Monday, October 06, 2008
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Rail & Intermodal
 
Hub's Yeager Dies
10/6/2008
John D. Boyd
Associate Editor

As a boy in Bellevue, Ky., Phillip C. Yeager lived through the Great Depression and sometimes earned a nickel or a doughnut for delivering meat from his family's butcher shop.

It was the start of a life in delivering goods, but for Phil Yeager, the scale grew far, far greater.

When he died last week at 80, from complications after a recent heart attack, he was chairman of the logistics giant he had formed, Hub Group of Downers Grove, Ill., near Chicago. It had more than $1.6 billion in 2007 revenue and bragging rights as the nation's largest intermodal marketing company.

In between, Yeager earned an economics degree in 1951 from the University of Cincinnati, went to work for railroads and, frustrated with that business, became a leading salesman for the new hybrid freight shipping mode, rail-truck intermodal.

Yeager formed Hub in 1971 with his late wife, Joyce, and did much to shape the continent's modern intermodal industry.

"The transportation community has lost one of its most ardent and influential leaders," said Joni Casey, president and CEO of the Intermodal Association of North America. "Phil Yeager was intermodalism incarnate."

"He was just a one-of-a-kind guy," said Thomas L. Finkbiner, an industry veteran and senior chairman of the University of Denver's Intermodal Transportation Institute.

Unlike today's bustling marketplace, when Hub was getting started "there wasn't the kind of acceptance of intermodal then by either shippers or truckers," said Finkbiner.

It was a specialty business mainly handled at either end of the trip by small firms, he said, and "Phil was the first one who went national, who came up with what was in essence a franchise idea" to handle an intermodal load from start to finish.

Yeager started his career with the Pennsylvania Railroad in 1952 in an era with scores of major railroads that focused on bulk shipments. Lack of good roads opened a market niche to sell distance truck hauls by rail, but rail service concerns also kept many away.

The blunt-spoken Yeager said later that he was just as frustrated as many shippers. "When I was with the railroad, I would never seem to get the top job," he told the ITI in a 1999 oral history interview. "I was always No. 2, and I'm a very competitive person, so this was not in my long-term plans, to be No. 2."

 

Yeager was with the Pennsylvania and Penn Central railroads for 19 years, and spent 12 in intermodal marketing before forming Hub. Despite its cost-saving potential, intermodal was a small player in the nation's freight system.

But Yeager made his mark and built his business. "His 'outside of the box' approach to traditional rail transportation services was the genesis of today's domestic intermodal product," said Casey.

"Phil was a marketing guy," said Finkbiner. "He made the changes that were needed to stay ahead of things. He's the one who changed with the times, and grew and survived and prospered."

For instance, in the "take or pay" world of railroads that usually tucked a few intermodal flatcars into a general merchandise train, Yeager booked lots of cars at a time. Then he would fill that space with truck cargoes to avoid paying for empty flats. "What Phil really did was he sold the concept of the unit train to the railroads," said Finkbiner.

He ran his own business with tight  discipline and expected others to share his work ethic. "I'm very results oriented," he said in the ITI history, "and I let the people know that. I expect people to do a job, and to work hard. ... You don't have to be a rocket scientist."

By 1985, Hub had offices in 25 cities. In 1996, Hub went public on the stock market, but the Yeager family stayed in command. Son David became co-chairman in 1992, and CEO in 1995. In 1999 son Mark became its president, and in 2004 was named chief operating officer.

Phil Yeager remained close to the business, however, and was as tough in assessing customers as he was in describing rail service. After Hub dropped General Motors as a contract customer in 2004, he told Traffic World, "They're hard to deal with. They don't like to pay their bills. They're slow to pay. If you're not making any money, why handle it?"

"He is characterized as a pioneer, which is certainly true, but my personal memories will be of a gracious mentor and thoughtful advocate of intermodal interests," said Casey. He was instrumental, she said, in joining three industry associations to form IANA.




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