The leading US trucking company
Old Dominion Freight Line (ODFL) traces its roots back to 1934. Starting with one truck, Earl and Lillian Congdon established Old Dominion Freight Line in Richmond, Virginia. The founders transported common merchandise in and around Newport and Norfolk, and the trucking industry regulation in 1935 by the US Government opened the doors of expansion for the company.
Old Dominion in the early years
World War II fueled the freight transportation at the military bases in Newport News and Norfolk. Sensing an opportunity, ODFL jumped onto the wagon and cashed in on the new business line. However, after the war, the International Brotherhood of Teamsters, which unionized truck drivers and other workers during wartime, called for a strike. After negotiations, the founders decided to close down operations.
But 11 weeks after the strike, ODFL started operations as a non-union labor transportation company. After the death of Earl Congdon in 1950, his wife, Lillian, incorporated the company. In 1957, the company extended its operations to prominent markets in North Carolina and Southern Virginia. Then the company opted for the inorganic route to growth and acquired Bottoms-Fiske Truck Line in the early 1960s.
After this acquisition, ODFL expanded its footprint to the Northeastern and Southern US regions. This was done through the acquisition of Nilson Motor Express and White Transport, Star Transport, and Deaton Trucking.
After deregulation in 1980
The deregulation in the 1980s ushered in a new era of growth for the transporters. With this, the company extended services to Florida, Tennessee, California, Dallas, and Chicago. From 1985 to 1994, the company concentrated on the LTL (less than trucking) segment, focusing on building density and improving operating margins.
In 1991, the company was converted from a private to a public enterprise, and ODFL started intraregional service in the mid-Atlantic region in 1993. Beginning in 2000, the company acquired selected assets of Fredrickson Motor Express, Goggin Truck Line, and Skyline to increase its position as a super-regional carrier.
Old Dominion purchased Carter and Sons Trucking in 2005 and forayed into Nevada, Nebraska, Oregon, and Washington State. During those years, it focused on building density in existing areas throughout the US. In the same year, the company introduced direct service to Canada.
In 2011, Old Dominion started consumer household pickup and delivery services. The company also offers customers access, through agents or strategic alliances, to services in various international locations including Canada, Mexico, Europe, and China.
Investing in ETFs
The SPDR S&P Transportation ETF (XTN) has the highest exposure (~2.8%) among ETFs to Old Dominion Freight Line. The trucking and railroad sectors make up 22.2% and 13.0%, respectively, of the XTN’s portfolio. Other major logistics companies included XTN are FedEx (FDX), XPO Logistics (XPO), C.H. Robinson Worldwide (CHRW), and CSX Corporation (CSX).
In the next part, we’ll do a company overview of Old Dominion Freight Line.