Jun 03, 2012

Knoxville News Sentinel: IdleAir Keeps On Truckin’

KNOXVILLE’S IDLEAIR KEEPS ON TRUCKIN’

Originally published here: http://m.knoxnews.com/news/2012/jun/03/knoxvilles-idleair-keeps-on-truckin/

By Josh Flory
Published Sunday, June 3, 2012

Photo by Adam Brimer
IdleAir faces plenty of the challenges that come with running an early-stage business,but it isn’t exactly a start-up. Instead, you might call the Knoxville firm a jump-start.

With its headquarters in a small industrial complex near I-640, a new team is hoping the third time’s a charm for the company that provides services to truckers who don’t want to leave their engines running while they rest.

In its first iteration, IdleAire Technologies was a local start-up that aimed to put a green spin on the long-haul trucking industry and attracted capital from a wide swath of East Tennessee investors who were hoping to hit it big when the company went public. That dream ended in a 2008 bankruptcy filing, and later that year the company’s assets were sold for $26 million to a group of investors who tried to relaunch the company. That encore also failed and in January, 2010, IdleAire, Inc., announced that it would close.

A few months later, though, an investment group called Convoy Solutions announced plans to restart the company’s service at more than two dozen locations.

The CEO of Convoy Solutions is Ethan Garber, a former junk-bond trader with Bear Stearns who became familiar with the company while working as a consultant for its former owner.Garber said the new investors are mostly wealthy individuals, many with a background in turnarounds and bankruptcy.

The challenges are numerous. For one thing, the company has said TravelCenters of America removed IdleAir’s equipment from many of its locations and according to Garber, IdleAir bought that material back from the demolition teams that removed it. TravelCenters of America did not respond to an interview request.

Another hurdle is the company’s reputation after previous false starts. While IdleAir at one time had 131 locations in 34 states, it was operating 26 locations in late May with two more pending and an additional 10 sites in the active planning stages.

Mike Fielden, a University of Tennessee graduate and logistics veteran,is the company’s president and said that “it’s taken a long time for people to even understand that this company is in business. They saw places being removed … and when someone has seen that, that sticks in their mind pretty well, to (the extent that) when they see it up that doesn’t mean they think it’s open.”

IdleAir’s facilities feature truss-like stations where drivers can hook to a module that provides heating, air-conditioning, electricity and other services directly into their cab. By using those services for an hourly fee, the drivers don’t have to leave their engine running overnight.

Fielden said the company had made some stylistic changes, dropping the second “e” from the company’s name and tinkering with the logo. He added that “we decided that improving the image of the brand and repairing the image of the brand was better than starting a new one,” he said.

More substantively, IdleAir has streamlined some of its operating practices. Fielden said the company once had four data centers but now has only one,and has reduced the number of on-site workers.Those employees also have incentives — based on factors such as hours of use and sales — built into their compensation packages, rather than simply drawing an hourly check.

Garber said the company now breaks even when it comes to profitability at the site level,with small profits beginning to cover corporate overhead. “We think that we’ll probably be cash-flow positive by the beginning of next year,” he added.

Linda Gaines, a transportation systems analyst at the Argonne National Laboratory, near Chicago, said IdleAir is on a much better track than it had been, and that the new management team is “pretty sharp.”

“They’re specifically looking for sites with good occupancy. They’re cutting their costs compared to the original company. They’re going out of their way to sort of develop a very positive public image,” she said, adding that the new company’s up-front capital cost was much lower than the original company.

IdleAir’s full-service approach isn’t the only strategy being developed to reduce the emissions from idling. Onboard units, for example, represent a higher up-front investment for drivers but allow them to power up at any location.Another option is a “shorepower” system, in which truck stops install electrical facilities that drivers can plug into, although that option also requires drivers to carry some equipment with them.

Garber, the company’s CEO, said IdleAir has signed up more than 20,000 drivers since it relaunched in 2010 and is aiming for a network of around 100 locations.

“We’re risking our own money to try to right IdleAir and let it realize the potential that it already showed (a) significant likelihood of being able to reward its customers and employees with,” he said.