The encyclopedia · Strategy & Leadership · Strategic decision · 1930–1970
Roadway Express made less-than-truckload freight pay with a terminal network
Roadway consolidated small shipments through terminals, turning LTL's high cost per pound into the industry's best margins.
Roadway Express
the move
Roadway Express was founded in Akron, Ohio in 1930 by brothers Galen and Carroll Roush with ten owner-operators, hauling its first load of tires from Akron to St. Louis. In the early years its primary market was less-than-truckload freight — shipments too small to fill a truck, which cost more per pound than full loads.
Roadway made LTL its focus in the early 1950s, charging sometimes three or more times the per-pound price of full loads while improving the odds of a return load. The model required terminals where small shipments were consolidated, so Roadway expanded its network from 60 terminals in 1958 to 135 in 1968, each run as its own profit center, and became the second-largest motor carrier in the United States.
why it works
- Terminals pooled many small shipments into full truckloads on trunk lanes.
- LTL pricing captured the service premium shippers would pay for less-than-truckload.
- Per-terminal profit tracking showed exactly which routes and customers paid.
- Regulation protected licensed routes, letting a disciplined network compound.
what transfers
Unprofitable small demand becomes profitable when pooled: build the aggregation point, then sell the service premium, not the transport.
what came after
Roadway's network made it an LTL industry leader for decades, later spawning Roadway Package System to take on UPS in small parcels. In 1995 Roadway Express was spun off as an independent company with about $2.2 billion in revenue, and it merged into Yellow in 2003 to form Yellow Roadway.
references
- Roadway Express, Inc. — Company History
- FreightWaves Haul of Fame: Roadway Express was an LTL leader for decades
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