Strong freight demand, tight capacity and a challenging driver market are existing trends in the trucking and transportation industry. To navigate the dynamic market, Tontitown-based carrier P.A.M. Transportation Services Inc. has Joe Vitiritto at the wheel.
On Aug. 18, Vitiritto joined P.A.M. as president and CEO after spending more than 25 years working in management and executive roles in the industry. The 50-year-old native of Carlisle, Iowa, a small town near Des Moines, didn’t take long to make an impact.
In January, the company reported a record fourth quarter in revenue and operating income. Revenue increased by 15.5% to $142.75 million, from $123.49 million in the same period in 2019. Operating income was $16.37 million, compared with an operating loss of $17.88 million in the same period in 2019.
“The freight market is fantastic, and it’s the best in my 27 years,” Vitiritto said. The market strength can be attributed to the tight capacity and stimulus money and the economic recovery from the COVID-19 pandemic. The company has worked with customers to take advantage of the market as it develops enough capacity to grow. Vitiritto said the company has room for improvement in the market.
He said the company could attribute nearly half its revenue to the automotive industry. The customers have a lot of the same number of loads each week. By comparison, over-the-road or irregular route customers might ship one load and may vary. Automotive customers generally provide a lower market rate because of load consistency, but this allows for better driver retention, Vitiritto said.
He explained the trade-offs with hauling this freight compared to taking advantage of the existing market. But the company looks to do both as nearly half of its trucks run irregular routes. The automotive freight is driven more by bids, with new offers set annually.
Vitiritto said the company’s first quarter was challenging because of weather and semiconductor supply issues. The latter has affected freight consistency, and the uncertainty of its end creates planning issues. But the freight market was strong, and he said he’s proud of the team’s accomplishments over the period.
It sets up an exciting year for the industry, and the second quarter has started strong, he said. Customers likely will struggle for capacity, while finding available drivers is a challenge.
“We’re working hard culturally on how we treat drivers,” Vitiritto said. “We’re also working hard with our customers to make sure that they’re getting paid. We can pay them more, and customers have been very willing because they understand the situation. We’ve had some success on the pay front, and we’re always looking to see if we need to do more. On the other side of that is focusing on turnover, making sure our driver culture is good, and working with our drivers is a key component to our success. And we’ve improved significantly there.”
Vitiritto’s top goals over the next three to five years are to reach $1 billion in revenue, run the trucking operation with an operating ratio in the low 80s and become an employer of choice for drivers and office workers.
He looks to make the business as healthy as possible and to continue to diversify. He said the company won’t do that by shrinking its automotive freight business but by growing everything else faster.
Vitiritto also sees the opportunity to grow the company’s cross-border business with the new trade agreement between the United States, Canada and Mexico. The pandemic has led more North American companies to think about their supply chains being closer to home.
Before joining P.A.M., Vitiritto was senior vice president of pricing and network design for Phoenix-based carrier Knight-Swift Transportation Holdings Inc. The 2017 merger of Knight Transportation and Swift Transportation created the company.
Vitiritto joined Knight Transportation in April 2003. His recent roles included senior vice president of operations — Swift transition team and senior vice president of human resources. Before Knight, he was terminal manager for Colton Carriers in Denver for nearly four years. He also was dedicated manager with Schneider National Inc. for two years. He started in the trucking industry in 1994 as a manager with Werner Enterprises Inc. He earned a bachelor’s degree in marketing that year from Iowa State University.
Initially, he wanted to work in sports marketing and had a job offer from the White Sox. However, he said his wife-to-be, Wendy, whom he’d met at Iowa State University, landed a better job with Frito-Lay in Council Bluffs, Iowa, east of Omaha, Neb.
“She told me if I was going to marry her, I needed to think about being in Omaha, not in Chicago,” he joked. “So I decided to move to Omaha and got a job with Werner right out of college and started my trucking career there.”
Vitiritto said his background has primarily included work in operations, but the roles became more diverse later in his career. After the Knight-Swift merger, his work was focused on the market side of the business, including customer service and pricing, he said. He was in charge of pricing at Knight-Swift for over the last year he worked there.
Asked why he remained for so long at Knight, he said the people, its leadership, the company’s “entrepreneurial spirit” and “consistent drive to always keep improving that was in the culture.
“The culture was really good, and the people were fantastic,” Vitiritto added. “I had the opportunity to work with the most influential leader in my career, Kevin Knight. In our industry, Kevin Knight is considered one of the best, if not the best. And I got to see it first-hand.”
‘THE RIGHT DECISION’
He explained the decision to join P.A.M. as one of the most difficult after working for a company for 17 years.
“Once you’ve been someplace for that long, you understand the business well and the culture, and you’ve made some good friends and like working with the people there and know what to expect,” Vitiritto said. “It was an excellent opportunity for me. When the Swift merger happened, it was exciting because I got to see something much larger and get to go work on it.
“When an opportunity like this comes up where you get to be a CEO of a publicly-traded company, you take pause for a minute and think about what your career aspirations were when you started and where do you stand today,” he added. “This is a great opportunity for me.”
He recalled a conversation with Kevin Knight and possibly the best compliment of his career.
Knight said: “‘Joe, I’m sad we’re losing you, but you’re ready for this. These jobs as CEOs of publicly-traded companies don’t come along very often,’” Vitiritto recalled. “And he said, ‘You’re ready for this, although we’ll miss you. You have to go do this, and you’ll do great.’”
“I was like, ‘Wow,’ to have a guy you’re leaving that you trust and appreciate his style and where he’s taken Knight and now Swift … I knew then I had made the right decision.”
The opportunity, P.A.M.’s good reputation and meeting chairman Matt Moroun were deciding factors. Vitiritto, who said he could learn a lot from Moroun, was ready for the challenge and needed an opportunity to try something different.