Overland Park ? Bill Zollars shocked Wall Street in 2003 when he announced that his company, Yellow Corp., was planning to merge with its trucking rival Roadway Corp.

He did it again last month when Yellow said it was acquiring national next-day hauler USF Corp. in a deal worth $1.37 billion in cash and stock.

Analysts questioned the Roadway deal because no one had engineered such a large consolidation in the “less than truckload” industry and achieved the kinds of cost savings Zollars was predicting. In the case of USF, some industry observers didn’t think Yellow was ready to dive into the next-day delivery market.

Zollars proved the naysayers wrong on Roadway as the merged company, which specializes in consolidating shipments from several customers onto a single truck, saw revenues double in the last year to $6.8 billion and earnings more than quadruple to $184 million. He says Yellow Roadway Corp. will repeat the success with USF, estimating $150 million in long-term savings.

“Our basic philosophy has always been the more things we can do for the customer, the more valuable we’ll be to them as a company and the more valuable the company itself will become,” said Zollars, Yellow’s chairman, president and CEO.

Rising shares

Investors have borne that out as Yellow stock has doubled in value during the past year to more than $60 a share.

“I’d be hard-pressed to find a CEO in my group of companies that has delivered more shareholder value than at Yellow,” said Jason Seidl, a transportation analyst for Nashville, Tenn.-based Avondale Partners LLC. “You look at the financial performance over the last three quarters and it’s been over-deliver and raise the bar again.”

Observers both inside and outside the Overland Park-based company say Zollars’ focus on expanding and improving customer service helped Yellow change from a struggling trucking company in 1996, when Zollars came on board, to one of the most dominant transportation service providers in the country.

Yellow Roadway Corp. CEO Bill Zollars plans to lead the Overland Park-based company through its second major merger since 2003. The company plans to acquire next-day hauler USF Corp. for .37 billion.

“I think Bill really helped change the culture of our company,” said James Welch, president and CEO of Yellow Transportation, the company’s largest subsidiary, and a 25-year veteran at Yellow. “We became more of a sales and marketing company versus an operations company. That allowed us to move the needle, which we hadn’t done in a few years.”

Zollar’s background

Zollars, 57, grew up in Minnesota, graduating from the University of Minnesota with an economics degree. He spent 24 years at Eastman Kodak Co. in a variety of roles before moving to Ryder System Inc. in 1994 to start that company’s logistics operation.

In 1996, a national headhunter found Zollars and persuaded him to move to Yellow, which was in the midst of a management shakeup following three years of straight losses. The new CEO, A. Maurice Myers, put Zollars in charge of Yellow Transportation.

Zollars said Yellow, like any recently deregulated industry, suffered from never having faced true competition and had become mired in measuring efficiency and not satisfaction.

Myers and Zollars in 1998 and 1999 rolled out new services that, for a price, would guarantee quicker delivery by a certain time. Such services were routine for parcel delivery companies like FedEx and UPS, but rare for a long-haul trucker.

Myers, who left Yellow in 1999 to take over Waste Management Inc., said Zollars’ experience outside the trucking industry helped to develop these new services and get employees to care less about how to get from Point A to Point B and more about how to get customers where they wanted to go.

“He had been a customer of transportation companies and understood it from a customer’s viewpoint as opposed to being inside the company where there was a lot of negative thinking and ‘It can’t be done,”‘ said Myers, who is now retired.

CEO takes to road

Zollars took over as CEO in 1999 and immediately went on the road, visiting most of the company’s truck terminals and other facilities to get a read from drivers, loaders and office workers.

Greg Reid, Yellow’s chief marketing officer, accompanied Zollars on many of the visits and said it was almost like watching a political campaign.

“I remember going to one of the coldest places in America, in Chicago, and standing on the dock and going from one meeting to another as people got off their shifts,” Reid said. “He did this around the clock and around the year as a way to get to know everybody and put a face to the employees on what management was trying to do. He did that one person, one handshake at a time.”

The changes allowed Yellow to begin acquiring smaller companies to provide regional next-day delivery services and logistics transportation planning. He also slashed jobs in administrative support and spun off subsidiary SCS Transportation Inc. because of friction between union and nonunion workers.

Zollars has shown a knack for dealing with unions. As Yellow has shrunk its work force, little blood has come from the company’s army of drivers.

“We have found him to be a man of his word and whatever he says he follows through on,” said Galen Monroe, spokesman for the International Brotherhood of Teamsters, which represents 37,000 Yellow Roadway employees. Monroe said the company had “guarded optimism” toward the acquisition with USF, where the union represents 8,100 employees.

Zollars said he focused cutbacks in the back office so it didn’t affect the customers’ relationship with sales reps or drivers.

“We don’t want to give a customer any reasons to think about changing partners,” he said.