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May 08 97 international capabilities, Koch Companies has grown and changed dramatically. Some things, however, remain the same. One of the business lines at Koch (pronounced “cook”) remains those same hardware products it was founded on, and KochCompanies As Keith Regan learns from director of operations Mark Davis, Koch Companies remains a family business and treats its customers and employees accordingly From its roots as a local distributor of chain, cable, and other hardware products in the 1950s to its status today as a diversified transportation and logistics concern with a 48-state truckload carrier division, a truck leasing division, and Drivingforward

the second generation of the Koch family is at the helm. “The fact that we’re still family owned means we’re able to maintain that approach toward the customer,” says Mark Davis, the company’s director of operations. The company’s trucking fleet is growing rapidly—it stands at about 750 trucks today, a number that will likely double within five years—but the same attention is paid to new customers as to those who have been with the firm for decades. “No one will become just another load of freight to us.” While almost half of the Koch trucking business is made up of dedicated fleets pledged to major retailers (including one major discount chain based in Minneapolis), food companies and others, it is growing its independent trucking fleet rapidly, spotting opportunities to use its focus on customer service and its expertise to pick up business from competitors. “We can provide a different level of service than what other larger carriers might be offering today,” Davis says. To keep up with growth, Koch is rapidly building out its fleet, using the relatively soft demand for both trucks and trailers to get favorable pricing on new equipment from manufacturers eager to keep their own factories running in lean times. “We’re adding to our fleet every week,” Davis adds. The trucking and transportation business faces its share of challenges, and Koch has taken a proactive and entrepreneurial approach to meeting them. For instance, while hiring qualified, quality drivers is often cited as a major hurdle for trucking companies, Davis says the company is able to find plenty of solid, reliable employees to help fuel its growth, in part because many competitors are currently downsizing. “We’re not having any problem attracting drivers to our company.” Davis lauds the work of the company’s recruiting division with targeting its efforts and says drivers are attracted to working for Koch because of the culture and work environment, which includes a high percentage of home time and a fleet almost exclusively made up of trucks and trailers that are less than two years old. In fact, for a time during late 2007 and early 2008, Koch was hiring drivers faster than it could add trucks to its fleet. It leased vehicles until its own new equipment arrived. “We don’t have the highest pay package, but the way we look at is that all the rest of us— the dispatchers, the sales people, myself—are here because of the drivers. They’re what makes things happen, so as long as we maintain that attitude, we’ll continue to be able to grow.” Another major challenge, especially today, is rising fuel costs. Koch has worked hard to maximize efficiency in response to recent spikes in diesel fuel prices and provides incentive bonus payments to drivers who meet or exceed targets for miles per gallon averages and idle time reductions. Everything from how aerodynamic a rig is to the tire pressure is scrutinized on each truck as well. While Koch has yet to make a decision to embrace biodiesel or other alternative fuel sources, those options may get another look if fuel prices continue to rise. Technology may also offer ways to find savings that can help offset those unavoidable cost increases. Koch aggressively uses software tools where it thinks they can add value. It is currently exploring the adoption of a program that will send an alert to dispatchers if a truck runs outside of the most efficient route and through GPS tracking can give a real-time look inside a moving truck with details such as average speed. Another program being ramped up will help the company maximize its network by quickly identifying locations where it often runs low on trucks or where it is running legs with “We conduct what we call a no-fault autopsy. We take all the blinders off and go into it with no preconceived notions. The clearly defined rule of the group is that we’re not here to hang anybody” 98 May 08