Conversation with a leader

Wednesday, November 9, 2005 at 12:00am

Beth Franklin is chief executive officer of Nashville-based trucking company Star Transportation Inc. She oversees about 800 employees, including 600 drivers, and a fleet of 600 tractors and 1,700 trailers. Franklin says Star projects more than $85 million in revenues in 2005.

Working from her Polk Avenue office in South Nashville, Franklin is focused on continued company growth, which was recently positively impacted by the acquisition of Jacksonville-based Camp Transportation.

Star Transportation acquired Camp Transportation last August. Your thoughts?

I visited the Jacksonville facility recently and met a few of the shippers in the area. There is an immediate need for capacity because of the number of extra loads moving throughout Florida. The future for an increase in Jacksonville truckloads is very bright.

Will there be additional acquisitions?

In addition to Nashville, we now have terminals in Jackson, Miss., the Memphis area, Atlanta, Knoxville, Jacksonville and Orlando. Growth at our current facilities is our top priority. However, if a strong acquisition opportunity presents itself and we can capture synergies, we would pursue the opportunity.

How is Star working to increase its Hispanic presence?

Star is very excited about the addition of a Hispanic driver recruiter. This recruiter and fleet manager is bilingual and will work from the Orlando office. We are recruiting Hispanic drivers, mechanics and administrators throughout our system, but the largest pool of Hispanic drivers who will meet Star's qualifications live in Florida.

How has the increased cost in diesel fuel affected your company?

Tremendously. Two things made the sharp rise in diesel price dramatically impact our profits. First, the majority of our customer fuel surcharge formulas were based on the fuel economy Star's engines produced at the time we signed agreements. As we have updated our fleet throughout this year, the "environmental friendly" engine is becoming a larger percentage of our fleet. Even though these engines produce less harmful emissions, they have negatively impacted our truck's average mile per gallon. Also, the contract rates for our customers were calculated based on the cost per gallon at the time of the contract. While the fuel surcharge formula for the customer's revenue miles helps with the cost of diesel for their load, it does not cover any of the non-revenue miles (empty miles to and from customer locations) or our idle time. This cost has to be absorbed by Star or passed to the customer in the base rate.

How do you compare the Nashville transportation industry to that of Memphis?

Nashville and the surrounding counties are seeing an increase in truckload shipments - in and out. Memphis, historically and currently, has a larger imbalance than the Nashville area. There are many more outbound truckloads from Memphis than inbound. This limits our ability to grow this area because at the price of diesel, you cannot afford to run empty miles to pick up the Memphis outbound loads. We are constantly monitoring our appetite for these loads to try to reduce our empty miles.

How important is it that the local transportation industry has the Nashville Auto Diesel College?

Qualified mechanics are rapidly becoming as large a challenge to secure as quality truck drivers. The diesel college should help the pool, but we struggle at times to keep these positions staffed.

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