unwanted purchase overtures, proved more costly than predicted. Bowie Hall Trucking and Pioneer Transportation Company were consolidated in 1990 but could not outrun falling revenues and shrinking profit margins. In late 1990, Preston shut down Pioneer Transportation and divested CSI Reeves, a move that cost the company $17.8 million.
U.S. Xpress Enterprises (NYSE: USX) purchased CSI Reeves and merged it with US Xpress’ LTL carpet division, Crown Transportation Systems. In the mid 2000s CSI Crown became Xpress Global Systems, Inc. and remained a part of U.S. Xpress until 2015, when the truckload carrier divested it in a sale to a private equity group.
In 1991, Preston had to reign in the operations of its long-haul subsidiary, Smalley Transportation, as well.
In spite of reorganization attempts, Preston ended 1991 in the red once more. Though the company made small gains in income after raising rates in 1992, the company simply couldn’t outrun the hole it had been steadily digging. Yellow Corporation purchased the company in 1993 but sold it back to several former managers five years later when it realized the company’s debts were untenable.
After just a year under new ownership, sales deteriorated even further. The end of the line came in 1999, when Preston shut down operations completely, stating simply that they did not have enough money to keep up with its bills.
According to the Washington Post, when Preston shut-down 5000 employees lost their jobs, including 3500 Teamsters. The company was doing around $450 million in revenues in the prior year.
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