Schwerman Trucking Co.
Schwerman Trucking Company was founded in 1913 by Fred Schwerman Jr. in Milwaukee, Wisconsin. Fred Jr. began operations by building his own truck to haul agricultural products to local markets. In the early years, the company hauled their customers’ goods to market on classic stake trucks. This was their primary business. While this was a good business to be in, Fred had bigger plans for his new company. He expanded the company into the road construction material delivery business. This move allowed Fred and his small group of employees to use his existing fleet to haul construction materials out to the construction sites.
Adding the road construction material delivery business offered a great opportunity to fight the seasonal lulls of hauling agricultural products. After expanding his business to haul road construction materials Fred soon realized the opportunity that road construction itself presented.
Once enough capital had been raised to support the addition of trucks, related assets, and personnel, Fred Schwerman Jr. and his son, Fred J. Schwerman began bidding on road construction jobs in Wisconsin. The road construction and related business proved to be very promising as the demand for more roads throughout the entire country grew.
Accordingly, Schwerman Trucking Company transitioned out of hauling agricultural goods and into the various aspects of the road construction business. At approximately the same time as the business focus transition, the United States became involved in World War II.
As a part of the war effort, many manufacturers in the Midwest began manufacturing various war goods. While road construction offered good business opportunities, Schwerman Trucking dedicated a large part of its fleet to hauling bomb casings for A. O. Smith. The bomb casings were taken from A. O. Smith to a manufacturer that assembled the entire bomb before it was shipped off to the Allies. It was during World War II when Fred J. Schwerman joined the military.
Tragically, the very next day Fred Schwerman Jr. suffered a heart attack and was unable to continue running his company. Military officials decided Fred J. Schwerman could best serve his country by running the family business and continuing to haul bomb casings for A. O. Smith.
Fred J. Schwerman had gained valuable experience working with his father. He was able to apply the lessons learned and used his experience to create an effective leadership role for himself.
Later during World War II, Fred J. Schwerman pioneered one of the biggest innovations in the dry bulk transportation industry. He designed and built the first enclosed screw tank trailer. Up to this point in time, dry bulk products such as cement had been hauled across the country via rail cars and over the road in individual packages.
The design was given to Trailmobile, a trailer manufacturing company, and the new trailers revolutionized the transportation of dry bulk cement. These screw tank trailers offered the dry bulk transportation industry the ability to load quickly and directly out of the cement silos, deliver directly to the construction site, and unload at a much faster pace. The screw tank trailer sparked more trailer innovation as the first pneumatic trailer was made available to transport cement. Pneumatic trailers used air to convey the product which is more efficient, faster, and still the method to load and unload cement today.
In 1956, President Eisenhower signed the Federal Highway Act with the goal of constructing hundreds of new highways. The cement and dry bulk transportation industry experienced explosive growth. Taking advantage of the growth, Fred J. Schwerman opened new terminals and expanded the company throughout the eastern half of the United States.
Fred J. Schwerman took the company public in 1965. The funds gathered from going public were used to purchase Petroleum Carrier Corporation, a liquid bulk hauler. Fred and his management team chose to diversify into the liquid market to gain a more consistent business and to reduce the impact of the seasonal and cyclical nature of the dry bulk industry.
The transition into hauling liquid chemicals was made smoothly because Schwerman Trucking already operated a large network of terminals in the eastern half of the United States. This network of terminals enabled the company to hit the ground running and expand its liquid operations into new markets. The new liquid chemical business complemented the dry bulk business nicely, and, throughout the seventies, Schwerman Trucking Company kept expanding to take advantage of the seemingly endless demand.
By 1978, Schwerman Trucking Company was the third largest bulk transporter in the United States. Business was booming but what was unknown to Fred and his management team, was a perfect storm had been brewing that would prove to give the company the toughest test it had ever experienced.
Many factors came into play to land Schwerman Trucking Company in hot water. In 1980, the United States fell into a recession and the economy became very slow. High interest rates added to the pain felt by businesses across the country. In an effort to jumpstart the economy, President Ronald Reagan deregulated many industries, including the trucking industry. The deregulation of the trucking industry dropped the requirement that all carriers have their rates approved by the Interstate Commerce Commission. This increased the amount of competition in the industry.
The decline of overall business due to the recession and deregulation came just months after Schwerman Trucking Company had expanded into Virginia, Florida, and Texas. As a result, Schwerman Trucking Company was in a highly leveraged position when it saw its revenues decline.
Management found itself in a situation where there was simply not enough cash to support the amount of debt accumulated throughout the expansion years. The company’s financial condition was deteriorating while management desperately searched for business opportunities that simply did not exist. Tragedy struck the company on a cold night when Fred J. Schwerman died of a heart attack in his sleep.
Fred J. Schwerman’s son, Jack Schwerman was thrust into a leadership position at the young age of twenty-nine. Together with his uncle, Carl Schwerman, the two formed an action committee in an attempt to salvage a company that had severe financial issues. Schwerman Trucking Company was in such dire straits that management was forced to auction trucks at deep discounts just to raise the cash necessary to meet their short term liabilities.
While these liabilities had been met, Jack Schwerman and the action committee made some hard decisions on what to sell and what to keep. Only the most profitable terminals and operations made the cut. Slowly but surely, Schwerman Trucking Company turned the corner and returned to profitability. Many other trucking industry titans weren’t able to do the same in the tough economic times and were forced to file for bankruptcy.
Even through all of the hard times when the company’s financial statements indicated that all obligations could not be met, Schwerman Trucking Company always paid their bills. The fierce competitiveness and never-say-die attitude developed through the trying years became a core company value. Not only had Jack and his employees weathered the storm, but with his leadership, they became a very cohesive team.
Having earned unequivocal trust from creditors, Jack Schwerman was offered some financial flexibility to grow the company when once again Schwerman Trucking Company demonstrated its ability to consistently achieve an annual profit. As a sign of restored financial and operating health, Jack Schwerman led a majority equity share repurchase and returned Schwerman Trucking Company into the privately held, family owned company it was founded as.
Today, Schwerman Trucking Company is a member company of the Tankstar USA family of individually operated companies. Jack Schwerman is the president of Tankstar USA which was formed as a holding company in 1987 to provide cost savings through offering centralized corporate office processes for each individual company.
Schwerman Trucking Company proudly identifies itself as the oldest, most experienced dry bulk carrier in the United States. Schwerman Trucking Company employees are patriotic, hard working, honest professionals who have proved these values for over a century and continue to prove them today by safely delivering value in each and every load.