Monday, Jun. 09, 1997

THE COLORS OF MONEY

By DEBORAH SHAPLEY

In 1980, Roderick Bell, an Ohio state dropout turned businessman, bought two trucks as a tax write-off. Today Bell's firm, Texas American Express, shelters mainly profit. Sales are heading toward $12 million, and 80 freight trucks--whose colors range from salmon to emerald green to pink because employees can pick the shades they please--ply the roads from its modest base in Dallas to the Northeast and the West Coast. Bell is a success--and he has to work harder than ever to stay that way.

"We wouldn't be in this business if it weren't for deregulation," says Bell, who treats Texas American as a full-time job when he isn't looking after his insurance company, his used-car lot and his plastics-molding company. The barrier that had to be overcome was the heritage of the Interstate Commerce Commission, which opened routes only to trucker applicants who demonstrated need for the service, with, for example, affidavits from shippers. Carriers also had to show that their proposed haul would not harm other truckers' business, and the number of ICC licenses was restricted.

The Motor Carrier Act of 1980 defined the industry's road to deregulation. Since then, the number of truckload haulers such as Bell has multiplied about threefold, to nearly 60,000. The act also unleashed such new rivals as United Parcel Service to take away customers from the complacent. "If you look at the list of the 100 biggest companies in the business in 1979 before deregulation, today there are only nine or 10 left," says Thomas J. Donohue, president and CEO of the American Trucking Association.

Bell has been around too long to be called an upstart--and his isn't one of the 100 biggest firms--but he still goes flat-out to stay ahead of fierce competition. Says Bell: "Success is never guaranteed in our industry." Last year was the first in a decade that Texas American lost money; this year is profitable so far. It is one measure of how deregulation has helped both the consumer and the supplier that Bell charges 2[cents] or so less a mile for hauling than when he entered the business in the '80s. "Deregulation has taken $50 billion out of the cost of trucking services from 1979 to 1997," says Donohue. "As a result, we are spending 15% less to move the nation's goods by truck."

Technology is helping. Bell says his trucks need an overhaul only every 1 million miles instead of 300,000. They need an oil change every 30,000 miles instead of 10,000. In 1979 many trucks got 4 m.p.g.; now they average 7. Computers allow more timely, efficient service.

Competition is spreading off the interstates and onto state roads, where a federal law further deregulated trucking in 1995. Texas truckers were among the most protected. But now, for example, an operator from Oklahoma can poach on Texas locals' business. Bell says he has not tried to haul within his state "because we don't have a need." In other words, he's got all the competition he can handle on the interstate right now.

--Reported by Deborah Fowler/Houston

With reporting by DEBORAH FOWLER/HOUSTON