Summer 2003     

As the end of summer nears, it's timely to reflect on our company performance year to date -- to examine the ups and downs and highs and lows -- and then to give some words to ongoing improvement activities. And finally, I want to take a few lines to express my appreciation to all of our independent contractors and fleet drivers, without who's day to day efforts none of our business would be possible.

We began this year with growth in mind, growth in our agent network, growth in our driver base (fleets and owner operators), and growth in our revenue. This was not to be unchecked growth, -- or growth for growth's sake -- but growth focused on quality and compatibility/fit to our current business and culture. And I'm pleased to report that we are well on track to accomplishing our growth plans for the year. Absent any unexpected and uncontrollable event, I fully expect we'll meet all of our goals for agent network and driver lease expansion as well as revenue increase. As I stated, we wanted to accomplish this growth with quality and fit in mind; and, several outside evaluations of our company suggest that we're doing just that. This year we've had our quality system successfully certified as ISO9001:2000 compliant, a step-up from our previous ISO9002 certification; we've achieved a satisfactory rating without findings in an on-site DOT audit of our Safety Program; and, we've completed a DOD Motor Freight-Carrier Corporate Transportation Inspection without violation. These third party certifications/audits/inspections attest to the fact that we have quality processes and procedures in place, that we're able to work as a team with our affiliated agents, fleets and independent contractors and that our business planning has measurable and compatible goals and objectives.

However, all things are not so rosy. We continue to face challenges in reducing our vehicle and driver out of service rates and our DOT recordable accident rate. Our goal in all these areas is to be "best in class" and I'm disappointed to say that we're "just average". Being better than "just average" in these three key measures of safety program effectiveness would (1) help us competitively with shippers who more and more expect "best in class" safety performance, (2) position us for better insurance rates when the cyclic insurance market again softens; and, (3) give us a "pass" through DOT inspection stations. I implore everyone: DMSCC employees, agent and fleet partners, and especially our valuable owner operators and fleet drivers, to give attention to log compliance, equipment maintenance, load securement, and defensive driving. Only through focus and improvements in these areas will we become the "best in class" that we all want to be and can be.

Another area where we have room for improvement is in "communications" -- both with the tools that we use to communicate; but, also in the manner in which we communicate with each other. In both of these areas I want to announce initiatives we've begun. As to tools, the spinal cord of our communications capability is our TMW TL2000 Operating System. We know that there are system functionality and operability problems and we have initiated aggressive actions aimed at resolving these problems. One action I want to highlight is the establishment of a TMW TL2000 Focus Group comprised of appropriate D&M employees and a selected group of users from among our agent partners. This group is chartered with providing system direction and determining and prioritizing needed system fixes; its kick-off meeting will be held on September 27th in Kenosha. I personally want to thank those who've agreed to participate in this important effort and look forward to giving you feedback in the future on the group's accomplishments.

I also want to spend a paragraph writing about the manner in which we communicate amongst ourselves. Being sensitive to feedback I've received from agents and drivers that suggests our home office staff in Kenosha may not be focused on meeting the needs of agent and driver customers, we are embarking upon a customer training program. Each associate in the home office who has agent/driver contact will be expected to complete the program. Our aim from this training is to ensure that we hear, understand, and meet contractually agreed upon customer expectations - and that we communicate that hearing, understanding and meeting of expectations in a clear, concise, professional and respectful manner. For your part as driver and agent partners, I ask that you communicate your needs, requirements, and expectations to your support staff (that's us in the home office) in a same manner. I personally understand the pressure and stress that you are under running your own businesses and your trucks and want to commit to you that our aim is to do everything we can to make your job as economically successful, pleasant and stress free as circumstances permit.

I want to close, as I wrote at the beginning, by thanking all of our independent contractors and fleet drivers for the invaluable service they provide daily to not only Dallas & Mavis and its agent partners, but, also to business in America, and the consuming public. As they used to say in my former life as an Army Transporter, "nothing happens until something moves'; and, for making things move, I personally thank you for performing the demanding job you perform each day as a professional truck driver.

D&MSCC quarterly review