Heartland Express Profile
Heartland Express, Inc. (Heartland), together with its subsidiaries, operates as a short, medium, and long-haul truckload carrier and transportation services provider.
The company primarily provides nationwide asset-based dry van truckload service for major shippers across the United States, along with cross-border freight and other transportation services offered through third party partnerships in Mexico.
The company continues to provide nationwide asset-based dry van truckload service for major shippers from across the U.S. and now including cross border freight to and from Mexico and the company’s consolidated average length of haul is approximately 400 miles. The company continues to focus on providing high quality service to targeted customers with a high density of freight in the company’s regional operating areas. The company also offers truckload temperature-controlled transportation services and Mexico logistics services, which are not significant to the company’s consolidated operations. Through the acquisition of CFI, the company now provides transportation logistics services across Mexico for the company’s customers and provide cross-border freight services for customer loads moving from the United States into Mexico and loads originating from Mexico into the United States.
The company utilizes third party service providers for all miles run in Mexico and to move freight across the U.S.-Mexico border while leveraging terminal locations in the U.S. and Mexico near the border to facilitate these moves. The company generally earns revenue based on the number of miles per load delivered and the revenue per mile or per load paid. The company operates its consolidated operations under the brand names of Heartland Express, Millis Transfer, Smith Transport, and CFI.
The company’s other terminals are located near major shipping corridors nationwide, affording proximity to customer locations, driver domiciles, and distribution centers.
The company continues to focus on providing quality service to targeted customers with a high density of freight in the company’s regional operating areas. In addition, the company continues to evaluate and explore different driving options and offerings for the company’s existing and potential new drivers across the company’s unique mix of driver offerings across Heartland Express, Millis Transfer, Smith Transport, and CFI.
Operations
The company’s operations department focuses on the successful execution of customer expectations and providing consistent opportunities for the company’s drivers, in conjunction with maximizing equipment utilization. These objectives require a combined effort of marketing, regional operations managers, and fleet management.
The company’s customer service department is responsible for maintaining the continuity between the customer’s needs and the company’s ability to meet those needs by communicating the customer’s expectations to the fleet management group. Collectively, the marketing and operations groups (customer service and fleet management) are charged with developing customer relationships, ensuring service standards, coordinating proper freight-to-capacity balancing, trailer asset management, and daily tactical decisions to match customer demand with revenue equipment availability across the company’s entire network. Fleet management assigns orders to drivers based on well-defined criteria, such as the United States Department of Transportation (the ‘DOT’) hours of service (‘HOS’) compliance, customer requirements, equipment utilization, driver ‘home time’ and other driver needs, limiting non-revenue miles, and equipment maintenance needs.
Fleet management employees are responsible for driver management, development, and retention. Additionally, they maximize the capacity that is available to meet the service needs of the company’s customers. Their responsibilities include meeting the needs of the drivers within the standards that have been set by the organization and communicating the requirements of the customers to the drivers on each order to ensure successful execution.
Serving the short-to-medium haul market permits the company to use primarily single rather than team drivers and dispatch most loads directly from origin to destination without an intermediate equipment change other than for driver scheduling purposes. During 2023, approximately 70% of the company’s loads were less than 500 miles in length of haul.
The company operates thirty-one terminal facilities throughout the contiguous U.S. and one in Mexico following the CFI acquisition, in addition to the company’s terminal and corporate headquarters in North Liberty, Iowa. These terminal locations are strategically located to concentrate on regional freight movements generally within a 500-mile radius of the terminals. This allows the company to meet the needs of its customers in those regions while allowing the company’s drivers to primarily stay within an operating region which provides them with more ‘home time.’ This also allows the company opportunities to service and maintain revenue equipment across all subsidiaries, at the company’s facilities on a frequent basis.
Personnel at the individual terminal locations manage these operations based on the overall corporate operating and maintenance goals and objectives. The company’s CODM evaluates the operational efficiencies of the company’s transportation services and operating performance of terminals on a combined basis based on consolidated operating ratio and reports detailing all of the company’s load movements, rate per mile, and non-revenue miles. The company’s reporting units operate centralized computer networks within their respective operations and regular communication to achieve enterprise-wide load coordination. The company is actively working to better integrate computer networks across reporting units.
The company emphasizes customer satisfaction through on-time performance, dependable late-model equipment, and consistent equipment availability to meet the volume requirements of the company’s customers. The company also maintains a trailer to tractor ratio that allows the company to position trailers at customer locations for convenient loading and unloading. The freight the company transports is predominately non-perishable and does not require driver handling. These factors help minimize waiting time, which increases tractor utilization and promotes driver retention.
Customers, Marketing, Safety and Diversity
The company seeks to transport freight that will complement traffic in its existing service areas and remain consistent with the company’s focus on short-to-medium haul, regional distribution markets, and cross-border freight to and from Mexico.
The company targets customers with multiple, time-sensitive shipments, including those utilizing ‘just-in-time’ manufacturing and inventory management. In seeking these customers, the company has positioned its business as a provider of premium service at compensatory rates, rather than competing solely on the basis of price.
The company’s primary customers include retailers, manufacturers and parcel carriers.
Seasonality
The company operates in a cyclical industry, within any given year there is also seasonality to typical freight patterns. The company’s tractor productivity decreases during the winter season because inclement weather impedes operations, and some shippers reduce their shipments after the winter holiday season. In addition, many of the company’s customers, particularly those in the retail industry where the company has a large presence, demand additional capacity during the fourth quarter (year ended December 2023), which limits the company’s ability to take advantage of more attractive market rates that generally exist during such periods.
Regulation
The company is a common and contract motor carrier regulated by the DOT and various state and local agencies. The company operates under DOT authorities respective to the company’s four individual operating brands.
The company’s drivers and independent contractor drivers also must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and HOS. Other agencies, such as the Environmental Protection Agency (‘EPA’) and the Department of Homeland Security (‘DHS’) also regulate the company’s equipment, operations, and drivers.
The DOT, through the Federal Motor Carrier Safety Administration (‘FMCSA’), imposes safety and fitness regulations on the company and its drivers, including rules that restrict driver HOS.
History
Heartland Express, Inc. was founded in 1978. The company was incorporated in 1979.
