The chop shop

[kscarbel2]

Sean Kilcarr, Fleet Owner  /  June 5, 2016

COO & executive VP: William “Billy” Hupp

Company: Estes Express Lines

Operation: National LTL carrier with a fleet of 6,819 power units and some 25,707 trailers

PROBLEM:

William “Billy” Hupp will tell you he followed the old-school trucking pathway of industry advancement—by starting out in an Estes maintenance shop. He worked  alongside Robey “Rob” W. Estes Jr., who went on to become the LTL carrier’s president in 1987 and who remains in that position today. The company was founded back in 1931 by W.W. Estes, Hupp’s grandfather.

That shop floor experience came in handy for Hupp when he found himself confronted with the issue of replacement parts for some of Estes’ older tractors a few years back.

A minor fender bender had left a vehicle in need of a new hood, so one of Estes’ technicians went online and found a perfect replacement for $1,500. Yet that replacement hood turned out to have an interesting history: It actually came from a tractor Estes had previously sold into the used-truck market. Paying money for parts that came from the fleet’s own trucks rankled Hupp a bit but fostered an exploration of how to extract the best value from the company’s older equipment.

“The trade-in value is always fluctuating on the used market,” he explains. There had to be a way  for Estes to get its money’s worth out of its older units.

SOLUTION:

The solution has proved to be simple yet more than a little unusual: an in-house “chop shop” staffed with Estes technicians who expertly strip down older trucks destined to be cycled out of the fleet for a range of spare parts. Some of those parts, however, are also marked for sale, as Estes found that often the individual pieces of a truck can be worth more than a whole unit put together, Hupp said.

“We keep some of the parts and sell some of them, especially the engine blocks, on eBay” as well as via other online marketplaces, he noted.

The program was so successful that Estes now operates two internal “chop shops” that also do double-duty configuring glider kits into tractors for its pickup and delivery (P&D) operations, Hupp adds.

“We do about 200 glider kits a year; it helps us put good trucks into our P&D service,” he explains.

Hupp points out that exploring new approaches to old problems is one of the ways Estes has managed to stay profitable as it’s grown from $100 million in revenue back in 1991, to $1 billion in 2004, and to over $2.28 billion last year.

“A lot of things are out of our control in this business; the only good thing is that our competition has the same challenges we do,” he says. “We remain family-owned, and we plow a lot of that money back into the company. And LTL service is still our bread and butter, our ‘mother ship.’ It still pays the bills.”

[Underdog]

Interesting counterpoint to the current UPS thread, which details entire useful trucks being crushed. I personally applaud Estes' thought process on this. Keep what you can use, and sell the rest. What's wrong with that, UPS?!?

[dogg rescue]

Even the military has figured out how to sell their used vehicles.

[HeavyGunner]

11 hours ago, Underdog said:

Interesting counterpoint to the current UPS thread, which details entire useful trucks being crushed. I personally applaud Estes' thought process on this. Keep what you can use, and sell the rest. What's wrong with that, UPS?!?

Yeah i didn't buy the liability issue that was brought up on the ups thread either. If there was that much liability in used vehicles and parts there would be know wrecking yards or used car lots.