School Bus Contractors

SBF's 2004 School Bus Contractor Showcase

Posted on March 1, 2004

Durham School Services

Austin, Texas

Fleet composition: 8,300 school buses
States operating in: 20
Students transported: 275,000
School district contracts: 275-plus
Company head: John A. Elliott, president and chief operating officer
Phone number: (800) 950-0485

What's your company's outlook for the 2004-05 school year?
As always, because safety is a part of anything we do, we will continue to look for innovative ways to improve our well-regarded safety training, hiring practices and preventive maintenance processes. The competitive landscape is an area in which we will focus. We will continue to grow the market by convincing more districts to privatize their transportation needs. This is a slow process, especially when you are offering a premium product. The good news is, after a district outsources a program with us, they are always eager to tell me that they don't know why they struggled with transportation so long. We simplify their transportation challenges.

What's been the most positive aspect of this school year thus far?
We have seen a significant improvement in driver retention. We are also very pleased with our renewal rate.

Are school district budgets returning to normal?
Current budgets are definitely reflecting the impact of reduced revenues and include subsequent reductions in home-to-school transportation, as well as extracurricular trip services.

How have you managed costs this year? Have you been able to reduce overhead?
At Durham, we strive for excellence through a partnership with our employees. So, we ask all of our operating personnel to share ways they think we can work smarter, minimizing costs, and still reach our goals. With this process of getting feedback from the front lines, together with our national purchasing power, we are able to effectively manage our costs.

Have you seen any changes, positive or negative, in the employee labor pool?
Driver availability is very constrained in a number of geographic areas. However, this issue does not appear to be as widespread as the shortages that existed four or five years ago. On the management front, retention has been good, however, attracting new entrants into the profession is a challenge at times.

What's your company's greatest strength?
In terms of what sets us apart from our competitors, I think there are three primary things — our unique safety culture, our emphasis on people and our strategic focus in terms of how we grow the business.

There is no doubt that safety is part of anything we do. We are passionate about safety, and it shows — in our stringent hiring processes, innovative training, maintenance practices and much, much more. We have a long history of doing some things not because we have to, but because we believe they are the right thing to do.

Another area where we excel is our emphasis on people. We know it doesn't matter how good your equipment is — if we have the wrong person behind the wheel, we won't be successful. That is why we are so picky about who we hire.

The last and most significant difference is our approach to business development. We focus on developing relationships with customers that we believe want to have a working partnership.

Questions answered by John A. Elliott {+PAGEBREAK+}

Elk Transportation Services

Manor, Texas

Fleet composition: 350 school buses
States operating in: 5
Students transported: 22,000
School district contracts: 10
Company head: Karl Smith, president
Phone number: (866) 832-4900

What's your company's outlook for the 2004-05 school year?
Things are looking good for us. We hope to expand our operations into other states for this coming school year. If we can accomplish this, we'll purchase a few hundred more school buses. Currently, we've got school transportation contracts in Texas, Louisiana, Arizona, New Mexico and Oklahoma.

What's been the most positive aspect of this school year thus far?
The amount of positive response we're receiving from our customers and prospective customers. I've been talking with 15 school districts about providing transportation service to address their various needs. It's very encouraging.

Are school district budgets returning to normal?
No, school budgets are still pretty tight. School districts are focusing on the classroom and things like athletics, and school bus transportation has been put in the background. We’re never one of the high priorities when it comes time to look at the budget. However, having said that, we believe things will loosen up next year, and more money should be available.

How have you managed costs this year? Have you been able to reduce overhead?
It's been tough. We continue to see increases in insurance rates and fuel costs. That definitely takes a toll on our cost accounting. We're also seeing increases in labor costs. Keeping costs down for the past few years has been a real struggle. We're just hoping that the 2004-05 school year will not present as much of a challenge as this year.

Have you seen any changes, positive or negative, in the employee labor pool?
Most of our drivers have been with us since the beginning, so we’ve been lucky there. But we still have a lot of people coming in and applying for driving positions. The problem is that only one out of 10 applicants actually ends up being hired. We do background checks, and that keeps some of them from making it through. Others drop out during the classroom and behind-the-wheel training, which can last up to three weeks. We get a lot of driver applicants who are truck drivers, but they don't understand that driving a truck and transporting schoolchildren are two different things.

What's your company's greatest strength?
We have safe, courteous drivers who put passenger safety first. And we are good about delivering kids to their schools on time. Also, we've got a great staff of mechanics to service our fleet, which includes 19- to 71-passenger buses. We use school buses instead of expensive charter/motorcoach buses to keep our customers’ transportation costs affordable. We've been in business since 1990 and are continuing to grow.

Questions answered by Karl Smith {+PAGEBREAK+}

First Student Inc.


Fleet composition: 16,000 school buses
States operating in: 34
Students transported: 1 million-plus
School district contracts: 375
Company head: Bruce Lyskawa, president
Phone number: (800) 844-5588

What's your company's outlook for the 2004-05 school year?
Our new outlook is to implement even more innovative ideas and solutions for our customers. For example, we are currently using a product from J.J. Keller & Associates called “Driver Management Online.” This automated employee tracking system powers our safety initiatives while saving the company time and money. These savings can then be passed along to our customers. The tracking system also allows us to pull records for any driver nationwide with the touch of a button. The records include driver qualifications, employee drug test results, employee training updates, accident tracking, etc. With this cutting-edge program, First Student managers can create electronic files and records and then manage the data in those files in ways that boost efficiency and simplify processes.

First Student is also proud to be implementing GPS tracking systems and digital video cameras within districts that have a need. We aim to stay intelligent about the technologies available today and at the forefront of these efforts.

What's been the most positive aspect of this school year thus far?
The most positive trend we’ve seen this year is value. Our team has been able to aid many customers with their budget emergencies. Money that was saved in transportation costs by working with First Student was returned to the classroom for educational purposes. This is something that makes our job extremely rewarding.

Are school district budgets returning to normal?
I don’t believe they are, since we have definitely seen a decline in dollars available for all transportation needs.

Have you seen any changes, positive or negative, in the employee labor pool?
The labor pool has certainly grown larger this year. Acute driver shortages have declined for us, which is a trend we attribute to the current economy. Our national recruitment team has also developed and implemented solutions to ensure proper hiring and training efforts across the country. This keeps all of our locations fully staffed with high-caliber people at all times.

What's your company's greatest strength?
I have always maintained that our greatest strength lies within our employees. First Student’s managers are empowered to use corporate resources and make decisions at the local level so our customers receive fast responses to concerns. I truly believe that reacting quickly to a customer’s needs is crucial. This is where we show one of our strongest delineators as a team and a company.

Questions answered by Carey Paster {+PAGEBREAK+}

Krapf Bus Co.

Exton, Pa.

Fleet composition: 850 school buses
States operating in: 2
Students transported: 65,000
School district contracts: 11
Company head: Dale Krapf, chairman of the board; Dallas Krapf, president; Blake Krapf, chief operating officer
Phone number: (610) 594-2664

What's your company's outlook for the 2004-05 school year?
We have a number of internal initiatives (such as revamping our maintenance procedures, improved staff and driver training and some restructuring) going on that we would like to complete. In addition to completing these initiatives, we would like to do some controlled growth where we don’t compromise our standards and quality of service.

What's been the most positive aspect of this school year thus far?
We acquired two new contracts that fit our growth objectives very well. These new contracts potentially open up a new market for us to pursue in the future.

Are school district budgets returning to normal?
From my perspective, no, school district budgets are not returning to normal. It appears that their resources are as tight as ever.

How have you managed costs this year? Have you been able to reduce overhead?
Economically speaking, times are tough. We continue to face double-digit increases in insurance annually. Vehicle costs continue to increase. The labor market continues to be tight, so that adds additional increases to our labor costs. Most recently, fuel costs have increased substantially. In times like these, there are no sacred areas. Every line item of our budget is subject to scrutiny. We have to take a look at all expenses, take advantage of economies of scale and efficiencies where they are available and try to be smart about all of our decisions. The real challenge is doing all of these things without sacrificing our quality of service.

Have you seen any changes, positive or negative, in the employee labor pool?
Recently, we have seen slight positive changes in the employee labor pool. However, about eight months ago, the Pennsylvania Department of Transportation changed some of the regulations surrounding the licensing procedure for new drivers. These more stringent regulations have increased the waiting period to train and place a new driver to around 40 or so days. This obviously has had an adverse impact on our ability to hire, train and assign a new driver.

What's your company's greatest strength?
First and foremost, our greatest strength is our employees. We have an outstanding bunch of dedicated, professional employees. Without them, we would not be able to accomplish our goals. Second, we are in our third generation of family leadership, which helps keep us focused on our core values and our vision to “provide the best passenger transportation anytime, anywhere.”

Questions answered by Blake Krapf {+PAGEBREAK+}

Laidlaw Education Services

Naperville, Ill.

Fleet composition: 40,347 school buses
States operating in: 37
Canadian provinces operating in: 6
Students transported: 2 million
School district contracts: 1,030
Company head: Hugh MacDiarmid, president and CEO
Phone number: (800) LAIDLAW

What's your company's outlook for the 2004-05 school year?
The marketplace continues to be very aggressive from a competitive standpoint, with most everyone looking for the same piece of the pie — full-service contracting. We believe that to expand our opportunity for growth, we need to pursue school districts that aren’t looking to do a full-service conversion from public to private. However, they may be interested in contracting with us for one or more related services — like vehicle maintenance or safety training. This concept of “unbundled services” focuses greater attention on the true needs of the customer and positions us to fulfill their unmet needs.

What's been the most positive aspect of this school year thus far?
This has been an outstanding safety year for Laidlaw Education Services. All of the major indices we use to measure our safety performance are showing positive results. At the core of our values as a company is our Unwavering Commitment to Safety. It is always rewarding to see the tireless efforts of our dedicated safety staff really make a difference.

Are school district budgets returning to normal?
Not that we’ve seen. Funding is still tight, and many districts across the country continue to identify ways to cut costs. Unfortunately, some of them have chosen to cut back or eliminate transportation, forcing their children into less safe modes of travel to and from school. That’s the most concerning outcome of the continuing funding crisis.

How have you managed costs this year? Have you been able to reduce overhead?
We continually review ways to minimize our cost of doing business. In an aggressive marketplace like today, we must do everything in our power to remain competitive. We constantly monitor how we utilize our equipment and supplies; we use all of the economies of scale that come with our nationwide reach to leverage savings. Looking to the future, we are exploring ways to use technology and innovation to make us even more efficient in our operations.

Have you seen any changes, positive or negative, in the employee labor pool?
We have continued to see pockets of driver shortages, mainly in major urban areas in which we operate. Should the economy continue to improve, we would anticipate another round of driver shortages like those that faced the industry in the late 1990s. The severity of those shortages will undoubtedly be tied to the degree in which the economy rebounds. A very robust economy would certainly create challenges for the industry — both public and private.

What's your company's greatest strength?
Without question, our people. The experience, dedication and commitment displayed by our 46,000-plus employees makes us the leader we are today. Drivers, monitors, mechanics, managers and staff all working toward a common goal — to provide the safest and highest quality service in the student transportation industry to our customers. We’re entrusted with the lives of 2 million children each and every day, and we take that responsibility very seriously.

Questions answered by Hugh MacDiarmid {+PAGEBREAK+}

Student Transportation of America

Howell, N.J.

Fleet composition: 2,400 school buses
States operating in: 8
Students transported: 165,000
School district contracts: 90
Company head: Denis J. Gallagher, chairman and CEO
Phone number: (888) 942-2250

What's your company's outlook for the 2004-05 school year?
We anticipate a typical year in the school bus industry — one that challenges our entire organization to continue to perform at the highest levels of safety and service yet creates exciting new opportunities for us to grow.

What's been the most positive aspect of this school year thus far?
This year has challenged our organization to adapt and change to deal with issues from the terrible fires in Southern California to the extreme cold and snow in the Northeast.

So from a positive view, while things we cannot manage can seem out of control, the things we can manage, such as delivering our passengers to school safely and on time, we’ve performed at extremely high levels of satisfaction, and I’m very proud of that.

Are school district budgets returning to normal?
It varies by district. However, while school budgets are challenging, the majority of contracts are driven by CPI (consumer price index) increases, which have been at the lowest levels in decades.

How have you managed costs this year? Have you been able to reduce overhead?
While costs for fuel and health insurance have continued to be volatile, the extreme weather in the Northeast states has played the most havoc on our budgets. School closings, cancellation of athletic and field trips and higher costs for snow removal, among other things, have forced us to adjust accordingly. The good news is we generally make up lost days as the year progresses. We also had a reduction this year in our liability insurance due to another great year of safe performance by our drivers. There’s no question — we all have to watch our expenses and manage our costs.

Have you seen any changes, positive or negative, in the employee labor pool?
We continue to see improvements in recruiting in most markets in which we operate and also see tremendous success in our retention, which says we’re definitely doing something right. I’m extremely pleased with the way our processing, training and safety teams have performed and re-invented themselves on a regular basis to meet the challenges.

What's your company's greatest strength?
We at STA are all aware that while we have this awesome public trust as a company, we are only as strong as every individual and their personal commitment to provide the highest quality of safety and professionalism every day. So, our greatest strength is the almost 3,000 individuals at STA doing what they do so well. Together, they have made their company great.

Questions answered by Denis Gallagher

Related Topics: Durham School Services, First Student Inc., Student Transportation of America

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