With more than 5,200 trucks currently in operation, the Daseke family of companies burns much fuel each year in its quest to deliver freight to its customers. Under its own umbrella, Aveda Transportation and Energy Services dispatches much equipment every year with the aim of finding fuel. Aveda helps its partners bring oil up from the depths and transport it to the refinery. For both companies, the rules of supply and demand still apply, only in different ways.
Now, Aveda has joined the Daseke group. It’s a great match that promises to strengthen both businesses.
Aveda’s origins date back to 1994, the year a start-up trucking company named Phoenix Oilfield Hauling began operations. Phoenix started with around 10 trucks, all of them servicing oil fields. Solid growth ensued, and, in 2006, the company went public. When the Great Recession hit, the company weathered the storm while others in their industry became insolvent. Then, with a change in name in 2012, Aveda was born.
Aveda’s growth truly accelerated with the appointment of Ronnie Witherspoon as the company’s CEO. A seasoned management team quickly formed around him. They knew the industry, they knew transportation, and they knew the right formula for growth. The team also brought passion to the business and cultivated relationships with blue-chip players, such as Shell and ConocoPhillips, amongst others. The results can only be described as “stunning.” When the new management team arrived in early 2016, quarterly revenue was at $7 million. During the last quarter (ending March 31, 2018), Aveda reported revenue in excess of $60 million.
Today, Aveda has evolved to become one of the largest and fastest oil-rig moving companies in North America. It boasts a fleet of more than 400 tractors and 660 flatbed and specialized trailers, as well as a large fleet of light-duty trucks. It also utilizes third-party companies to handle up to 35 percent of its loads — something not lost on Don Daseke, Daseke’s CEO.
“This company has had a remarkable rise, and they are one of the leading players in the oil-rig moving sector,” says Don. “What’s even more exciting is we can now grow together. Our operating companies have the capacity and equipment to work with Aveda in its sector. Those outsourced loads can now be offered to companies within our organization.”
What’s been the secret to Aveda’s strong organic growth?
According to Ronnie, it’s been “knowing the market, developing lasting relationships, adjusting quickly to demands for our services and providing transportation that cuts costs for our customers. We’ve developed new tools and procedures to improve our performance. Quality and innovation are mission-critical.”
Aveda conducts 90 percent of its business in the United States. As a consequence, the company boasts a wide network of branch locations that support oil exploration primarily in Texas, Pennsylvania and North Dakota. Aveda is also active in Ohio, Oklahoma and Alberta, Canada. For each new drilling site, the prep work is fast and furious.
“An AC-powered drilling rig costs between $25 to $28 million,” says Ronnie. “And it takes about 100 loads to set up the rig, all of which we can do in two-and-a-half to three days. After the well has been drilled, we dismantle the rig and move it again and again to new sites.”
All of this means that Aveda is well-positioned for future growth — and that growth is already happening. In June 2016, Aveda was providing services to areas that were home to 341 oil rigs. That number expanded to 512 over the course of the next six months. By the end of March 2018, Ronnie notes, Aveda was servicing 925 rigs.
Industry-wide, the energy transportation market is valued at $2 billion a year. Aveda has moved quickly to seize opportunities and earn a significant new share of this market.
“Some might think our success was based on the rig count growing by 171 percent,” says Bharat Mahajan, Aveda’s VP and CFO. “That’s certainly helped, but only in part. The numbers don’t lie. Our revenue in April 2016 was $1.5 million, and, in March 2018, it was $24.1 million. That’s a 1,500 percent growth rate, outpacing rig growth by almost nine times.”
While oil exploration is booming right now, as in any industry, there are always peaks and valleys to navigate.
“That’s the trick in this business,” says Ronnie. “You have to be able to react and have both a passionate team and a strategy in place. Knowing how to adjust quickly to market conditions separates companies. At Aveda, we’re excelling, and our market share and profitability is testimony to that. You have to know how to adjust.”
According to Bharat, the financial backing of Daseke will further bolster the company.
“We’re stronger than ever now,” Bharat says. “That’s good for our employees and our customers to see. What’s more, through Daseke, we’ll also be able to share in consolidated purchasing power and programs. That will help us cut operational costs.”
Moving forward, Ronnie says the synergies between Daseke and Aveda go well beyond equipment and business opportunities.
“The real synergy is a belief in hiring and empowering the best people in the industry,” he says. “The day I met Don, I knew he led a people-first culture. We need top-quality, passionate people to execute the business plan. We have that culture, and Daseke has that culture. That’s why this is such a perfect match and an exciting new era for Aveda.”