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Getting Real About Business: What Is Really Driving Consumer Prices?

Mark Puppe talks to David and Matt Gadberry from Magnum about an industry often neglected by consumers but driving our economy: trucking.

Mark Puppe talked to Magnum

Photos by Hillary Ehlen

America’s engine sputtered on September 6; the day Bo “Bandit” Darville (Burt Reynolds), the entrepreneurial blocker who drove a black Trans Am in the action comedy, Smokey and the Bandit, passed away.

Culpability and blameworthiness aside, the Bandit and his truck driver partner, Cledus T. Judd (Jerry Reed), enliven free enterprise fundamentals that every business owner strives to apply. The soundtrack tune “East Bound and Down” lyricizes the “we’re gonna do what they say can’t be done” mentality every person admires. They utilize cutting technology of the times, CB radios, to engage their professional network of fellow truckers, and the stagecoach graphic adorning Cledus’s trailer represents identity branding at its finest.

Further, these guys dignify an industry often neglected by consumers but driving our economy: trucking.

Nearly every purchased item we own would have minimal initial value had trucks not been able to ensure we, the end users, could receive those items. We’re not going to walk to a car assembly plant to buy a vehicle so we can go shopping for the furniture we’re sitting on.

Consider how mega-retailers like Toys R Us and Sears shut down while the economy blazes. Amazon’s majority stockholder, Jeff Bezos, is the wealthiest person in the world and delivery prices escalate due to a driver shortage with no end in sight.

Magnum Holdings evolved from business decisions from which every person respecting their own dollars can learn. Plus, if you’re anywhere near Fargo, it has undoubtedly innovated a route or put a truck on the road to transport something you have personally wanted or used. Better yet for the community and local economy, Magnum celebrates 40 years as a family-owned business and trucking industry innovator headquartered right here in Fargo.

Wayne Gadberry once used a single farm truck to haul grain understanding that, unless he used the truck during the off-season, that asset would sit. Wayne beholds idle assets as intolerable business losses, so he came up with ways for the truck to continuously generate revenue.

While others’ trucks were parked, his hauled sugarbeets independently. When no sugarbeets remained, he was hauling other materials American Crystal needed.

Over the years, Wayne diversified rigs, routes, cargo and services. which have evolved into Magnum Holdings, employing 900 people and operating 550 trucks wholly committed to the trademarked slogan “Innovation with Value.”

According to Vice President of Truckload, Wayne’s son, Matt, “Magnum takes pride in knowing and listening to our customers…and in developing specific processes that provide value to our customer. That is ‘Innovation with Value.’”

Five separate entities form Magnum Holdings to provide long haul service: inventory management, less-than-load (the straight box truck driving pallets around town), third-party logistics (planning routes for other businesses) and another dedicated to equipment and service.

No matter the business, costs are inevitably and inherently passed to consumers and increasing shipping prices don’t go unnoticed. Well, costs are increasing for shipping companies as well, so Wayne warns us not to expect things to change.

So, where do these costs come from? Matt says transporting a single pallet from Point A in Minneapolis to Point B in Fargo requires participation from 15 employees. Each must be trained and paid; the equipment must be purchased, operated and maintained—and that’s just a cross section of the costs. What’s more, none are unique to Magnum because all carriers pay those operational costs and they are tallied into the price consumers pay.

Mark Puppe talked to Magnum Holdings
David Gadberry

However, Magnum creates, implements and modifies strategies for creating new value, enabling it to keep consumer costs down.

Magnum purchases state of the art equipment such as collision avoidance systems like speed regulators (Magnum trucks can only drive 64 miles per hour), advanced braking systems and high-tech video systems. These and other measures decrease accidents and improve fuel economy. “This means less freight cost for the consumer,” Matt says.

Matt anticipates testing autonomous trucks within five years and figures Magnum can create the news from Fargo rather than read about it. In addition to trade fairs and conventions, Matt meets with industry leaders, vendors and counterparts to discuss what’s going into products, not just products themselves. “The goal is to learn about the ever-changing transportation environment while being a leader in the industry,” he says.

Regardless, Magnum still needs people to drive trucks and that requires commitment and professional know-how. “We try to make (trucking) a career,” Wayne says.

And a career it can be. New drivers can typically expect $40,000 in their first year while proven professionals are earning upwards of $100,000 annually, Wayne says.

However, and unfortunately for consumers, not everyone has what it takes to be a driver. Matt says that although other professions require travel, it’s often the regular, long-distance road travel and mobile lodging that distinguishes drivers.

Magnum recognizes their employees’ unique character, so when employees want to shift gears in their career, it accommodates them by allowing other duties in different Magnum departments or locations. These efforts minimize turnover thereby reducing the exorbitant training expenses that would otherwise be paid by consumers.

The North Dakota Class D drivers license permits and is typically enough to show someone’s ability to drive a four-wheel passenger vehicle whereas just because someone has the Class A commercial drivers license (CDL) required to legally drive an 80,000 pound tractor trailer does not mean they can.

Matt says having the rig, wherewithal for the career and a CDL still doesn’t warrant the Magnum badge.

“If someone wants to work for Magnum as an employee or an independent contractor, they both must fill out the proper paperwork…to ensure they have the proper driving record and CDL. If all is acceptable they will go through orientation and be setup to drive for Magnum.”

Training and driver confidence at Magnum transcend policy and paperwork to the point that the business founded its own professional driving school in Coon Rapids, Minnesota. When someone drives for Magnum, they know how and want to drive. That, we can appreciate. It also means we cannot afford to overlook the volumes professional drivers accomplish before they even start performing the essential tasks we so often take for granted.

Consumers have been frustratingly inconvenienced, but few have identified or even fathomed the driver shortage as the reason because the problem is rooted so far away from the consumer. Consider a producer’s inability to get its inventory out the door or off the field. When no drivers are available to haul sugar beets, there’s no sugar for cookies and dentists go broke cleaning teeth rather than drilling cavities out of them. Thankfully, this simplistic chain of events hasn’t happened, but it does reveal how trucking prevents a lot of problems.

Mark Puppe talked to Magnum Holdings
Matt Gadberry

Ultimately, it comes down to this: Magnum has established and demonstrates the underlying and universally applicable truths that an idle asset can be either a loss or launchpad and very few assets would have value absent the trucking industry. If there’s any doubt, ask yourself how you would have ever acquired the magazine or screen you’re reading at this very second had a truck not contributed to its aggregate development and delivery.

Knowingly or unknowingly, consumers receive more benefits and save more money than we realize thanks to the truck drivers. How do consumers return the favor?

Matt reminds drivers to recognize and understand what a large tractor trailer can and cannot do. Trucks comply with different speed limits, have slower rates of acceleration and deceleration, and far different dimensions than the passenger vehicles we drive.

Simply put, save your car and potentially some lives and give the truck room because Bandit can’t drive blocker for everyone.

Meet Mark Puppe

Mark Puppe

Mark Puppe develops communication strategies and written content as owner of Master Manuscripts. He has advocated for small business professionally at the National Federation of Independent Business and Professional Insurance Agents of North Dakota, and does what he can to ensure entrepreneurs get the credit, protection and veneration they deserve.

His contributed pieces introduce, showcase and personify the real, imminent, yet often overlooked and unknown responsibilities that small business owners experience, endure and strive to overcome.

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