In The News

Knoxville's IdleAir Keeps on Truckin'

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.