School bus contractor Petermann Bus Ltd. has staked its claim to treating people the right way, one reason why the family-owned company has not only longevity in the industry but has expanded its operations into nine states over the past couple of years.
Now the nation’s fifth-largest contractor, we sat down with president and CEO Pete Settle, the grandson of founder C.H. Petermann, to discuss the company’s evolution while retaining core values of taking care of its employees and customers alike. We also discussed the challenges that remain not only for Petermann but those that other school bus contractors and the rest of the school transportation industry face.
School Transportation News: What challenges did you need to overcome in expanding the business across the country? How did the opportunity present itself? Was it in response to the economy?
Pete Settle: The primary challenge in expanding our business is identifying customers who recognize the hidden risks of employing a contractor based solely on rock‐bottom price. School districts are under enormous budget pressures, but they can unknowingly incur enormous costs if they only go with the lowest‐priced contractor for their bus service. Petermann, the nation’s fifth largest school transportation provider, has earned the reputation of being a bargain, but we are not going to be “bargain basement,” which is what some competitors are doing to stay alive. We make our value a bargain by:
- The absolute quality of the person we place behind the wheel of the bus and support staff that we put behind that driver, where others can treat driving a school bus as a “McJob;”
- The fact that we build technology into our service and don’t just “bolt it on” like other providers;
- The flexibility we bring to our service offering allowing customers to quickly modify their service levels based on budget constraints;
- The accountability we bring in empowering our local management to make key decisions to respond locally to our customers’ needs without having to resort to multiple levels of corporate bureaucracy.
STN: How does Petermann see the industry rebounding from the current economy? What might be necessary to accomplish this?
Settle: Growth in the industry will have to be based on conversion opportunities which will continue to present themselves due to overall tight public dollars in school districts. The critical issue in conversion is the ability to manage the transition seamlessly without disruption to the school community. Petermann collectively has completed more U.S. conversions than any other contractor, and our goal has always been to make the decision for school districts to privatize an easy one to make, and a decision that is applauded by parents and teachers.
STN: Why have conversions not played out as well for contractors nationwide as was originally expected? Overall conversion numbers have not met high expectations primarily because most contractors in the industry lack the commitment and continuity of experienced resources. For large operators, many conversions are far too small and time consuming to ultimately be material to their overall business.
Settle: Because of this, these large operators have haltingly and inconsistently invested in the pursuit of conversion opportunities. Further, many conversion opportunities require great flexibility, and most large corporate competitors are simply not structured for such “hands on” involvement in the conversion process. Conversions have always been a key component of our growth since our inception and continue to be core to our mission.
STN: With many districts cutting routes, extending walk routes and lengthening route times and otherwise reducing service, what are your thoughts about other business that contractors and school districts can go after? How can the industry diversify its operations to maintain its value in the eyes of school administrators?
Settle: That’s the problem. Many large companies have diversified into other forms of ground transportation and it ultimately has proven distracting to their core yellow bus business. While an accident can still happen with the best of people and processes, the risks to the customer increase in many areas when the contractors take their eyes off the real mission. Driving a school bus is not just a matter of driving a large vehicle. It is understanding the concerns of parents and educators, of knowing how to safely deliver children to and from schools and care facilities, knowing the personal touch needed to maintain a healthy atmosphere on the bus, and never forgetting the standards of care and competence that surround our work. When you do that everyday and all of your processes, training and management attention is devoted to that, you get better at it. By staying committed to school bus service as our core, we are able to continually improve our processes and create further efficiencies for our customers.
STN: What do you think about the possibility of better cooperation/collaboration between school districts/contractors and Safe Routes to School? Is it better to have Safe Routes and transportation separate entities, or does it depends on the individual district’s needs?
Settle: We support the Safe Routes to School [program] so long as all safety aspects are considered. I think the two efforts (school transportation and SRTS) need to work very closely together, at a local level. Local school transportation professionals are a tremendous resource for the SRTS efforts. We know the area, traffic patterns, engineering obstacles and social/neighborhood issues. Clearly, there cannot be a gap between what the school transportation provider does and that which is envisioned under a SRTS program. In this economy, how best could the industry promote increased student ridership despite all of the cuts?
STN: What is your response to a belief held by some in the industry that all students who live with x miles of school should be eligible for school buses, regardless if they take it or not?
Settle: There are a lot of unintended consequences that can arise with blanket transportation eligibility because the blanket simply can never cover the full range of local factors. There may be areas where a walk to school can be both desirable and safe. We are working with many customers to implement transportation exclusion zones where appropriate sidewalks, neighborhood and traffic conditions exist. I also believe that the school bus could represent the best ‘green’ way to get to school. We know today that riding in school buses saves over 62 billion car miles per year. That results in not only reduced traffic congestion and improved student safety, but also removes untold tons of carbon from our atmosphere.
Editor’s note: See the cover story on Petermann Bus in the June 2010 magazine issue.