published Wednesday, May 18th, 2011

Parker keeps Covenant through bumpy roads over 25 years

Covenant Transport Chairman David Parker speaks to his employees during a stockholders meeting Tuesday. Staff Photo by Jake Daniels.
Covenant Transport Chairman David Parker speaks to his employees during a stockholders meeting Tuesday. Staff Photo by Jake Daniels.

DID YOU KNOW?

* David Parker, Chairman and CEO of Chattanooga-based Covenant Transport, is step brother to Max Fuller, co-chairman of Chattanooga-based U.S. Xpress, a competitor.

* The two, along with U.S. Xpress co-chairman Pat Quinn, worked together at Southwest Motor Freight under Max Fuller’s father Clyde Fuller, a car salesman turned trucking magnate who pioneered the cross-country, 48-hour team drive.

* Covenant is publicly traded on the Nasdaq; U.S. Xpress delisted and went private at the end of 2007.

* Covanant has attempted to stay the course with long-haul trucking, while U.S. Xpress has diversified into rail and other methods of transportation.

Source: Covenant, U.S. Xpress

David Parker, outspoken chairman and CEO of Covenant Transport, founded his company at age of 28 with his wife, Jacqueline. It was a leap of faith.

“I was scared, because I was 28 years old and I was signing a $1 million line of credit,” he said Tuesday at a company stockholders meeting.

Over the last quarter-century, the Parkers have grown the Chattanooga-based trucking and transportation interest into a $600 million-a-year corporation with about 5,000 employees, roughly 3,100 tractors and more than 8,000 trailers.

Parker has steered it through economic downturns and gas rationing while developing a reputation as an unabashed Christian in a dog-eat-dog industry.

“It’s been a long, hard, joyful, wonderful emotional ride for the last 25 years,” he said.

Like the trucking industry as a whole, Covenant has experienced its fair share of ups and downs, made all the more visible because the company is publicly traded, said Joey Hogan, senior executive vice president and chief operating officer.

“A lot of people wrote us off, but we’re still here,” he said. “It’s the worst recession since the Great Depression, so for our organization to still be here and better than ever; that’s been rewarding to me.”

A long road

At a ceremony to honor Covenant’s 25th year in operation, Parker told attendees the story of how a California earthquake once saved his company.

“I’ll never forget having my credit cards maxed out,” he reminisced with a smile. It was common during that period to find himself “getting a hold of the bank at 10 a.m. to find out how much money we had to come up with by 2 o’clock in the afternoon.”

Around the same time, a 1989 temblor known as the World Series Earthquake hit San Francisco and took out a Union Oil tank farm there, he said.

“For two weeks, we never got a fuel bill,” Parker said. “It probably brought us back.”

In 2010, the company achieved profitability for the first full year since 2005, even while weathering increasing regulatory expenses, rising fuel costs and slipping demand for goods.

The five-year period during which the company lost tens of millions of dollars was one of the hardest in Parker’s life, he said. But he isn’t ready to declare victory yet.

“We’ve definitely turned the corner, but it’s a slow recovery,” he said. “Just when you think you’ve got some momentum, fuel prices go up.”

Shares of Covenant Transport hit a low of $1.60 in 2009, but the company’ stock has since risen to $9.34 at the market’s close on Tuesday.

At its peak in May 1998, the stock traded as high as $21.90 per share.

The company made $3.3 million in 2010 off $546 million in revenue, compared with a loss of $25 million the prior year, and losses of $53 million and $16 million in 2008 and 2007, respectively.

“The [trucking] industry’s been struggling the last couple years, just like everyone else,” Parker said.

Hoop-jumping

Parker’s job has been made harder by recent regulations that the federal government has said should increase safety and fuel economy.

“Our truck costs have gone up $30,000 in five years,” he said. “When there was more supply than there was demand, they’re raising the cost of operating. It drives me crazy; it’s definitely anti-business.”

The recession forced Covenant to retool its profit model to survive, seeking out new sources of revenue and finding ways to widen minuscule margins. But rules governing the number of hours drivers can work per day, and black boxes that track truckers’ locations are threatening the recent gains Parker has made by tightening the company’s belt in other areas, he said.

Even through the chaos of fighting shrinking margins on one side and regulators on the other, Parker hasn’t lost sight of why he founded the company in the first place, said his son, Jonathan.

Jonathan Parker works in Covenant’s body shop, which he’s been doing off and on since age 13, he said.

“It really is about the faith,” the younger Parker said.

Parker has given large amounts of money to community and religious organizations in Chattanooga and across the country, which is part of the reason for Covenant’s existence, Jonathan Parker said.

His father has said that he founded the company after a week of praying, and having a conversation with God at Fall Creek Falls.

“We have a responsibility to the community, that’s the core of what being a Christian is,” Jonathan Parker said. “The business is sort of an extension of that.”

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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patriot1 said...

Great article....I have some of their stock and I'm long!!!

May 18, 2011 at 2:20 p.m.
vw2slow said...

This article is biased bull@!%$. I worked for this company for one month, at which time, my trainer fell asleep at the wheel, wrecked, and almost killed me. Did Covenant Transport Take care of me? Let me go home and rest and heal up? NO! They tried to hold me hostage at their nasty "training facility" which is really an abandoned Holiday Inn. I sat there for a week with a broken femur bone, being treated as if I was the one who wrecked their truck. It wasn't until I got a good Tennessee lawyer that I found out they couldn't legally tell me that I had to stay there if I wanted to get medical treatment, so I went home. After I healed they fired me, so I would have "lived" at their "hotel" for a year, had I complied, only to get fired at the end. They wanted me to work for minimum wage shuffling papers while healing as well.

These people claim to be Christian, but they didn't seem very warm and loving to me. I felt abandoned, tricked, fooled, anything but loved or taken care of. I'm not one of those idiots out there who dig their own graves either, I was actually on the road to becoming a good employee. If you believe this bullsmack about how amazing this company is you are dead wrong.

I tried to talk to Joey Hogan while I was having issues and everyone told me that I wasn't allowed to talk to him, despite his "open door" policy.

By the way, if you don't believe me, go to Rip Off Report.com and type in Covenant Transport. There is a steady influx of new victims with horror stories. They make a good portion of their money accepting government subsidies for training people that they fire so they can hire more people to train and get more subsidies, then they pay everyone bottom dollar compared to other trucking companies.

Be advised, LOOK ELSEWHERE FOR A GOOD STOCK TO HOLD.

Try Macquarie Infrastructure Company. MIC. Much better bet. Good luck!

May 27, 2011 at 10:30 a.m.

I first heard David Parker speak at a Worship Chattanooga event a few years ago. I was inspired by his message, and thrilled to find out that such a man as this was leading an effort to help Chattanooga turn to God, partly through The Nehemiah Project that he started. I believed David was going to greatly help our city, and felt led by the Holy Spirit to add him to my daily intercessory prayer list.

I attended a class David taught, "Putting on the Armor of God" (Ephesians 6:10-17), and there I determined that he is indeed a sincere, knowledgeable Christian brother, who has been wonderfully refined by the Lord in the Lord's furnace, and that basically, David just wants to do good. Because of his testimony and encouragement, I have been applying his teachings in my daily prayer life, and I believe that this has been a substantial part of the reason I have been significantly more victorious, in Christ, since that class. I never imagined that night years ago that David would end up helping me turn closer to God in such a direct manner.

I believe God chose to bless Chattanooga by having David start Covenant Transport, and that this is one of the ways God is funding David's ministry in the Kingdom of God, and this is one reason I am in covenant with Covenant Transport. I believe his best days; as well as Covenant's, are in their future.

Now is the time for David to know that the series of 3's God put in his life points him to Jeremiah 33:3, "Call to Me and I will answer you and show you great and mighty things, fenced in and hidden, which you do not know (do not distinguish and recognize, have knowledge of and understand)." (Amplified)

May God continue to richly bless David Parker and Covenant Transport.

Have a Blessed Day, in Christ,

June 1, 2011 at 3:02 a.m.
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