The cover story of the October 2009 edition of Forbes magazine features America’s 400 most wealthy people. Eight of 400 built their fortunes in the transportation industry. The eight are quite the motley cast of characters. I’ll share some highlights and sidelights, and their impacts on Canada.
Dennis Washington, $4.2 billion, Marine & Rail Transportation, Mining, Montana. With a net worth of $4.2 billion, Washington leads the pack of logistics moguls, and is the 61st richest person on the Fortune 400 list. He owns the largest tug and barge fleet in British Columbia. Washington also owns a large private estate on Stuart Island, British Columbia, including a luxury fishing lodge and golf course. He began his business career at age 30 in 1964, with a $30,000 loan and a single bulldozer.
Victor Fung & family, $2.6 billion, Li & Fung, Hong Kong. Despite the recession, outsourcing firm Li & Fung actually increased sales 25% in 2008. They supply clothes, furnishings, and toys to retailers including Disney, Abercrombie & Fitch, Coca-Cola, Wal-Mart, and Target.
Donald Schneider, $2.5 billion, Schneider National, Wisconsin. Schneider National is the US’ largest privately held freight carrier, with sales of $3.7 billion. Schneider managed to take market share from some smaller, struggling competitors during the recession. A Wharton MBA, he introduced a 60-mph speed cap on his fleet last year, in order to reduce fuel costs. In one of my Canadian Institute of Transportation and Traffic (CITT) courses, we debated the efficacy of speed caps. The general consensus of my colleagues is that speed caps actually increase total transportation costs: Savings on fuel are outweighed by an increased expenditure on driver hours, and other costs associated with delivery delays.
Stewart Rahr, $1.95 billion, Kinray, New York. Kinray is the world’s largest independent pharmaceutical and generics distributor. Rahr started Kinray after dropping out of law school. “Stewie Rah Rah, the #1 King of All Fun” adorns the wall of his office in Queens, NY. The business card he used this summer is a one-billion dollar bill, featuring a picture of Rahr with Donald Trump, Arnold Palmer and Bill Clinton. Now that’s original. Reminds me of Jeffrey Gitomer, who used to distribute a business card for his company’s mascot, which was his pet cat,”Leo.”
Fred Smith, $1.65 billion, Federal Express, Tennessee. Fedex is the world’s largest private shipping firm. The bulk of FedEx’s business is in the movement of courier packages, which is why everyone reading this article has heard of FedEx, though many outside the logistics industry will not be familiar with the other companies, which primarily distribute freight to manufacturers and retailers. A Yale grad, Smith envisioned an integrated network of planes and trucks in his senior thesis; he then launched FedEx in 1971. How about that! A thesis turned into a business plan! I published a thesis myself, though it has yet to yield $1.65 billion. Smith pioneered elaborate tracking systems, saying, “The information about the package is just as important as the package itself.”
William E. Conner II, $1.5 billion, Supply Chain Services, Hong Kong. Conner began working for his father’s company at age 12. He holds an MBA and law degree. With 35 offices in 20 countries, more than half of his business comes from women’s apparel and home goods, with the balance from textiles, lighting and other apparel.
Manuel Moroun & family, $1.3 billion, Central Transport, Michigan. Manuel is battling the Canadian Canadian government to maintain his priceless monopoly over the Detroit River border crossing. He owns the Ambassador Bridge, which is a channel for 25 percent of the commerce between the U.S. and Canada. The Bridge handles 8,000 trucks a day, and $100 billion worth of goods each year.
Johnelle Hunt, $1.1 billion, J.B. Hunt Transport Services, Arkansas. Johnelle is the widow of trucking titan Johnnie Hunt. With sales of $3.7 billion, J.B. Hunt is the largest U.S. public transportation company, serving the U.S., Canada and Mexico with over 10,000 vehicles.