Don Daseke: ‘My Philosophy Is to Invest in People’
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Don Daseke likes to say he's been an entrepreneur "all my life." It began with a small carryout restaurant called Bill's Park-N-Eat that he took over from his father in his hometown of Crawfordsville, Ind., Later, it developed into a large publicly traded real estate investment firm, a telecommunications company called Sage Telecom and a business that imported teak hardwood from East Asia.
It wasn't until December 2008, at the age of 69, that Daseke agreed to buy his first trucking company, a decision that has led to what may be his boldest business venture of all. Over the past decade, Daseke has put together a company that now controls more than a dozen freight carriers and logistics firms, all specializing in flatbed and heavy specialized shipments.
Accelerators is Transport Topics’ new Q&A series with innovative leaders in trucking. In this, the inaugural edition, Daske Inc. CEO Don Daseke discusses how he found his way to the trucking industry, and how maintaining a balanced lifestyle away from the office helps sharpen his focus when he’s on the job.
Daseke announced the purchase of his first trucking company, Smokey Point Distributing, in December 2008 and finalized the acquisition early in 2009. Over the past decade, he has built a business that now controls more than a dozen freight carriers and logistics companies, all specializing in flatbed and heavy specialized shipments.
Q. Your path to the trucking industry is interesting, and unusual. Tell us about your background, and why you got into the trucking business.
A. By education I’m a CPA. And I’m a serial entrepreneur. I spent eight years with IBM, and then I started a real estate company [in 1974]. Eventually I took that company public. I sold that company in 2000 and was looking for other investments. A longtime friend who is an investment banker in Dallas said, “I’ve got this specialized trucking company for sale. Are you interested? It’s north of Seattle.”
And I said, “Well, I don’t know anything about trucking.” But since he is a longtime personal friend, I said, “I’ll go up there and meet the people.”
I went up and met the people at Smokey Point Distributing, and I really liked [them]. Including the CEO, who has been there since he was 19 years old. After doing some study on the company, I told him, “I’m going to buy this company. My philosophy is to invest in people and I’m investing in you.”
Don Daseke looks up to Berkshire Hathaway Inc.'s Warren Buffett because of how the CEO manages to acquire businesses that aren't for sale. Among Berkshire Hathaway's holding is BNSF Railway.
Q. Do you have someone in business who you consider a hero or mentor?
A. Warren Buffett, because he buys companies that are not for sale. Berkshire Hathaway was formed with the idea of adding companies with outstanding management teams and were very profitable, providing them with capital to make them even bigger and better.
And that’s what we’ve been doing.
Q. How do you convince companies that are not for sale to sell?
A. The easy answer is persistence. Ultimately, we convince them that we’re different than other companies. I read one article that said when private equity firms buy companies, 70% of the CEOs are gone within two years because [the buyers] start changing everything. And changing everything starts with eliminating jobs — eliminating people to make the business more efficient. We don’t take that approach. Typically we’re dealing with families that have been in the business for a long time and have loyal people working in all levels. And they care about those people. We tell these families that we care about your people, too, and we won’t eliminate a single job. And we say that your name is on the truck, and we won’t change that either.
We just celebrated the 90th anniversary for one of our companies, Hornady Transportation in Monroeville, Ala., which is being run today by the grandson of the founder.
Q. As an outsider coming into the industry, what do you like, or not like, about the trucking business?
A. I love the passion of the people to serve customers. We have one customer that we have served for 60 years and we’re the only trucking company they use.
We don’t profess to be the experts of dry van or refrigerated or bulk. But we know flatbed and specialized. So that expertise is really key.
Our average CEO has been with the company for 25 years. So they care about their customers. They care about their people. And we care about them.
My philosophy is that any well-managed company can always be better.
— Don Daseke
Q. I’ve heard you say that you don’t like how trucking attracts so many lawsuits.
A. We live in a litigious society. We will drive about 500 million miles this year and, of course, accidents happen — even if we do a great job training drivers, screening drivers and hiring drivers. If you’re a small trucking company, a really bad accident can put you out of business. We protect Daseke with a $100 million liability policy.
Q. What’s the biggest challenge you face today?
A. The biggest challenge for all trucking companies today is hiring qualified drivers. We get thousands of applications every month, but we want safe drivers. That screens out a lot. We want drivers that are drug-free, and that screens out more people.
We’re going to have to pay our drivers a lot more to get them to do this work in the future. I’d like to see our drivers take home $100,000 a year in five years. We’ve raised the pay of drivers a lot in the last couple of years, but we need to raise it even more.
Q. Your company has grown principally through acquisitions. Will that continue or do you see new strategies as the business matures?
A. Looking back on our growth, about 20% has been organic. For example, our first company, Smokey Point Distributing, is triple the size today than it was 10 years ago. It had 60 trucks then and now it has about 325 trucks.
Acquisitions are part of us. We’ve grown from nobody to the largest owner of flatbed and specialized equipment in the country. But we have a very small percentage of a highly fragmented industry. So we’re taking a pause in acquisitions this year. We’ll resume next year and continue growing both organically and by acquiring other outstanding flatbed and specialized companies.
Q. Are you satisfied with the company’s current profitability? Can more be done as the company grows?
A. My philosophy is that any well-managed company can always be better. We brought in a chief operating officer to help us get even better in operations. Chris Easter has been in the business for 30 years. He was in transportation logistics for the U.S. Army, a West Point graduate, got a Bronze Star in Desert Storm, was at Walmart for 12 years and he’s been CEO of a specialized transportation company.
So, he really knows the business. And he will, I’m confident, help us be even better in the future. One of our core values is to continuously improve.
Q. Can you say a bit more about how you approach the idea of continuous improvement? What’s important? How do you handle it?
A. Technology is part of that. We’re implementing technology so that we can see where our trucks and loads are, and take advantage of better optimizing our fleet.
We started Daseke Fleet Services a year ago. [Editor’s Note: Daseke Fleet Services is an equipment leasing and maintenance business.] Those folks are experts at optimizing purchases of diesel fuel, parts, tires, trucks and also the disposition of equipment at the end of its life. They lead collaborative teams that help us in safety and hiring and service to customers.
We’re also expanding our brokerage operations. Brokerage today is about $250 million of our business. We see a great opportunity to continue growing by brokering loads to qualified carriers when our trucks are full.
Daseke receives the Horatio Alger Award in May 2018. The honor, given by the Horatio Alger Association of Distinguished Americans, recognizes individuals who have attained success in their lives and careers despite modest beginnings. (Daseke Inc.)
Q. What would you like to see done or changed in terms of how the trucking industry is regulated?
A. We love the fact that electronic logs are implemented. That’s a giant step forward in safety. And it makes a uniform playing field for trucking companies.
We need to figure out a way to take advantage of young people that would be interested in trucking. And we need to take advantage of the military training of young men and women. It’s very illogical that young people can drive for the military and yet they can’t drive across state lines.
While there’s a lot of technology, most young people don’t see it that way. We have to get better selling trucking as an industry for opportunity and growth.
A lot of stories about driverless trucks seem to imply that drivers are not going to be needed in the future. That’s just misleading and, I think, plain wrong. It will be many, many years before there are trucks on the highways without drivers.
Just like when you go on an airplane, 99% of the work may be done by a computer, but you don’t want to be there without the pilot. We don’t want to be on the highway with a truck with 100,000 pounds of materials without a pilot or driver.
In our kind of business, flatbed specialized will be the last place where automation happens.
Ever mindful of employee relations, Daseke greets Lone Star Transportation Chief Financial Officer Kristi Williams. (Daseke Inc.)
Q. How do you feel about the way the U.S. government has handled infrastructure improvements?
A. As an American, I am appalled by the way political parties can’t or don’t work together, even when there’s a common objective to pass a bill or put in the money to make our highways and bridges safe and better.
We had the national will for the Interstate Highway System years ago. We need to do that again — and in a massive way all across the country.
Q. What can be done to change the system? Is it a matter of electing different people to public office?
A. [American Trucking Associations President] Chris Spear is a terrific leader and can get people together and to say, “We may never agree on every way of financing it, but let’s compromise and make a deal and get on with it.” I would hope that he could make a difference in the next couple of years and make an infrastructure bill a reality. It’s the right thing for America.
Q. What do you do when you’re not working?
My passion is adventure travel, which to me is hiking and bicycle trips all around the world. I’ve taken 55 trips over the years. It’s a healthy way to see the world and to meet people.
As I look back on things, I think that I got my brains from my mom and my persistence from my dad. I’ve used what they gave me to build Daseke, and part of what they taught me was to have a balance in life. You can’t be obsessed with your business, no matter how much or how hard you’re working. So when I’m away, I don’t check e-mail. I don’t call the office. I can go away with confidence that everything is in good shape and spend some time unplugging from Daseke and doing something healthy for my body and soul.