<i>SBF</i> Showcase: Giant Contractor Fleets

This special section spotlights successful and innovative school bus programs. This showcase profiles four of the largest school bus contractors in North America.

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March 1, 2001

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Atlantic Express

STATEN ISLAND, N.Y. -- Atlantic Express Transportation Group Inc. is the largest American-owned and American-based school bus company in North America, providing transportation services since 1968. At its inception, the company provided special-education transportation services in the borough of Staten Island in New York City, utilizing a fleet of 16 vans. The company grew at an average rate of 25 percent annually, to its current fleet size of 6,876 vehicles. Operating in 11 U.S. states, the Atlantic Express operation includes contracts for some of the largest school districts in the nation, including New York City Board of Education, the School District of Philadelphia, St. Louis Public Schools, Los Angeles Unified School District and Chicago Public Schools. The company is directed by Domenic Gatto, president/CEO, who started out as a school bus driver for the Staten Island Bus Company, now part of Atlantic Express. Since 1978, Atlantic Express has achieved a 96 percent contract renewal rate. This is due, in part, to innovations in safety, training and maintenance. The company has adopted a SAFEBUS program, wherein each of its vehicles is outfitted with a decal saying, “How am I driving? Call 1-800-SAFEBUS.” When a motorist calls the 800 number, a 24-hour operator gathers data from the caller, verifies the data and immediately faxes a transcript of the call to the Atlantic Express management team as an incident report. The driver then receives disciplinary action based on his or her infraction. In the shop, mechanics use a computerized maintenance system called ShopFax, which uses a handheld scanner and barcodes to track vehicle repair. “Use of the scanners eliminates the time spent by mechanics in manually preparing reports, thus improving productivity, accuracy of data collection and record keeping,” explains Noel Cabrera, executive vice president. All Atlantic Express locations consistently receive scores in the 90 to 100 percent range on annual inspections, even those in states with some of the most stringent inspection requirements in the country. Atlantic Express has online access to the motor vehicle departments in all states for checking driver records. Personnel are assigned to monitor driver training, tests, violations and license renewals. Drivers are required to be in uniform and to be well groomed every day. Atlantic Express defends itself against the driver shortage by investing in hiring, training and maintaining professional workers. “Quality training, quality work environment, solid wages and solid benefits help keep employees content with their jobs and with Atlantic Express,” says Cabrera. One way in which the company ensures quality service is by employing field/road supervisors to monitor and upgrade driver performance. The field supervisors, who are generally former police officers, are trained to investigate unusual incidents, passenger complaints and traffic accidents and to report their findings to management for appropriate action. At random or at the request of management, field supervisors conduct road observations of buses using unmarked vehicles. They audit driver performance, appearance and paperwork preparation as well as vehicle condition and appearance. They also act as liaisons between the company and the school districts. This investment in highly trained, versatile staffing enables Atlantic Express to better support its employees, while at the same time better serving the public.

Laidlaw Education Services

NAPERVILLE, Ill. -- Imagine being responsible for safely transporting an entire population the size of Pittsburgh. That is Laidlaw Education Services’ challenge every school day. The largest private contractor of student transportation in North America, Laidlaw Education Services has a fleet of more than 40,000 school buses and transports 2.3 million schoolchildren to and from school each day. The company partners with more than 1,200 school districts and provides student transportation services from nearly 550 locations throughout 35 U.S. states and five Canadian provinces. Operationally, the company prides itself on passenger safety as its top priority. Laidlaw Education Services promotes such safety innovations as crossing-control arms to prevent children from walking close to the front of the bus. Most recently, the company installed the Child Check-Mate System, an electronic reminder that sounds an alarm at the end of a route, requiring the driver to walk to the back of the bus to check for sleeping children. “We believe providing safe, reliable transportation is the single most important commitment we can make to the students and to a school district,” says Bob Hach, president of Laidlaw Education Services. “As a result, safety is the driving force behind everything we do.” Hach attributes the company’s success to the exceptional performance and dedication of the more than 47,000 bus drivers and attendants, dispatchers, technicians and mechanics who personally see to it that the buses are safely maintained and the children arrive to and from school each day. Hach states that Laidlaw Education Services is alive and doing well, despite the well-known financial problems of its parent company, Laidlaw Inc. in Burlington, Ontario. In fact, Laidlaw Education Services was successful over the past year in converting an additional 300 school buses from district-operation for school systems in Dalton, Ga., and Dysart, Ariz. In addition to its successful partnerships with educational institutions, Laidlaw Education Services is a national corporate sponsor of Children’s Miracle Network (CMN) as well as supporting other community-based organizations and programs. Through bake sales, car washes, golf outings and even managers shaving their heads, the company’s employees have raised more than $1 million for CMN in the past three years to help children receive treatment at one of 170 hospitals throughout North America. The company chose to support CMN because 100 percent of locally generated donations stay in the community in which they were made to benefit children at participating hospitals. “Kids certainly are our business, so helping them through an organization like CMN was a natural,” says Hach.

Student Transportation of America

HOWELL, N.J. -- Founded in May 1997, Student Transportation of America Inc. (STA) is the sixth-largest contracted school transportation and management service in North America. The management team started STA with the goal of operating long-term contracts in selected rural and suburban markets. STA operates 51 contracts, utilizing a fleet of 1,349 school buses and vans. Contracts are serviced from 36 facilities in six states — California, Oregon, Pennsylvania, New Jersey, Connecticut and New Hampshire. “At STA, all we do is student transportation, and we’re committed to doing it better than anyone else,” says Denis J. Gallagher, chairman and CEO. Gallagher, President and COO Kenneth B. Needler and their six operating vice presidents average almost 20 years of industry experience each. “The experience of our management team is deep and strong — transportation experts who have dedicated their professional lives to providing safe, reliable, economic and innovative student transportation,” says Gallagher. When a school district makes the decision to convert to contractor management, STA allows the district the option of retaining its own fleet or including the use of STA’s buses in its bid. School districts often see retaining fleet ownership as a form of insurance, because the district does not have to buy a new fleet in the event that it decides to suspend private contracting. Currently, nine of STA’s contracts involve the management of district-owned buses. STA’s safety record is well above national standards. For the fiscal year ended June 30, 2000, the company’s accident frequency was down 36.7 percent compared to the prior year, although its revenue grew by 24.2 percent in the same period. “At STA, we are committed to safety. Safety is the number one priority for every member of the STA team,” says Gallagher. Gallagher joined the family-owned business, Coast Cities Inc., in 1976 and eventually became president and CEO. The company grew from a small local transportation provider to one of the largest privately-held school and tour bus companies in New Jersey. In 1987, Laidlaw acquired Coast Cities, and Gallagher played a key role in Laidlaw’s expansion into new markets. In 1996, Gallagher became the chairman and CEO of Sightseeing Tours of America Inc. in New York City, a provider of tours in and around Manhattan. In 1997, he formed STA with GTCR Golder Rauner Inc., a Chicago-based private equity firm. STA is a subsidiary of Global Passenger Services LLC, a leading consolidator and provider of transportation services across the United States for schools and universities, sightseeing tour companies, conventions, hotel resorts, airports and airlines, cruise lines, theme parks, sports teams, entertainers and large events. Global Passenger Services and STA can be found on the Web at www.GlobalWelcome.com or at www.RideSTA.com

The Trans Group

CHESTNUT RIDGE, N.Y. -- In the school bus contracting business, David doesn’t always slay Goliath. That is to say, the larger companies have some economies of scale that give them distinct advantages over their smaller counterparts. And the margin between winning and losing a contract often is a narrow one that sometimes determines the survivors and those that go belly-up. Taking heed of this admonition, The Trans Group in Chestnut Ridge, N.Y., has strategically grown from a small family company founded in the 1950s to a corporate enterprise operating more than 700 buses from eight terminals in five counties adjacent to New York City. The architects of this expansion both are named John Corr. John Corr Jr. is the current president of the company and has been involved in the business since 1977. In 1981, he bought one of the family’s satellite bus terminals with about 40 routes. It was later to become Chestnut Ridge Transportation. His father, John Corr Sr., founded the company and was active in its operation until his death four years ago. At that point, the younger Corr bought the remaining pieces of the company’s school bus portfolio and renamed it The Trans Group. Corr says his goal is to expand The Trans Group by 5 to 10 percent each year, primarily through acquisitions. In the late 1970s, when he joined the company, adding a few routes each year was acceptable. But the competitive pressures are different now. “Ten years ago, if you ran 100 buses you were a good-sized company,” he says. “Five years ago that threshold was probably 350 buses. Five years from now, who knows what it will take to be efficient? I feel you have to grow or die right now.” Although acquisition is the preferred method of expansion, Corr’s not afraid of competing for business and was instrumental in helping to change state regulations to allow school districts to use an RFP (request for proposal) rather than a low-bid process. “There were a handful of school districts that were really frustrated with bidding,” he says. This process often allowed companies without the proper background and experience to win contracts that they were unable to fulfill properly, much to the school district’s consternation, he says. Working with state education officials and the New York School Bus Contractors Association, Corr helped to draft a measure that gave school districts the option of using an RFP. After two years of wrangling, the governor signed the bill. Corr says more than a dozen school districts have opted to use RFPs rather than bidding. For his contributions to the school bus contractor industry, Corr was named SBF’s Contractor of the Year in 2000. He received the award at the National School Transportation Association’s annual convention in San Francisco. Corr and his wife, Debra, have five children — Jessica, Sean, Lindsey, Tara and Robert. In addition to his commitment to the school transportation industry, Corr is also active in the local community. He is the past treasurer of the Rockland County chapter of the American Cancer Society, an active member of the Rotary Club of Pearl River and a Knight of Malta.

Topics:Atlantic Express Transportation Corp.Student Transportation of America Safety Management

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