Motortruck January/February 2012 by Annex Business Media

Motortruck

Fleet Executive C A N A D A ’ S

B U S I N E S S

JANUARY/FEBRUARY 2012

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contents January/February 2012

Motortruck

Fleet Executive

Volume 81, No. 1

TOP TIER Page 19

COVER STORY

Top Tier �� 19 Enjoy detailed and up-to-date information on the capacity and capabilities of the 100 largest for-hire motor carriers in Canada with our seventh annual Top Tier report. We’ll even throw in the next 25 for good measure.

BUYER BEWARE

Acquisition activity is picking up steam in the turbulent post-recession climate. But what makes for a smart deal?

BIG MAC STEPS BACK

Long-time trucking mainstay MacKinnon Transport shocks industry by filing a Notice of Intent under the Bankruptcy and Insolvency Act in mid-December.

FEATURES

NO BAD CHARGES

THINK AHEAD

WASTE NOT

GETTING REAL ON RATES

Are you performing battery conductance testing correctly? With transportation planning playing a greater role in corporate decision-making in the years ahead, transportation companies, and those who use their services, will have to develop new skills in order to compete.

Could a small Canadian firm be the first to effectively employ waste heat recovery in the transportation sector?

DEPARTMENTS THE VIEW WITH LOU . . . . . . . . . . . . . . . . . . . . . . . . . 4 Is it science or politics that’s driving Hours-of-Service legislation? THE BOTTOM LINE . . . . . . . . . . . . . . . . . . . . . . . . . . 8 How to work the room in this generation’s version of the cocktail party: social media. TAKING CARE OF BUSINESS . . . . . . . . . . . . . . . . . . 10 Thinking of selling your transportation company? A Retirement Compensation Arrangement could be your way to a flexible pension plan. EQUIPMENT WATCH . . . . . . . . . . . . . . . . . . . . . . . . 35 Daimler Trucks North America’s rebranded engine behemoth Detroit adds axles to expanding powertrain portfolio. DASHBOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 TransCores’s Canadian Freight Index steady in November, avoids typical seasonal decline; freight costs rise slightly in October, CGFI indicates; and Canadian Manufacturing Purchasing Managers’ Index finds output strengthens to eightmonth high. INSIDE THE NUMBERS . . . . . . . . . . . . . . . . . . . . . . 38 Is competitive activity gearing up between the various transportation service providers? Plus: are higher freight rates causing modal shifts?

Page 28

There’s no debate among carrier executives about the need to raise rates. But as our shipper-carrier roundtable reveals, there are several factors shippers will want addressed before agreeing to an increase.

JANUARY/FEBRUARY 2012

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Motortruck

Fleet Executive

The View with Lou is it science or politics that’s driving hours of work legislation?

ow many hours should a truck driver be allowed to be behind the wheel? It’s a question critical to our industry, yet one we have been unable to answer satisfactorily for all involved – drivers, the carriers who employ them, the labour and professional organizations who represent them and the politicians who legislate them – since we Lou Smyrlis, first started discussing it in North MCILT America in the midst of the Great Editor Depression. lou@transportationmedia.ca Not only is the amount of time a person can drive before fatigue sets in a very individualized thing that, naturally, defies hard rules, but any science we can throw at the question is always, unfortunately, caught in the tug-of-war between the industry need to be more productive and labour’s demand for better working conditions. The two sides often read completely different things into the same research. Industry media reports of late are full of the criticisms from all sides heaped on the US Federal Motor Carrier Safety Administration since it laid out its new rules, which it hopes will go into effect in 2013. While daily driving time was not changed from 11 hours, the maximum hours a driver can work per week was reduced by 12 to an average of 70. The new rules, laid out by the FMCSA also require drivers using the 34hour reset provision to take at least two nights off between 1 a.m. and 5 a.m. According to the FMCSA, research shows that crash risk increases with longer daily and weekly work hours. So it made sense to reduce the number of hours a truck driver should be expected to work because consistently working long hours is associated with chronic fatigue, higher risk of crashes and chronic health problems. But it didn’t make sense, according to the FMCSA, to also reduce the number of hours a driver is allowed to drive in a day because the research did not show a “significant distinction” between the risk associated with working 11 hours versus 10 hours or nine hours. The Teamsters union and safety advocates, unlike the FMCSA, believe the research shows that additional hour does make a difference in driver safety and health. US carrier executives, although pleased to be keeping the 11 hours of driving time, are not happy about the significant reduction in maximum weekly

driving time. Dan England, chair of the American Trucking Associations and chair of C.R. England, believes both the trucking industry and shippers will suffer the impact of reduced productivity and higher costs. England also believes these changes may actually increase truck-involved crashes by forcing trucks to have more interaction with passenger vehicles when the rules require drivers to rest from 1 a.m. to 5 a.m. twice per week. The largest percentage of truck-involved crashes occur between 6 a.m. and noon, so this change will put more trucks on the road during the statistically riskiest time of the day. The reality is the new Hours-of-Service could end up bouncing around US courts for years before anything is resolved. That has been the case since 2003 when the FMCSA initially decided to increase daily driving time to 11 hours. The rule was immediately challenged in court by the Teamsters union and safety advocates. The 11-hour daily driving limit has actually been rejected twice by a federal appeals court yet remains in effect. Further legal challenges are almost a certainty. Gregory Beck, a lawyer representing safety advocates, has already served notice that renewed legal action is possible. And on the other side, Bill Graves, head of the American Trucking Associations, has also warned that his members are not happy with the reduction in the driver work week and will be considering legal options. Since the US government started considering back in 1936 how many hours a truck driver should be behind the wheel, the number of hours has changed from 15 to 12 to 10 and back up to 11 as of 2003. Were those decisions driven by science or by politics? Aside from the uncertainty created by the constant legal challenges, what should be a concern is the drain on resources this creates both with the government and with motor carriers. Fighting over whether one extra hour of driving actually has a measurable impact on safety takes time and concentration away from other areas – for example, emerging technologies such as lane monitoring or collision avoidance systems – which could have a larger impact on improving truck safety and productivity. mt I also hope you will continue the conversation on issues affecting all transportation modes by joining me in the Transportation Track at the upcoming Supply Chain Canada conference, May 8-9, at the International Centre in Toronto. Go to www.supplychaincanada.com to register.

is written and published for owners, managers and maintenance supervisors of those companies that operate, sell and service trucks, truck trailers and transit buses. JANUARY/FEBRUARY 2012

VOL. 81 NO. 1

Editorial Director Lou Smyrlis (416) 510-6881 lou@TransportationMedia.ca Managing Editor Adam Ledlow (416) 510-6890 adam@TransportationMedia.ca Features Editor Julia Kuzeljevich (416) 510-6880 julia@TransportationMedia.ca Creative Director Stephen Ferrie sferrie@bizinfogroup.ca Advertising Creative Directors Carolyn Brimer Beverley Richards Contributing Editors Ken Mark James Menzies Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs Publisher Rob Wilkins (416) 510-5123 National Sales Manager Don Besler (416) 699-6966 Account Manager Brenda Grant (416) 494-3333 Production Manager Kim Collins (416) 510-6779 Circulation Manager Mary Garufi Video Production Manager Brad Ling Research Manager Laura Moffatt Vice President Publishing Alex Papanou President Bruce Creighton

Head Office 80 Valleybrook Drive Toronto, ON M3B 2S9 Motortruck Fleet Executive is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd., a leading Canadian information company with interests in daily and community newspapers and businessto-business information services. The contents of this publication may not be reproduced or transmitted in any form, either in part or full, including photocopying and recording, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent. Motortruck Fleet Executive is indexed by Micromedia Limited. PUBLICATIONS MAIL AGREEMENT 40069240 Return Undeliverable Canadian Addresses to: Circulation Dept. – Motortruck Magazine, Suite 800 – 12 Concorde Place, Toronto, ON M3C 4J2 USPS 016-317. US office of publication, 2424 Niagara Falls Blvd., Niagara Falls, NY. 14304-0357. Periodical Postage Paid at Niagara Falls NY USA. Postmaster send address corrections to: Motortruck, PO Box 1118, Niagara Falls NY 14304. Member Canadian Business Press. Subscription Inquiries – (416) 442–5600. We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund (CPF) for our publishing activities. ISSN Number 0027-2108 (print) ISSN Number 1923-3507 (digital)

MOTORTRUCK Member/Canadian Business Press

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Transportation Professionals.... program October 17th into your I-Phone! Plan now to attend the 2012 Surface Transportation Summit, Canada's premier shipper/carrier event!

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ADVERTISING FEATURE

CHARTING THE CHARTING THE COURSE COURSE TO TO PROFIT PROFIT I n today’s tough economy, transport companies are facing more challenges than ever. Factors like higher fuel prices, shrinking margins, and reduced shipping opportunities are forcing organizations to do even more with less. But in doing so, some organizations discover they don’t have the internal resources needed to properly assess, manage and achieve the new expected level of performance. Luckily, they can look to Shaw Tracking to provide these resources. Shaw Tracking’s Professional Services team can assist in the deployment of technology and help manage operations in order to take greater control over profits.

Professional Services Support The opportunity for increased control over profits comes from implementing new technology within an organization’s current operations. As with any new technology, it is common to question the most effective method of calculating its Return on Investment (ROI). The solution? Set up benchmarks prior to rolling out the technology against which the ROI can be measured. This is why Shaw Tracking’s Professional Services has made its mandate as follows: To provide organizations with a proven methodology and the tools to effectively measure the greatest potential for ROI. Shaw Tracking understands that the groundwork must be laid before putting all of an organization’s benefits and costs into any given profit-driven formula. After all, every formula is as unique as the business it’s coming from. Shaw Tracking’s Professional Services’ step-by-step method to calculating true, attainable ROI provides: ■ succinct and complete project definitions ■ the scope and boundaries of the project ■ the ‘soft benefits’ made tangible and quantifiable in monetary terms ■ a solid, water-proof line of argument and attainable ROI document ■ a sensitivity analysis of final results probability and the major risk factors that impact it

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Automated Hours of Service Shaw Tracking offers fleet managers the tools they need to accurately monitor and assess their performance, efficiency, safety, compliance, driver and truck information, all in near real-time. The Hours of Service application uses the electronic on-board recorder (EOBR) embedded in the MCP100 hardware solution, and complies with Canadian and US regulations. This technology allows for improved dispatch decisions, increased productivit y and maximized miles per truck per day. As such, the Shaw Tracking Hours of Service application was designed as a proactive management tool, enabling fleets to optimize their dispatch assignments by providing accurate, near realtime driver availability information to the load planning process. As a web-based sof tware ser vice, the information is delivered to the dispatch system via a web interface. It can also be viewed online with a web browser. This automated record-keeping system helps reduce costs by eliminating the use of paper logs and

by mitigating the driver violations and fines associated with non-compliance. Additionally, the Hours of Service application runs on the OmniTRACS platform, which minimizes the need for up-front investment and driver training. Proven Results Over the past year, Shaw Tracking’s Professional Services has delivered proven results and greater profits to many new and existing customers. On average, the following results have been delivered: ■ an average savings of $929,955 annually per customer ■ an average savings of $6,461 per truck per year

So if you’re wondering whether Shaw Tracking is right for you, ask yourself this: With greater control over your operations and profits, can you afford to go without it? Call 1.800.478.9511 or visit SHAWTRACKING.CA for more information.

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TheBottomLine

working the room, finally How I’m learning to make this generation’s version of the cocktail party work for me

’ve attended way too many social gatherings over the years hoping that my networking efforts would eventually put good-paying freight on my trucks. People my age call it “working the room.” I could never understand folks who attended cocktail parties but didn’t engage. Frankly, I wonder why they even bothered attending. It seemed like such a waste of time. Social media is this generation’s cocktail party. Networking sites are a place where like-minded people meet and share ideas. The day I began adding “friends” on Facebook was the day I thought I was on my way to joining the social media party. Fast-forward 12 months and my efforts produced a Facebook page that I look at less than once a month, 490 LinkedIn contacts I still don’t know, I follow Bob McKenzie on Twitter, and zero new business. I would have been better off printing brochures and cold calling. It seemed like such a waste of time. Looking back, I realized that I was the guy at the party in the corner waiting for the world to come to him. I never worked the room. Converting LinkedIn, Twitter, Google+, and other relationships into business is a lot more complex than I anticipated. Here are some thoughts and a few things I’m going to try to improve my results this year.

1. Getting to the Party My limited tech skills consist of hitting “on” and “accept” buttons, but my instincts about what makes people tick are pretty sharp. As I was eating my Corn Flakes one morning, watching my kids thumb away at their fancy smart phones, I saw that social media works best when you can access it anywhere. Nearly 45% of active Facebook users currently access the site through their mobile device. It’s close to 55% for Twitter 8

users. I’m not among them. By the time I find a WiFi connection and boot up my laptop, I’m busy doing something else. So I’m upgrading my Fred Flintstoneage Blackberry to something that runs the mobile apps I need, and I’ve enlisted three consultants to help their dumb Dad get in the game.

2. Find the Right Party LinkedIn has hundreds of transportation and logistics-related discussion groups and blogs. Joining them was easy. Getting benefits from these groups was not. Everyone who posted either was tooting their own horn, looking for a job, or trying to sell me a something. It was like entering a room with 100 noisy Liberals. I tuned out. I have cut back to two discussion groups: one personal and one professional. Starting small will give me a better chance to follow and join conversations. Experimenting in a subject I’m passionate about – yep, hockey – adds a fun factor while I learn the ins and outs of working the room. This year, if the party isn’t any fun, I won’t be hanging around very long.

3. Shake Some Hands Extending your hand used to be the best way to greet new people. Today, shaking someone’s hand means posting a compelling article, commenting on someone’s blog, or asking a group for advice. There is no way you’ll meet anyone at a party unless you reach out and say hi. The goal is not to sell; it’s to attract. It’s more important to be a trusted and reliable source of information than a pushy freight pimp. Don’t be an online Herb Tarlek and run around the party flogging brochures that no one is interested in. Business will come over time as you learn to convert friends to followers to customers.

Mike McCarron is the managing partner at MSM Transportation (www.shipmsm.com) in Bolton, Ont., which specializes in moving products between Canada and the rest of the world. He can be reached at mmccarron@shipmsm.com or @AceMcC on Twitter.

4. Build Relationships The end game is all about shekels and learning how social media can improve my company’s bottom line. Following customers, competitors, and suppliers can deliver loads of critical and timely information you can use daily to improve your business. Before any meeting, I’m using social media to learn as much as I can about the company and the person I’m about to do business with. You can never have enough current information on existing customers, employees, or the dog trying to steal your bone.

5. Talk to Me As a columnist, I get truckloads of requests from companies asking me to write about their $29.99 gadget that guarantees 35% fuel savings. Since I’ve been putting pen to paper professionally, it’s been a policy of mine never to overtly promote anything including my company or me. But I will say this: I’m officially on Twitter at @AceMcC (I signed up on my own, without help from kids). I invite you to follow me, check out who I follow, and ask questions about trucking. Or hockey. Either way, I look forward to working the room and getting to know you. mt

MOTORTRUCK

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FIGHt ENGINE SLUGGISHNESS. ARM YOURSELF WITH DURON.

DURONTM-E – the leading soot-fighting formula in the industry. It seeks out soot particles and isolates them before they can join forces. And if they can’t cluster, your engine is defended from damage. Today’s operating conditions can produce and retain more soot than ever before. But DURON-E, formulated with 99.9% pure base oils, is engineered to go above and beyond the call of duty. It’s proven to handle up to 2x more soot* while maintaining its viscosity; protecting engines from wear, extending drain intervals, maintaining peak fuel economy, and reducing maintenance costs for fleets – even in the heaviest soot conditions. That keeps costs down over the long haul and extends the life of your engines. Get the most from your fleet. Learn more at fightsoot.com

DURON. Fight Soot. Save Money. *Based on MACK T-11 Enhanced Soot Control Test results. DURON-E Synthetic 10W-40 performed 2.2x better than CJ-4 requirement, while maintaining viscosity level.

Petro-Canada is a Suncor Energy business TM

Trademark of Suncor Energy Inc. Used under licence.

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Taking Care of Business

thinking of selling your transportation company? A Retirement Compensation Arrangement could be your way to a flexible pension plan

emographics dictate that as many as 80% of small business owners will either sell or pass on their businesses to heirs over the next 10 to 15 years. There are many ways to free up a significant amount of the wealth tied up in your business, but how do you complete this transfer and incur the least amount of tax? “Owners of small businesses are generally experts in their fields, but likely unaware of the intricacies of orchestrating a tax-efficient sale,” says Michael Soble of the Reynolds Soble Group at CIBC Wood Gundy. “And they may not have a professional advisor, like a lawyer or accountant, who is familiar with all of the options.” One often-overlooked strategy is the use of a Retirement Compensation Arrangement (RCA). Properly structured and implemented, it will drastically reduce the overall tax impact of a sale and provide a creditor-proof, flexible and tax-efficient pension plan. Business sales typically involve assets or shares. Most owners prefer to sell the shares and gain access to the $750,000 lifetime capital gains exemption, while purchasers prefer buying the assets. The tax treatment on each type of sale is different, but an RCA is particularly useful when the sale involves the assets. The rules surrounding the establishment, funding, ongoing management and withdrawals from an RCA are complex, but to summarize: an RCA is established under the rules of the Income Tax Act, and allows a company to make tax deductible contributions on behalf of key employees to build a retirement pension. The contribution guidelines are generous (compared to RRSP limits) and actuarially determined 10

based on income and years of service. Funds are not locked-in as they would be in a normal pension plan, they are creditor protected; withdrawal rules allow for flexibility in terms of timing and amounts; and there are few investment restrictions. “The bottom line is that once the RCA is reasonably funded (which can be from the proceeds of a sale of assets), there is a great deal of flexibility as to how the money can be invested, the amount and the timing withdrawals, and even passing along RCA assets to spouses and other beneficiaries,” says Soble. Here’s a simple example. Assume the following:  Business assets sold for $3 million net proceeds.  A $3 million RCA contribution is determined to be reasonable under Canada Revenue Agency guidelines.  If there is no RCA, the owner will bonus this out, pay tax personally and invest the remainder.  Investments earn 5% annually.  The owner requires $190,000 per year, net of taxes, for the next 10 years from his investments, or from the RCA. With no RCA, sale proceeds are $3 million, personal taxes (Ontario) are almost $1.4 million (46%), Ontario payroll tax is $58,500 (1.95%), the balance after tax is almost $1.6 million and annual withdrawals are $190,000. With an RCA for one, there are no personal taxes and no payroll tax with a balance of $3 million and annual withdrawals are $190,000. Same for an RCA that adds a spouse, both in after-tax dollars. But the gross that must be withdrawn from the

Mark Borkowski is president of Mercantile Mergers & Acquisitions Corporation. Mercantile specializes in the sale of mid-market companies. Mark can be contacted at www.mercantilemergersacquisitions.com.

RCA each year is higher since it’s subject to full taxation. For a one-employee RCA, withdrawal of $321,486 less tax of $131,486 = $190,000 net. With no RCA, withdrawals are mainly from after-tax income. After 10 years, the balance for no RCA is $67,322, $334,504 for a one-employee RCA, and $704,096 for an employee plus spouse. (The employee plus spouse RCA assumes equal T4 income from the company over the years.) “We are seeing more opportunities for RCAs pop up in connection with business owners as they start to actively plan for selling their businesses,” says Mike Reynolds, also of the Reynolds Soble Group. Establishing an RCA is complex and requires specialist input in the areas of tax, actuarial review, accounting, and investment management, so there has to be enough dollars involved to make it worthwhile. However, the potential benefits are huge: immediate and future tax savings; significantly increased retirement income; and estate planning flexibility in the future. mt

MOTORTRUCK

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MORE TRACTION. MORE TREAD WEAR. Could the results get any more gripping? Introducing the BDR-HG. Bandagâ&#x20AC;&#x2122;s new performance leader for regional over-the-road and line-haul

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MaintenanceMatters Matters

no bad charges Are you performing battery conductance testing correctly? By Chuck Carman, curriculum developer, CARS

hile in the midst of another Canadian winter, the topic of battery strength is always a recurring theme. In the past, a failing battery would be evident by the battery’s inability to supply sufficient current to crank the engine. In today’s more sophisticated trucks, a failing battery may produce other faults before a no-start symptom appears. Batteries must be monitored and tested frequently to ensure the truck’s electrical system can supply enough power to each subsystem and start the engine in frigid temperatures. Over time, this testing procedure has changed and has become very reliable and repeatable. In the past, load testing a battery was common practice, consisting of testing for State of Charge (SOC) – to ensure the battery is capable of being tested – then applying an appropriate load to the battery. This required the battery to supply a large amount of current through the tester. The technician had to then make an experienced judgment on the battery’s overall health based on these readings. While this test worked well, it also had some disadvantages. The first being the technician’s safety; wet batteries contain acid and expel explosive gases. The high current testing produces heat and can possibly produce a spark. Additionally, each individual battery had to be isolated from the system to be tested. This consumes time, and some systems require constant battery power so they do not lose data stored in their memory. The battery testing process has been vastly improved upon by electronically testing a battery’s impedance (the resistive portion of a battery) and conductance. Lab-

oratory testing has shown that the battery’s internal impedance increases as the battery ages and begins to deteriorate; therefore, the battery’s conductance decreases. The conductance measurement translates into a measurement of the battery’s Cold Cranking Amps rating (CCA) and to the State of Health (SOH) of each cell. This gives a calculated picture of the usable plate surface area. This usable plate surface is important as it determines the capacity of the battery to hold a charge. A battery may be 100% charged, but due to a low usable plate surface area (mostly due to water loss, increasing the acid concentration which leads to increased sulfation), it will have a reduced capacity. To test a battery, use a specialized tool called an electronic battery analyzer. The tool applies a small, brief AC voltage at a known frequency and amplitude across the battery terminals. The tool then records the current that flows through the battery, measuring the shift in the frequency phase against a reference point. This test will produce data used to calculate the battery’s impedance and to determine conductance. The conductance measurement will provide the necessary battery information without having to bring the battery to a full discharge. When a battery is fully discharged, its conductance and capacity are reduced. Some analyzer tools may also include a pulsed DC impedance test to further refine the final results. This test creates a condition where a charge is alternately put in and taken out of the battery cells. This produces a small load on the cell and involves a very small amount of energy. These conductance tools provide a more accurate evaluation of the battery’s

overall health. The results are recordable and can be used to monitor each battery’s performance and to predict battery life on a truck. The test results are repeatable to ensure their accuracy, removing much of the technician’s judgment from the equation and factoring in battery internal temperature and ambient temperature. Electronic battery analyzers provide the advantages of being much safer to use and connect since they consume very low levels of current to perform the tests. They can be used while the batteries are still connected to the truck, saving preventative maintenance and diagnosis time. Also, many models can test multiple batteries while they are still interconnected. Many of the newer electronic battery analyzer tools include software algorithms to test the larger group 31, 4D and 8D batteries. Many analyzers can also test the starter operation and the generator output, even isolating out failed diodes and internal winding faults. They may also perform battery cable voltage drop testing, supplying clear meter connection instructions to verify the cable’s internal resistance – a test often overlooked or incorrectly measured. Some tools even include digital multimeter functions, such as an ohm meter. Used as a preventive maintenance tool and a diagnostic tool, these valuable pieces of equipment can reduce potential downtime. Operation of these tools requires little training and will serve as reliable timesavers for technicians who perform maintenance. mt For more information on truck technology visit TRUCKS OnDemand training at: www.trucksondemand.ca.

MOTORTRUCK

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PURITY ISN’T JUST OUR GUARANTEE. IT’S OUR OBSESSION. To maximize your engine performance and fuel efficiency, we guarantee the purity of every bottle of our H2Blu Diesel Exhaust Fluid (DEF). When just 1 teaspoon of salt can contaminate an entire 20,000 Litre tanker of DEF, that promise is very hard to keep. That’s why we obsessively guard and test each batch of our product every step of the way, from manufacturing, to bottling, to delivery. Because when the performance of your fleet depends on the purity of your DEF, there’s no such thing as being too careful.

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Profitability

think ahead

Shifting modal picture calls for new corporate skills By Daniel Vendette, MBA, CITT

everal trends are forcing transportation companies, and those who use their services, to develop new skills in order to compete successfully. Consider these examples: Oil Depletion: Many experts predict “peak oil production” in 2015, after which global production will decline. This means a push for more energy-efficient solutions. Labour shortages: The transportation sector is seeking to fill some 400,000 truck driving jobs, forcing transportation companies to look for alternatives that are less labour-intensive. Carbon costs: Whether it takes the form of a carbon tax, cap-and-trade, or some other mechanism, it appears inevitable that there will be a price placed on carbon emissions in order to finance measures taken to offset or otherwise counterbalance the effects of those emissions. Consequently, companies will seek low-carbon alternatives. Freight Collaboration: Industries and academics now are looking at “transportation grid” in order to improve the utilization of assets and volumes. This could create the next big wave in transportation and in collaborative supply chain.

Transportation moves into the C-suite These trends have heightened corporate focus on transportation costs and attracted the attention of senior executives – particularly when such costs have not been budgeted and impact profit margins. Many executive teams now view transportation costs as critical to budgeting exercises, and ask their logistics managers to account for 14

the total cost of moving product and to consider all available options for minimizing the impact of freight costs. Transportation planning, therefore, will continue to play a greater and greater role in corporate decision-making, including decisions made at the C-level. Transportation customers, as well as providers, will need to develop their abilities to talk in terms that executive-level decision makers find compelling; for example, steps that carriers are taking to add value to their service offerings, such as managing their costs or generating better transportation alternatives.

Changes require new ways of thinking, working With fuel, labour and carbon all becoming more costly, we are likely to see a shift from high-cost modes such as expedited truck freight and air, towards more cost-effective solutions such as intermodal, grouping, and collaboration between firms. The old adage of “thinking outside the box” could play a more prominent role in designing transportation programs. For example, if 10 companies located close to each other all import from China, they should evaluate the potential benefits of combining their individual purchasing power when shopping for transportation services. This might involve switching from 20-ft containers to 45-ft units that contain freight for several different consignees, thus reducing their per-unit freight cost. This principle also applies to continental transport. These creative new methodologies require businesses to develop greater flexibility in their transportation choices and possibly build in longer lead times. Operations also may feel the impact. For example, with the need to maximize transportation efficiencies, companies may

need to replace small, frequent shipments of components and parts – popularized in the last century by Just-in-Time manufacturing – with larger, less-frequent shipments and on-site stockpiling or vendor management inventory. Instead of maintaining large, centralized distribution centres, companies may find it necessary to move back to a network that involves smaller, more dispersed distribution facilities that are supplied by truckload or rail. And we may see increased use of long-combination vehicles to maximize the freight that can be hauled by a single driver or driving team. For obvious reasons, the companies that are able to work with a wide range of transportation modes, either provided internally or through third parties, will be in a better position to respond to what may be a fastchanging future.

New technology, ways of working require new skills Information technology will be critical to success – for carriers and for those who use their services. It will also generate important career-enhancement opportunities for the people who work in these organizations and will have a critical impact on those demonstrating a strong resistance to change. We are on the edge of an information revolution in transportation, and much of the “new” technology is already here. For example, transportation management solutions offer a wide range of functionality, from parcel rate shopping to strategic network configuration, as well as carrier management, portfolio management and routing and scheduling capabilities. These capabilities mean that transportation management is becoming more of a science, and it is about more than just booking freight.

MOTORTRUCK

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Profitability It impacts the bottom line and the environ- – with, perhaps, less emphasis on instincts about how to plan a shipment and more on ment; the company’s carbon footprint. Companies and executives who use computer skills and the ability to identify technology to gain knowledge about their trends in the data produced. A company’s transportation portfolio will have tangible more experienced workers may need to data that they can use to position them- retool their skills in order to compete with selves better in the import and export recent graduates who have been trained games. Remember: what doesn’t get mea- with the latest technology. Increasingly, sured can’t be controlled. So the first step transportation companies may have to in gaining control is to measure; then you look outside their industry to find human have the ability to produce scenarios, un- resources capable of building the computderstand the impact of changes, and ulti- erized models and data-sharing networks mately implement. Of course, all of this needed to succeed in an information-intenmust be combined with accurate measure- sive environment. New technologies and the information ment and continuous improvement. One benefit is that senior executives will they produce will not just help firms in have detailed information that allows them their planning for greater cost efficiencies to compare costs and efficiencies for each – they will also help companies compete carrier and mode. Increasingly, they will in what is likely to become a carbon-conmake decisions based on objective criteria strained world. Independent auditors can rather than on “traditional” factors such as use the data to determine a company’s carwhich transportation salesperson has the bon emissions and support carbon credits or tax rebates based on reductions in that best professional sports tickets to offer! These changes also will require com- footprint. Companies looking to reduce Canadian Transportation & Logistics_LAD.pdf 1 carbon 8/29/11 footprint 2:19 PM will seek serpanies to hire people with the right skills their own

vice providers that have an edge in this area. In other words, the efforts in reducing their own carbon impacts will become a new source for competitive advantage among carriers. It seems clear that the current pressures – fuel scarcity and costs, driver shortages, and the rising cost of carbon impacts – will produce significant change in the transportation industry. The pressures will force better measurement at each step in the transportation process. They will induce generation of more information that, in turn, will support increasingly data-based negotiations between carriers and shippers and audit processes that encourage carriers find new ways to reduce costs and carbon impacts. mt Daniel Vendette, MBA, CITT is a senior manager and transportation subject matter expert with West Monroe Partners, based in the company’s Montreal, Que. office. He can be reached at 514-798-9835 or dvendette@ westmonroepartners.com.

CMY

january/february 2012

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GreentoGold waste not

Could small Canadian firm be first to effectively employ waste heat recovery in transportation sector? By James Menzies

s engine manufacturers look to improve the efficiency of their products to comply with impending fuel economy standards, one of the obvious advancements to explore is waste heat recovery; harnessing wasted energy produced by the inherently inefficient internal combustion engine. It’s estimated that as much as 30% of the energy produced by a diesel engine is lost through the tailpipe in the form of heat. Several engine manufacturers have hinted they are working on waste heat recovery systems that will capture that wasted energy and then use it to power certain aspects of the truck. However, such systems are still in the early stages of development. A small Canadian firm, meanwhile, has quietly designed a fully functioning auxiliary power unit (APU) powered solely by waste heat recovery, capable of providing heating, cooling and hotel load power for up to 10 hours without any fuel consumption. It’s also able to provide heating and cooling while the truck is in motion, providing fuel savings and eliminating the need for an AC compressor. Motortruck Fleet Executive was the first trucking news outlet to see the Hyper (Hybrid Power and Energy Recovery) storage system at work, at developer EnerMotion’s modest lab in Bolton, Ont. The project has been kept under wraps while all the necessary patents were filed by global legal giant Norton Rose. Now with the muscle of one of the world’s largest patent protection law firms behind it, EnerMotion president and CEO Jack MacDonnell is able to openly discuss the project. His excitement is palpable as he describes the system. “Several of the OEMs are looking at waste heat recovery technology and have 16

been for a year or so, but we’ve been developing this system for a number of years now, so we believe we are ahead of the curve,” MacDonnell said. MacDonnell assembled the team that would be responsible for the design of the system in 2007 and incorporated the company in 2008, just as oil prices were hitting record highs. Last summer, EnerMotion received a $1 million grant from Sustainable Development Technologies Canada and the Toronto Atmospheric Fund has since come to the table with some additional financing. Meanwhile, some of the first Canadian fleets to see the system at work have also come on-board; and they include some of the more sustainability-minded and technically-savvy companies in the business – not the types to be enamoured by an unproven or implausible technology. MacDonnell said JD Smith and Sons was so impressed, it has purchased a stake in the company and donated a truck for test trials. Challenger Motor Freight, Kriska Transportation and Loblaw have also committed to field-testing the system, MacDonnell added. Since an article detailing the system was published on Trucknews.com, four new demonstration partners came on-board, including Normandin Transport, Praxair, Dueck Bros. Trucking and Linamar Transportation. “Phase one is progressing well,” McDonell told Motortruck Fleet Executive in mid-January. “The first road-going Hyper system will be providing test data this month, with delivery of another Hyper system to one of our original partners shortly thereafter. We have been contacted by several potential joint venture partners and are proceeding with early discussions.” McDonnell added it will be several months before the company has consistent

operational road test data from the Hyper units involved in phase one of the program. So, what exactly has created all the interest? The premise behind the Hyper system is simple, even if the technology itself is not. MacDonnell describes it this way: “If you think of a bar fridge at the cottage; you plug it in and it runs a refrigeration cycle. That’s what we’re doing: we’re driving a refrigeration cycle without plugging into the wall. We’re using high temperatures to pressurize the system. There’s high-grade heat in those big diesel motors, anywhere from 300-800 degrees C. We just pull that heat out and drive this refrigeration cycle and we drive the heat cycle too. We massage those thermal conditions and store them – either hot or cold – and we can store 10 hours of 5 kW of energy within an hour of running this system.” Importantly, long-haul drivers will receive a full 10-hour rest cycle of heating, cooling and hotel load power without having to burn any fuel, MacDonnell noted. The driver uses the existing HVAC controls, as the unit is integrated with the truck’s existing dials and ducting. Regional fleets such as Loblaw and JD Smith and Sons are interested, he added, because their drivers can keep the cab comfortable without idling while waiting to load or unload. Based on metrics collected by EnerMotion and then supported by Canadian fleets, the company is expecting to reduce fuel consumption by 9% with its system, providing a payback in less than a year – as long as it works, that is. And proving its reliability in the field is the next step for the developer. “We’ve been simulating this thing, but it’s one thing in the lab and a different thing out on the road,” MacDonnell admitted. EnerMotion has been running its own

MOTORTRUCK

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GreentoGold trials on a 2003 International with a C12 Cat engine with 435 hp. So far, so good, the company claims. “From an engineering perspective, it’s now all about scaling components down,” MacDonnell explained. “Some of the components are over-engineered right now; they’re heavy and some are bulky. I don’t want to blow smoke out in the industry and say this is ready for primetime right now, but by the same token we can’t wait any longer.” MacDonnell realizes that with engine manufacturers developing waste heat recovery systems of their own, they’ll soon be competing for the same lost energy. “We want to partner with these guys and license the technology to them,” he said. “We have resisted the urge to knock on their doors until we have some units out

there. The time is now to tell them what we’re doing; we have to get out there and expose ourselves because we’ve been flying under the radar for too long.” The prototype system is similar to a trailer refrigeration unit in size and shape, and is mounted to the back of the cab. It weighs about the same as a diesel-powered APU and contains no moving parts. “The system ties into the stock exhaust,” Dave Gibbs, director of technological development, explained during a demonstration. “We capture some of that thermal energy and use it to drive our system, providing heating and cooling to the occupants both while the truck is in motion and while at rest. You no longer need to turn a mechanical air-conditioning compressor, because the system will do the cooling while

you drive. It makes no noise and the driver doesn’t have to do anything. It’s a very simple and very elegant system.” The Hyper system also provides engine pre-heating and even cooling of temperatures reach dangerous levels. With 20 units set to be deployed with some big name fleets across various duty cycles, MacDonnell figures it’ll be 12-18 months before the Hyper system is launched commercially. Meanwhile, the company is also studying other applications, such as using the same technology to refrigerate trailers. MacDonnell is understandably excited to get the message out. “Nobody’s doing this anywhere in the world,” he told us. “There are some industrial applications, but nobody is doing it at this scale.” mt

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Fleet Executive

TOP TIER Our annual look at the nationâ&#x20AC;&#x2122;s largest carriers and their strategies for continued growth

Sponsored by PEOPLENET CANADA MACK CANADA and CASTROL HEAVY DUTY LUBRICANTS JANUARY/FEBRUARY 2012

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From the Sponsors While Castrol is well known to most people around the world as the lubricant of choice for their car, pick-up truck or SUV, some people may not be as familiar with Castrol’s groundbreaking products for the Commercial/Heavy-Duty marketplace. Whether on-road or off-road, Castrol has developed a complete line of unique commercial lubricants that is second to none when it comes to protecting the vehicle investment of the owner/operator, commercial fleet or mining corporation. Castrol’s Heavy Duty lubricants are designed for the single purpose of making your fleet as reliable and profitable as possible. By understanding the increasing technological demands of today’s engines, and working directly with OEM manufacturers, Castrol has employed the latest information, along with our extensive knowledge of commercial lubricants to develop a full line of products to help you get the most out of your equipment. Congratulations to all Top Tier 100 fleets highlighted and continued success in 2012. Mack Trucks Canada has been serving the needs of the fleet market in Canada since 1921. Over the years, Mack has built up an extensive dealer network of almost 100 sales, parts and service locations across the country. Many truckers and fleet owners started their careers and businesses with Mack B models and R models. The Mack Vision models also became very popular in the 1990s and now Mack has introduced a new engine and a new model that replaces the Vision. The Mack Pinnacle, with its redesigned interior and bigger cab, is an ideal fleet truck that is available in both daycab and sleeper configurations. The all new Mack MP series of engines with ClearTech emissions technology provides up to 505 hp and better fuel economy. They are well suited for both local and long-haul applications. Mack is also one of the first truck manufacturers to make anti-roll stability a standard feature on all of its 2008 and later highway truck models. PeopleNet increases the efficiency, improves the safety, and advances the profitability of fleet owners through the use of highly configurable and innovative solutions. PeopleNet’s suite of products enable an ever-growing set of high-value applications, including route management, supply-chain communications, end-to-end vehicle management, driver services, and safety, security and compliance. Anticipating your needs before potential problems happen. That’s the level of commitment you can expect from PeopleNet. It goes beyond the support involved in implementing a system. From project management to conducting a complete process flow analysis and implementation, PeopleNet can help improve operations on any level. 20

TOP TIE Your annual in-depth report on the capacity, capabilities and insights of the nation’s largest carriers.

motortruck

TOP TIER P.20-33_JAN2012.indd 20

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IER

elcome to our seventh annual Top Tier report, offering a comprehensive look at the nation’s largest for-hire carriers. In the following pages, you will find detailed and up-to-date information about the capacity and capabilities of the 100 largest for-hire motor carriers in Canada, as well as the next 25. This exclusive data is from annual research conducted on behalf of our research arm, Transportation Media research. This year’s Top Tier report reflects a for-hire carrier industry in transition. Belt tightening is slowly giving way to cautious optimism for growth, albeit much slower and volatile growth than we’ve experienced during previous economic recoveries. Canadian Class 8 truck sales rebounded in 2011 buoyed by years of deferred purchases – four fifths of Canada’s Class 8 truck fleet is more than five years old. Research shows there is a financial penalty associated with hanging on to older trucks. While maintenance costs average out to about five cents per mile for trucks with under 550,000 miles on them, maintenance costs rise to about 15 cents per mile once that 550,000 mile threshold is reached. Class 8 sales in 2011 (with one month left to report as of press time) were running above the five-year average and were significantly better than the sales figures posted in 2010, 2009 and 2008 and also better than the YTD results of 2001, 2002 and 2003. Industry analysts believe the moderately strong performance in Class 8 sales experienced in 2011 can be attributed to pent-up demand to renew aging fleets rather than a willingness among fleet executives to once again grow their fleets. Reduced capacity and a more conservative approach to fleet size growth is already helping carriers improve their margins through better asset utilization. If anything, carrier executives are looking to grow through acquisition in future years rather than through organic growth as our accompanying feature on mergers and acquisitions activity points out. Be sure to also check our tables showing the fleets owned by four of the largest and most aggressive acquirers in recent years, Transforce, Contrans, Calyx, and Day and Ross. This comprehensive guide is not intended as a mere tally of vehicle counts. In fact, we have chosen not to list the top 100 carriers by size. The top 100 carriers are listed in alphabetical order because we believe that after a certain threshold, optimum fleet size is a reflection of the different markets these fleets are meant to serve. I would also like to thank the sponsors of our Top Tier report, PeopleNet Communications, Mack Canada and Castrol who continue with their support. Their involvement is instrumental in helping us deliver such a comprehensive report. We hope our report serves as a tool not only for the largest carriers to keep tabs on their competitors, but also as a tool for the smaller and medium-sized fleets to contrast their buying strategies with the industry’s largest and gain a fuller understanding of industry issues as they begin to rebuild their companies. I also hope you will continue the conversation on issues affecting all transportation modes by joining me in the Transportation Track at the upcoming Supply Chain Canada conference, May 8-9, at the International Centre in Toronto. Go to www.supplychaincanada.com to register.

Lou Smyrlis Editorial Director Transportation Track Chair

january/february 2012

TOP TIER P.20-33_JAN2012.indd 21

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Company Name

THE TOP 100

Apex Motor Express Armour Transportation Systems Arnold Bros. Transport Arrow Transportation B&R Eckel’s Transport Big Freight Systems Inc. Bison Transport Inc. BLM Group Bruce R. Smith Limited Calyx Group of Companies Canada Cartage System Canadian Freightways (TransForce) Canadian National Transportation Ltd (CNTL) Canpar Transport (TransForce) Caron Transportation Systems CAT Inc. Celadon Canada Challenger Motor Freight Clarke Transport Inc. Concord Transport (TransForce) Consolidated Fastfrate Inc. Contrans Flatbed LP (Contrans) Contrans Group Inc. Cooney Group of Companies Day and Ross (Day and Ross) Day and Ross Dedicated Logistics (Day and Ross) Day and Ross Transportation Group DCT Chambers Trucking Dynamex (TransForce) Erb Group of Companies Fastrax (Day and Ross) Fluke Transportation Group Gibson Energy ULC Grégoire (TransForce) Groupe Boutin Groupe Guilbault Ltee. H & R Transport Limited hbc Logistics Hemphill (TransForce) Hercules Highland Transport (TransForce) Hyndman Transport International Truckload Services (ITS) JC Germain (TransForce) Kindersley - Siemens Transportation Group Kingsway Transport (TransForce) Kleysen Transport Kriska Laidlaw Carriers Tank LP (Contrans) Laidlaw Carriers Van LP (Contrans) Landtran Systems Inc. Loomis Express (TransForce) Mackie Moving Systems MacKinnon Transport Manitoulin Transport Group Maritime-Ontario Freight Lines McKevitt Trucking Meyers Transport Ltd. Midland Transport Ltd. Muir’s Cartage (Calyx) Mullen Trucking LP Musket/Melburn Group Normandin Transit Northern Industrial Carriers Paul’s Hauling Ltd. Penner International Purolator Courier QuikX Group of Companies Reimer Express Lines Ltd. Robert Transport (1973) Ltd. Rosedale Transport Rosenau Transport Schneider National Carriers SGT 2000

Headquarters

Customer Line

Web Address

Operating Area

Brampton, ON Moncton, NB Winnipeg, MB Richmond, BC Bonnyville, AB Steinbach, MB Winnipeg, MB Kitchener, ON Simcoe, ON Concord, ON Toronto, ON Calgary, AB Concord, ON Mississauga, ON Sherwood Park, AB Coteau du Lac, QC Kitchener, ON Cambridge, ON Concord, ON Toronto, ON Woodbridge, ON Hagersville, ON Woodstock, ON Belleville, ON Hartland, NB Brampton, ON Hartland, NB Vernon, BC Dallas, TX New Hamburg, ON Florenceville, NB Hamilton, ON Calgary, AB Plessisville, QC Plessisville, QC Quebec City, QC Lethbridge, AB Mississauga, ON Greenwood Village, CO North York, ON Markham, ON Wroxeter, ON Belleville, ON Trois-Rivieres, QC Saskatoon, SK Toronto, ON Winnipeg, MB Prescott, ON Woodstock, ON Guelph, ON Edmonton, AB Brampton, ON Oshawa, ON Guelph, ON Gore Bay, ON Brampton, ON Thunder Bay, ON Belleville, ON Dieppe, NB Concord, ON Aldersyde, AB Mississauga, ON Napierville, QC Edmonton, AB Winnipeg, MB Steinbach, MB Mississauga, ON Mississauga, ON Winnipeg, MB Rougemont, QC Mississauga, ON Edmonton, AB Guelph, ON St-Germain-de-Grantham, QC

800-895-APEX 506-857-0205 800-665-8085 604.324.1333 780-826-3889 800-665-0415 800-GO-BISON 800-265-2743 888-277-6484 905-695-3841 800-268-2228 888-868-7923 888-MOVINCN 800-387-9335 780-449-6688 800-363-5313 800-265-6467 800-265-6358 800-387-3558 416-679-7400 800-268-1564 800-263-8383 800-819-5259 613-962-6666 866-DAY-ROSS 905-799-6500 866-DAY-ROSS 250-549-2157 214-560-9515 800-665-2653 506-392-2600 800-263-4843 403-206-4000 800-461-8813 800-267-4509 800-361-2093 403-328-2345 416-644-2700 877-797-7666 800-822-4512 (Canada) 800-268-1729 800-265-3071 800-267-1888 x 175 819-370-3422 800-667-8556 800-856-5559 888-488-6878 800-461-8000 800-465-8265 800-263-8267 780-468-4300 855-256-6647 800-565-4646 800-265-0444 800-461-1168 905-792-6100 807-623-0054 800-565-3708 888-MIDLAND 800-646-2013 800-661-1469 905-823-7800 800-667-8780 780-465-0341 204-633-4330 866-729-7134 888-744-7123 800-461-8023 877-330-3321 800-361-8281 877-588-0057 800-371-6895 800-461-3168 800-363-4216

www.apexltl.com www.armour.ca www.arnoldbros.com www.arrowtransportation.com www.breckels.com www.bigfreight.com www.bisontransport.com www.blm.com www.brsmith.com www.calyxinc.com www.canadacartage.com www.canadianfreightways.com www.cn.ca www.canpar.com www.carontransport.ca www.cat.ca www.celadoncanada.com www.challenger.com www.clarkelink.com www.concordtransportation.com www.fastfrate.com www.contransflatbedgroup.com www.contrans.ca www.cooney.ca www.dayross.ca www.dayross.ca/dedicated www.dayrossgroup.com www.dctchambers.com www.dynamex.com www.erbgroup.com www.fastrax.ca www.fluke.ca www.gibsons.com www.transforcecompany.com www.boutinexpress.com www.groupeguilbault.com www.hrtrans.com www.hbc.com www.hemphillspeedy.com www.herculesfreight.com www.highlandtransport.com www.hyndman.ca www.itstruck.ca www.transforcecompany.com www.siemenstransport.com www.kingswaytransport.com www.kleysen.com www.kriska.com www.contrans.ca www.contrans.ca www.landtran.com www.loomis-express.com www.mackiegroup.com www.mackinnontransport.com www.manitoulintransport.com www.m-o.com www.mckevitt-trucking.com www.shipmts.com www.midlandtransport.com www.muirscartage.com www.mullentrucking.com www.musket.ca www.normandintransit.com www.nictrucking.com www.paulshauling.com www.penner.ca www.purolator.ca www.quikx.com www.reimerexpress.com www.robert.ca www.rosedalegroup.com www.rosenau.org www.schneider.com www.sgt2000.com

Multi-Regional Multi-Regional, North America, International Multi-Regional, North America North America Multi-Regional North America Multi-Regional, North America, International North America Multi-Regional, North America * see listings for individual fleets Multi-Regional, North America North America North America Multi-Regional, North America, International Multi-Regional, North America Multi-Regional, International, Mexico Multi-Regional, North America, International Multi-Regional, North America, International Multi-Regional North America North America North America *see listings for individual fleets Multi-Regional, North America North America North America *see listings for individual fleets Multi-Regional, North America North America Multi-Regional, North America North America North America Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America International Multi-Regional, North America North America North America Multi-Regional, North America North America Multi-Regional, North America, International Multi-Regional, North America North America Multi-Regional, North America North America Multi-Regional, North America North America North America International Multi-Regional North America North America International Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America North America North America Multi-Regional, North America North America International North America Multi-Regional, North America, International Multi-Regional, North America Multi-Regional, North America Multi-Regional International North America

D, D, D, D, D, F,I D, D, D,

LEGEND: THE TOP 100 were chosen according to vehicle counts which included straight trucks, tractors, trailers and intermodal containers domiciled in or controlled from Canada. Top 100 carriers are listed in alphabetical order. Both parent company and holdings shown if large enough. Companies not reporting new capacity figures for more than two years are removed from the list.

TOP TIER P.20-33_JAN2012.indd 22

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D, LT D, P D, D, D, D, D, E,L D, FB

D, LT D,

D, D, D, F,I D, DB L,T D, D, I,L D, D, LT D, L,T D, D, E,F I,L DB L,T DB TL D, P D, D, D, D, D, D, D, D, D, D, E,F D, D, D, D, E,I D, D, D, D, D, DB

national

national national

national

A capacity and capability guide for the country’s largest motor carriers. By John G. Smith Primary Service D, I, LTL, TL D,E,F,I,L,LB,LTL,P,TC,TL D,E,F,L,P,TC,TL D,DB,F,I,L,LB,TL D,DB,E,F,I,L,LB,LTL,TC,TL F,I,L,TL D,E,I,L,TC,TL D,E,F,LTL,TC,TL D,F,L,LTL,TC,TL D,DB,E,F,HG,L,LB,LTL,TL LTL D,E,F,I,L,TC,TL P D,DB,F,L,LB,TL D,DB,E,L,TL D,E,I,L,LTL,TL D,DB,E,F,I,L,LTL,TC,TL D,F,I,L,LTL,TC,TL E,L,LTL,TL D,E,I,LTL,P,TC,TL FB,TL D,DB,F,I,TL LTL,TC,TL D,L D,DB,F,LB,TL D,E,F,LTL,P,TL D,E,L,LTL,TC,TL F,I,TC,TL,VC D,DB,E,F,L,LTL,TC,TL DB,LB L,TL D,E,F,I,L,LTL,TC,TL D,I,L,LTL,TC,TL I,L,TC,TL D,I,TL D,F LTL,TL D,E,I,L,TC,TL L,TL D,E,F,I,L,TC,TL D,DB,F,HG,LTL,TC,TL E,F,HG,I,L,LTL,P,TC,TL I,LTL DB,F,I,L,TC,TL L,TC,TL DB,LB,TL TL D,E,F,L,LTL,TC,TL P D,E,HG,I,L,LTL,TL,VC D,F,DB L, LTL,TL D,E,F,I,L,LB,LTL,P,TC,TL D,DB,E,F,I,L,LB,LTL,TC,TL D,F,L,LTL,TC,TL D,E,L,LTL,TC,TL D,E,I,LTL,P,TC,TL D,TL D,E,F,L,LTL,TL D,I,TL E,F,L,LTL,TC,TL,VC D,E,I,TL D,DB,E,L,LB,TL D,E,LTL,TL D,E,LTL,TL E,I,L,LTL,TC,TL D,E,LTL,TL D,DB,E,F,I,L,LB,LTL,TC,TL D,E,I,L,LTL,TC,TL D,DB,E,F,I,L,LB,LTL,P,TC,TL D,DB,E,I,L,LB,TL DB,E,F,I,L,LTL,TC,TL

Straight Trucks 100 150 3 180

14 400 798 1 2 0 2 40 1 37 557 164 955 827 152 1 18 70 5

63 42 4 3 40 19

8 891 20 83 142 7 100 8 3 10 0 164 35 10 50 65

Tractors

Trailers

160 900 350 350 195 200 1050 125 285 227 1681 385 800 77 233 378 325 1500 335 74 500 220 1,139 255 702 202 1198 283 81 661 235 200 600 136 270 325 650 150 145 172 244 195 365 156 640 424 250 400 230 188 215 65 225 215 740 381 180 190 789 211 145 210 302 150 241 359 492 550 475 1000 325 260 400 358

415 2950 850 1000 935 400 3000 400 770 1255 2250 1,225 7000 319 545 1200 900 3500 655 164 750 404 2,176 1000 1937 600 3079 745 200 1045 373 500 2000 416 650 1400 1125 1100 325 291 573 515 1090 521 1778 1,162 500 1300 361 476 503 405 420 622 1490 855 500 624 1550 954 411 125 744 1200 620 825 1171 1075 1281 2850 1013 930 1200 1100

Containers 350 10 200 292 7000

357 400

7 61 600

124

20 600

6 440 35

650

300

300 230

Terminals

Web

13 25 5 27 15 6 6 2 7

V,R,C V,R V,R,C R V, R V,R,C V,R,C V V

24 23 16 54 6 8 1 7 11 6 17 4

V,R,C V,R,C V, R V,R,C V V,C V,R,C V,R,C V,R,C V,C V,R,C

7 34 15 62 5 45 11 5 1 15 2 7 13 10 9 8 24 4 2 6 2 19 13 5 3 2 2 14 72 4 1 68 22 4 10 23 3 2 3 1 4 6 6 123 17 21 16 14 18 1 8

V,R,C V,R,C V,R,C V,R V V,R V,R,C V V,R,C V,R,C V,R,C C V,R,C V,R V V,R,C V V,R V,C V,R,C V,R,C V,R,C V,R,C V,R,C V,R,C V,R V,R,C V,R,C V,R,C V V,R,C V,R,C V,R,C V,R,C V,R V,R,C V,R,C V,R,C V,R V,R,C V,R,C V

CODES: Operating Area: Regional – One province/state; Multi-regional – Selected provinces/states; North America – Canada, US; International – Canada, US, Mexico/Other; Types of Service: D – Dedicated Contract; DB – Dry Bulk; E – Expedited; F – Flatbed; HG – Household Goods; I – Intermodal; L – Logistics; LB – Liquid Bulk; LTL – Less-than-Truckload; P – Package; TC – Temperature Controlled TL – Truckload; VC – Vehicle Carrier; Web Services: Web Visibility – tracking and tracing (V); Web Reports – downloadable reports (R); Web Custom – customizable reports (C).

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TOP 100 – continued Company Name

Headquarters

Customer Line

Web Address

Operating Area

Shadow Lines Transportation Group Simard Transport SLH Transport Sokil Transportation Group Speedy Transport Sunbury Transport Ltd. System 55 Transport Thomson Terminals Ltd. TransForce Inc TransFreight Transport Morneau TransX Group of Companies Travelers Transportation Trimac Transportation Ltd. TST Overland Express (TransForce) TVM Ltd. UPS Freight V.A. Inc. – Transport-Logistix Van Kam Freightways Verspeeten Cartage Ltd Vitran Express Canada Warren Gibson Williams Moving and Storage Wilson’s Truck Lines Limited XTL Transport Yanke Group of Companies

Langley, BC Lachine, QC Kingston, ON Edmonton, AB Brampton, ON Fredericton, NB Oakville, ON Rexdale, ON Montreal, QC Kitchener, ON Ste-Arsene, QC Winnipeg, MB Brampton, ON Calgary, AB Mississauga, ON Cottam, ON Mississauga, ON Laurier Station, QC Surrey, BC Ingersoll, ON Toronto, ON Alliston, ON Coquitlam, BC Etobicoke, ON Toronto, ON Saskatoon, SK

800-663-1421 514-636-9411 800-661-2146 800-661-9923 905-455-8005 800-SUNBURY 800-268-5070 800-771-7487 514-331-4000 859-372-5935 514-325-2727 800-665-7392 800-265-8789 403-298-5100 888-878-9229 800-749-6960 800-PICKUPS 800-363-8175 888-229-9889 800-265-6701 800-263-9588 800-461-4374 877-410-9411

www.shadowlines.com www.simard.ca www.slh.ca www.sokil.com www.speedy.ca www.sunbury.ca www.system55.com www.thomsongroup.com www.transforcecompany.com www.transfreight.com www.groupemorneau.com www.transx.com www.travelers.ca www.trimac.com www.tstoverland.com

North America Multi-regional Multi-regional, North America North America Multi-Regional North America Multi-Regional, North America Multi-Regional, North America * see listings for individual fleets International Multi-Regional Multi-Regional, North America, International North America International Multi-Regional, North America, International Multi-Regional, North America International Multi-Regional Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America International Multi-Regional, North America North America North America

D,E D,E D,E D,E LTL DB D,F D,E

The next 25

800-361-5576 800-667-7988

www.ups.com www.vatransport.com www.vankam.com www.verspeeten.com www.vitran.com www.warrengibson.com www.williamsmoving.com www.wilsonlogistics.ca www.xtl.com www.yanke.ca

D,E D,E D,E D,E D,D D,D D,E E,I D,L D,E D,I E,I F,I, D,D D,L D,T D,E

Company Name

Headquarters

Customer Line

Web Address

Operating Area

ATS Retail Solutions (TransForce) Besner (TransForce) Cavalier Transportation Services DeckX Transport (QuikX) Empire Transportation Entrec Transportation Services, Ltd. Golden International (TransForce) GTL Transportation Inc. ICS Courier (TransForce) International Freight Systems Kingsway Bulk (TransForce) Kos Oilfield Transportation (TransForce) Laidlaw Carriers Bulk LP (Contrans) McArthur Express (TransForce) Mill Creek Motors Muskoka Transport P&W Intermodal / MTMX Logistics (TransForce) Papineau International (TransForce) Sameday Worldwide (Day and Ross) Total Logistics Trucking Trans4 Logistics (TransForce) Transport Couture et fils (TransForce) Transport Herve Lemieux Tri-Line Carriers LP (Contrans) Westfreight Systems (TransForce)

Toronto, ON St-Romuald, QC Bolton, ON Calgary, AB Grimsby, ON Calgary, AB Bois-des-Filion, QC Dartmouth, NS Mississauga, ON Tilbury, ON Pintendre, QC Drayton Valley, AB Woodstock, ON Cambridge, ON Ayr, ON Bracebridge, ON Oakville, ON Saint-Jerome, QC Mississauga, ON Toronto, ON Mississauga, ON Saint-Éphrem-de-Beauce, QC St-Laurent, QC Rocky View, AB Calgary, AB

416-679-7969 800-463-4460 800-263-2394 403-277-1166 800-263-0240 403-777-1644 450628-0787 902-468-3100 888-427-8729 519-682-3544 800-263-3642 780-542-6773 888-209-3867 800-668-9691 800-265-7868 800-461-5808 905-815-9412 800-363-3666 905-676-3750 888-827-8521 905-212-9001 418-484-2104 514-337-2203 800-661-9191 403-279-8388

www.atssolutions.ca www.transforcecompany.com www.cavalier.ca www.transx.com www.empiretrans.com www.entrectransport.com www.transforcecompany.com www.gtltransportation.com www.ics-canada.net www.international-freight.com www.transforcecompany.com www.kosoilfield.com www.contrans.ca www.mcarthurexpress.com www.millcreek.on.ca www.muskoka-transport.com www.mtmx.ca www.transforcecompany.com www.sameday.ca www.totallogistics.com www.trans4.com www.tcfl.com www.transportlemieux.com www.contrans.ca www.westfreight.com

Multi-Regional North America North America Multi-Regional, North America Multi-Regional, North America, International Western Canada Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America North America Multi-Regional North America Multi-Regional, North America International Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America/International North America North America Multi-Regional, North America Regional Multi-Regional, North America Multi-Regional, North America

E,T D,H E,L D,E D,E DB D,F D,I P D,E DB TL TL D,E D,L F,L F,I D,H E,H D,E D,I L,L D,F FB F,L

Transforce owned companies Company Name

Headquarters

Customer Line

Web Address

Operating Area

TransForce Inc A&M International (TransForce) ATS Retail Solutions (TransForce) Bergeron-Maybois (TransForce) Besner (TransForce) Canadian Freightways (TransForce) Canpar Transport (TransForce) Concord Transport (TransForce) Transport Couture et fils (TransForce) Durocher International (TransForce) Dynamex (TransForce) Ganeca (TransForce) GHL Transport (TransForce) Golden International (TransForce) Grégoire (TransForce)

Montreal, QC East Angus, QC Toronto, ON Amos, QC St-Romuald, QC Calgary, AB Mississauga, ON Toronto, ON Saint-Éphrem-de-Beauce, QC St-Felix-de-Kingsey, QC Dallas, TX Carignan, QC Anjou, QC Bois-des-Filion, QC Plessisville, QC

514-331-4000 800-832-3865 416-679-7969 819-727-9404 800-463-4460 888-868-7923 800-387-9335 416-679-7400 418-484-2104 800-267-2042 214-560-9515 800-561-7444 800-589-3236 450628-0787 800-461-8813

www.transforcecompany.com www.transforcecompany.com www.atssolutions.ca www.transforcecompany.com www.transforcecompany.com www.canadianfreightways.com www.canpar.com www.concordtransportation.com www.tcfl.com www.durocherinternational.com www.dynamex.com www.ganeca.ca www.camionnageghl.com www.transforcecompany.com www.transforcecompany.com

North America Multi-Regional Multi-Regional North America North America Multi-Regional, North America, International North America Multi-Regional, North America North America North America North America Multi-Regional Multi-Regional, North America North America

L,T E,T D,D D,H LTL P E,L L,L F D,E HG LB D,F L,T

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ational

Primary Service D,E,I,LTL,TL D,E,I,L,LTL,TL D,E,I,L,LTL,TL D,E,F,I,L,LTL,P,TC,TL LTL DB,E,F,L,TC,TL D,F,L,TL D,E,F,L,TC,TL D,E,I,L,LTL,TL D,E,L,LTL,TC,TL D,E,F,I,L,LTL,TC,TL D,E,F,L,LTL,TC,TL D,DB,I,L,LB,TC D,DB,E,F,I,LTL,TC,TL D,E,I,L,TL E,I,L,LTL,P,TC,TL D,L,LTL,P,TL D,E,F,HG,I,L,LTL,P,TC,TL D,I,TL E,I,LTL,TL F,I,TL D,DB,E,F,HG,I,L,LTL,TL,VC D,L,TC,TL D,TL D,E,I,TL

Primary Service E,TL,LTL,P D,HG,L,TC,TL E,L,LTL,TL D,E,F,I,L,TL D,E,F,TL DB,L,LB,LTL D,F,L,LTL,TL D,I,LTL,TC,TL P D,E,F,TL DB,LB TL TL D,E,TL,LTL,L,LB D,L,TL F,L,TL F,I D,HG,L,LTL,TC,TL E,HG,L,LTL,P,TC D,E,F,I,L,LTL,TC,TL D,I,L,TL L,LTL,TL D,F,I,TC,TL FB,TL F,LTL,TL

Primary Service L,TL E,TL,LTL,P D,DB,F,TL D,HG,L,TC,TL LTL P E,L,LTL,TL L,LTL,TL F D,E,F,LTL,P,TL HG,L,TL LB D,F,L,LTL,TL L,TL

Straight Trucks 12 65 5 100 68 4 2 3288 31 33 3

218 10 10 0 106 113 16

Straight Trucks 126 15 1

370 4

3 233 2 35

Tractors

Trailers

Containers

Terminals

Web

289 353 600 175 178 193 128 250 3,774 222 250 1500 275 912 300 124 6629 230 350 250 412 280 94 325 355 290

962 350 3500 600 605 650 410 800 12,486 2065 736 3000 800 2365 850 374 21,791 820 700 508 1345 1120 225 690 1100 697

120 560

6 7 15 5 6 4 1 3

R,C V,R,C V V,R,C V,R,C V,R,C C V,R,C V,R,C V,R,C V,R,C V,C V,R,C V,R,C

198

12 14 13 6 44 26 2 215 6 7 1 21 2 12 2 5 8

Tractors

Trailers

Containers

Terminals

25 95 90 150 68 60 108 85 1 125 140 70 145 65 98 140 78 100 59 150 160 87 225 109 98

Straight Trucks

Tractors

3,288 1 126 0 0 0 798 2 2 0 827 1 2 0 0

3,774 31 25 53 95 385 77 74 87 70 81 29 35 108 136

157 302 230 200 311 240 210 250 3 150 300 185 286 196 239 350 – 275 169 280 250 300 225 198 135

Trailers 12,486 127 157 118 302 1,225 319 164 300 130 200 95 50 210 416

349 900

655 100 250

186 20

16 4 5 4 1 5 1 2 30 2 4 5 2 1 1 2 2 2 32 6 1 2 1 2 5

Containers

Terminals

349 0 0 0 0 0 0 0 13 0 0 0 0 0 0

1 16 3 4 23 54 6 2 1 45 1 1 1 2

V,R,C V,R V,C C V,R,C V V,R,C V V,R,C V,R

Web V V,R,C V V,R,C V,R V V V,R,C V,R V,R,C V,R V,R,C

Web

V V,R,C V,R,C V,C V,R,C V V

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Transforce – continued Company Name

Headquarters

Customer Line

Web Address

Operating Area

Hemphill (TransForce) Highland Transport (TransForce) Howard's Transport Services (TransForce) ICS Courier (TransForce) JC Germain (TransForce) Kingsway Transport (TransForce) Kingsway Bulk (TransForce) Kos Oilfield Transportation (TransForce) La Crete Transport Landry (TransForce) Legal Freight Services (TransForce) Mirabel Logistic (TransForce) Loomis Express (TransForce) Martrans (TransForce) McArthur Express (TransForce) McGill Air (TransForce) McMurray Serv-U Expediting (TransForce) Transport Nordique (TransForce) P&W Intermodal / MTMX Logistics (TransForce) Papineau International (TransForce) Rebel Transport (TransForce) St-Lambert (TransForce) TLS Trailer Leasing Services (TransForce) Trans4 Logistics (TransForce) TST Expedited Services/TST Air (TransForce) TST Overland Express (TransForce) TST Truckload Express (TransForce) Universal Contract Logistics (TransForce) UTL Transportation Services (TransForce) Westfreight Systems (TransForce) Winalta (TransForce)

Greenwood Village, CO Markham, ON Stony Plain, AB Mississauga, ON Trois-Rivieres, QC Toronto, ON Pintendre, QC Drayton Valley, AB Lacrete, AB Rimouski, QC Edmonton, AB Anjou, QC Brampton, ON Montreal, QC Cambridge, ON Montreal, QC Fort McMurray, AB Saint-Jerome, QC Oakville, ON Saint-Jerome, QC Edmonton, AB Saint-Romuald, QC Montreal, QC Mississauga, ON Windsor, ON Mississauga, ON Mississauga, ON Edmonton, AB Edmonton, AB Calgary, AB Edmonton, AB

877-797-7666 800-268-1729 780-968-8555 888-427-8729 819-370-3422 800-856-5559 800-263-3642 780-542-6773 780-928-3989 800-929-9285 780-452-7221 514-353-8186 855-256-6647 514-595-4444 800-668-9691 514-856-7567 780-791-3530 800-363-3666 905-815-9412 800-363-3666 780-464-5171 888-338-3381 866-351-7575 905-212-9001 888-486-8911 888-878-9229 905-602-7323 780-637-8749 800-663-8477 403-279-8388 780-447-3521

www.hemphillspeedy.com www.highlandtransport.com www.cfmvmt.com www.ics-canada.net www.transforcecompany.com www.kingswaytransport.com www.transforcecompany.com www.kosoilfield.com www.latrans.com www.transforcecompany.com www.legalfreight.com www.transforcecompany.com www.loomis-express.com www.transforcecompany.com www.mcarthurexpress.com www.mcgillair.com www.mcmurrayservu.com www.transforcecompany.com www.mtmx.ca www.transforcecompany.com www.rebeltransport.ca www.transforcecompany.com www.tlsleasing.com www.trans4.com www.tst911.com www.tstoverland.com www.earnwithtst.com www.cfmvmt.com www.utltransportation.com www.westfreight.com www.winaltatransport.com

North America Multi-Regional, North America Multi-Regional Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America Multi-Regional Multi-Regional Multi-Regional Multi-Regional Multi-Regional Multi-Regional Multi-Regional Multi-Regional, North America Multi-Regional, North America Multi-Regional Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America North America Multi-Regional North America International Multi-Regional, North America, International Multi-Regional, North America, International Multi-Regional North America Multi-Regional, North America Multi-Regional

D,F D,E TL P D,D I,LT DB TL LTL F,L D,F D,T P I,TC D,E E,F D,E D,L F,I D,H TL F,L (Eq D,I D,E D,D D,E D,F F,T F,L F,L

Contrans owned companies Company Name

Headquarters

Customer Line

Web Address

Operating Area

Contrans Group Inc.

Woodstock, ON Truro, NS Oakville, ON London, ON Perth, ON Woodstock, ON Hagersville, ON Woodstock, ON Guelph, ON Saint-Barthelemy, QC Edmonton, AB Rocky View, AB Oakville, ON

800-819-5259 800-565-7554 877-388-2888 800-265-0934 x 234 800-450-9483 888-209-3867 800-263-8383 800-465-8265 800-263-8267 450.885.3911 780-444-8805 800-661-9191 800-387-7210

www.contrans.ca www.brookville.ca www.cornerstonelogistics.com www.contrans.ca www.contrans.ca www.contrans.ca www.contransflatbedgroup.com www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca

North America North America North America North America North America North America North America North America North America North America Multi-Regional, North America North America

FB L TL DB TL FB DB TL TL TL FB LTL

Brookville Carriers Flatbed Limited Partnership (Contrans)

Cornerstone Logistics LP (Contrans) ECL Carriers LP (Contrans) Glen Tay Transportation LP (Contrans) Laidlaw Carriers Bulk LP (Contrans) Contrans Flatbed LP (Contrans) Laidlaw Carriers Tank LP (Contrans) Laidlaw Carriers Van LP (Contrans) S&S Enterprises Tri-Line Disposal Inc. (Contrans) Tri-Line Carriers LP (Contrans) Tripar Transportation LP (Contrans)

Day & Ross owned companies Company Name

Headquarters

Customer Line

Web Address

Operating Area

Day and Ross Transportation Group Sameday Worldwide (Day and Ross) Day and Ross (Day and Ross) Fastrax (Day and Ross) Day and Ross Dedicated Logistics (Day and Ross)

Hartland, NB Mississauga, ON Hartland, NB Florenceville, NB Brampton, ON

866-DAY-ROSS 905-676-3750 866-DAY-ROSS 506-392-2600 905-799-6500

www.dayrossgroup.com www.sameday.ca www.dayross.ca www.fastrax.ca www.dayross.ca/dedicated

North America/International North America North America North America

E,H LTL F,I, D,L

Operating Area

North America

E,I TL D,T

Calyx owned companies Company Name

Headquarters

Customer Line

Web Address

Calyx Group of Companies Calyx Ground Transportation Kreative Carriers (Calyx) Muir‘s Cartage (Calyx)

Concord, ON Concord, ON Vaughan, ON Concord, ON

905-695-3841 905-695-3841 905-695-3841 800-646-2013

www.calyxinc.com www.calyxinc.com www.kreativecarriers.com www.muirscartage.com

Multi-Regional, North America

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ational ational

Primary Service D,F D,E,I,L,TC,TL TL P D,DB,F,HG,LTL,TC,TL I,LTL DB,LB TL LTL,TL F,L,TL D,F,L,TL D,TL,VC P I,TC,TL D,E,TL,LTL,L,LB E,F,L,LTL,TC,TL D,E,F,LTL D,L,LB,TL F,I D,HG,L,LTL,TC,TL TL F,L (Equipment leasing) D,I,L,TL D,E D,DB,E,F,I,LTL,TC,TL D,E,L,LTL,TC,TL D,F,TL F,TL F,LTL,TL F,L

Primary Service FB,TL L TL DB,LB,TL TL FB,TL DB,LB,TL TL TL TL FB,TL LTL,TL

Primary Service E,HG,L,LTL,P,TC LTL,TC,TL F,I,TC,TL,VC D,L

Primary Service E,I,TC TL D,TL

Straight Trucks 63 4 1 370 0 19 0 4 0 0 0 0 891 1 20 4 0 0 0 0 0 0 152 0 0 0 0 0 0

Straight Trucks 37

32 4

Straight Trucks 955 233 557 1 164

Straight Trucks 14 6 0 8

Tractors

Trailers

Containers

Terminals

145 244 26 1 156 424 140 70 36 10 44 30 65 15 65 7 4 45 78 100 26 16 160 10 300 78 39 45 98 11

325 573 67 3 521 1,162 300 185 83 28 63 102 405 77 196 10 5 100 275 75 31 2,485 250 13 850 140 55 125 135 34

0 124 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6 186 20 0 0 0 0 0 0 0 0 0 0 0

8 4 1 30 2 13 4 5 4 2 2 72 1 1 1 1 2 2 2 1 2 26 2 1 1 5 1

Tractors

Trailers

Containers

Terminals

1,139 64

2,176 108

63 54 145 220 230 188 33

107 100 286 404 361 476 45

109 33

198 91

Tractors

Trailers

1198 59 702 235 202

3079 169 1937 373 600

Tractors

Trailers

Containers

227 9 7 211

1255 0 49 954

292 0

Web V,R V,R V,R V

V V,R,C V

V,R V V V,R V,R,C

Web

1 1 2 2 4 2 2 1 1 2 2

Containers 6 6

Terminals

Web

62 32 34 5 15

V,R,C V,R,C V,R,C V,R,C

Terminals

Web

8 1 3

V,R,C V,R,C

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MERGERS & ACQUISITIONS

buyer beware Acquisition activity is picking up steam in the turbulent post-recession climate. But what makes for a smart deal? By Harry Rudolfs

cquisitions in the Canadian trucking sector picked up momentum in 2011, led by transportation giant TransForce, which continued to collect companies under its umbrella. Some of the other big players (Mullen and Contrans) were also busy, each running three or four new flags up their masts. The heightened activity is the result of the emergence of a buyer’s market, with similar conditions as those experienced in 2006. Some established trucking businesses may have become over-leveraged. A few regional operators, struggling with chronically low volumes combined with rising fuel and operating costs, are finally throwing in the towel. Even some lean and gutted operations, having survived the last recession, have decided it’s time to exit the business. And, in some cases, these are family-run businesses, where the succession lineage may have run its course, and there are no kin willing or capable to take over the reins. In December, industry-watchers were shocked when MacKinnon Transport of Guelph, Ont. announced it was filing a Notice of Intent to restructure under Canada’s Bankruptcy and Insolvency Act, and selling its van operation to the Laidlaw division of Contrans. In an ironic twist of fate, the family-owned company’s economic woes may

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be in part the result of an acquisition-gone-wrong. Just two years earlier, MacKinnon had merged/acquired L.E. Walker Transport of St. Thomas, Ont. in a move that looked like a good fit. But the deal went sour a year later when L.E. Walker, which had been run separately from MacKinnon, had its loan called in. “I don’t know if there’s a better time or a poorer time to buy a company,” says Stan Dunford, chair and CEO of Contrans. “Obviously, the best time is when the price is the lowest. But what you need is a crystal ball to tell you how it will be doing in two or three years. Some of the (acquisitions) you work on for years trying to get all the pieces to fit, and others just drop in your lap.” While waiting for the court to decide on the legalities of the MacKinnon deal in early January, Contrans Group announced it was purchasing Wilburn Archer Trucking, a dry bulk operation in Norwood, Ont. This property seems closer in line with Contrans’ primary focus on speciality niches. “There are few opportunities to acquire dry bulk trucking businesses in Ontario,” says Dunford. “I like the speciality markets, anything with a high entry level, specialized equipment and specialized drivers – the more complicated the better.” For the most part, conditions have been favourable for those companies with solid financing in an acquisitive mood. According to Dan Goodwill of Dan Goodwill and Associates, “The big boys have been busy. But these are well-thought out deals. What they’re looking for is a sound business model, a strong management team that can produce consistent financial results, quality equipment,

and a team of drivers. Drivers are a key asset, but only one reason to buy a company.” Industry leader TransForce has landed several significant purchases to strengthen the depth of its core areas: courier, LTL, TL and speciality trucking. Already firmly established in domestic parcel service as the owner of Canpar, it recently added ATS Retail Solutions and ICS Courier. In 2011, it purchased DHL Canada (now operated as Loomis) giving it more domestic and international positioning, as well as US-owned Dynamex for $248 million, supplementing its presence south of the border. On the speciality side, the corporation has solidified its presence in Quebec and eastern Ontario by recently gaining control of 100% of LaFleche Environmental, of Moose Creek, Ont. On the LTL front, TransForce bolstered its presence by picking up Quik X Transportation, giving it a bigger footprint in Canada and more access in the US. “Buying Quik X is a big deal in itself,” says Goodwill. “TransForce now has some pretty big properties in several key sectors of the transportation industry.” From humble beginnings as Cabano Transport in Cabano, Que., and under the leadership of CEO Alain Bedard, TransForce’s credo of “growth through acquisitions” appears to be paying off. “All of these big trucking companies feel it when the economy gets tricky,” says Walter Spracklin, analyst for RBC Dominion Securities. “But you’ll see that the TransForce share price has held up fairly well (third quarter results show TFI’s revenues up 43% over the previous year, and that it paid off $50.7 million in debt during the quarter).

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TOP TIER

MERGERS & ACQUISITIONS

“The large players have done a good job at rationalizing their cost base, and haven’t added a lot of cost back into these new companies. They’re running fairly lean and a big company has the advantage and the discipline to walk away from business that’s not compensatory.” One wonders where Bedard is going to steer TransForce next? The answer appears to be south. Since 2010, TransForce has begun extending its tendrils into the US market. Besides buying Dynamex and Concord Transportation (a Canadian carrier with several US terminals), in 2011 it made a big step by moving into the US oil and gas business by acquiring I.E. Miller Services, of Eunice, La.; a move that gives it a strong position in the field independent of the Canadian oil patch. “One area that’s still open is the US,” says Goodwill. “This is an interesting one since the success rate of Canadian companies buying and running American companies has not been good.” Industry veterans might remember Maislin Transport which originally ran between Montreal and New York. The company expanded rapidly into the eastern US by purchasing Gateway and Quin Motor express in the 1970s, but it may have bitten off more than it could chew. Deregulation in the late ’70s and a recession that followed forced it to close its doors in 1982. Canadian companies are understandably nervous about setting up shop in the US. Not only truckers, but retailers like Canadian Tire have tried to crack the US market and had to pull back. “I know very few success stories; some of them are even horror stories,” proffers Dunford of Contrans. “It’s a different culture down there, a different tax system, a different way of doing business. There are plenty of opportunities in our own backyard.” But companies like Trimac and TransForce are not so shy about doing business stateside. Trimac runs its US operation parallel to its Canadian division, and has been looking southwards since 1980 when it bought its first US business. Even its latest acquisition, Benson Tank Lines, services customers in the northwestern US as well as B.C. and Alberta. One of the few Canadian companies to have made a major investment in the US market, specifically the LTL sector, is Vitran Corp., which has been continually nibbling a bigger space for itself on the American side, making 13 acquisitions since 1995. In 2010, it sold its TL rolling stock to concentrate on its LTL business. Although the corporation presently seems to be in consolidation mode, Vitran now services 34 states and just opened a terminal in Sacramento. According to president and CEO Rick Gaetz, it expects to open two more US terminals in 2012. Vitran continues to struggle with the US LTL operation, but 2011’s third quarter results show revenues are up nearly 20% across the board from 2010, and it reported some good results from its logistics sector. Greg Rumble, COO of Contrans, thinks this is a great time to be looking for acquisitions. “You get a chance to see what a company was able to do through the toughest economic times in 25 years. If a company has done reasonably well during the 2008-2010 period, I’m willing to pay for that...we’re prepared to 30

pay for companies that have done well through the recession,” he said in remarks before a panel at the OTA convention in Toronto in November. But at least one CEO takes a slightly differing position. According to Murray Mullen of Mullen Group, “To have a good transaction both the buyer and the seller have to come away with something. Right now, the valuations are low. You can buy companies cheaper right now, but the market doesn’t give you any credit for determining future earnings. All you’re doing is trading cash for future earnings, but I don’t know how to value earnings because right now the market is in such a state of flux. If you are going to buy an organization, you can look at the history, but that only gives you half the picture.” Mullen has carved a dominant and unique niche in the Alberta oil services and trucking sector. In a telephone interview, the CEO explained his outlook: “You have to know the sector you’re in well and not to stray too far from it. Sure, there are a lot of opportunities in the US, but I’m not smarter than the guys in the US. You’ve got to be good at what you do and know what that is.” Mullen estimates that his Group looks at about 100 potential acquisitions every year. “Of that, there may only be 10-15 that interest us, and from that number, we acquire three or four on average per year,” says Mullen. According to Groupe Robert president and CEO Claude Robert, buying a company just to get bigger is never a good idea. “You have to ask yourself, does this fit with my business plan, and will the company keep making money for me after I buy it? In many cases, these are one-man operations with the loyalty of three or four or maybe five main customers. What’s to stop them from going with another carrier after you buy the company? It doesn’t matter if you’re big or small. Making a bad acquisition means you’re just throwing your money away.” Robert also points out that difficulties can arise when trying to integrate the management and personnel of the new acquisition. “Management styles may be completely different. In my opinion, mergers are much more difficult to accomplish than acquisitions. There may be a problem blending the two cultures together. Every time you get bigger, you lose efficiency. You need a good organizational team to make it work, and good management is hard to find.” Sometimes buying up a competitor makes sense. It automatically increases market share and may allow the buyer opportunity to take some capacity out of the system. But RBC’s Spracklin thinks this can be a problematic manoeuvre. “If you’re buying a company in an effort to shrink capacity and increase pricing, you better get that company pretty cheap, because, in a sense, you’re paying for trucks you’re going to park,” he says. “In some cases, the economics work, but you’ve got to be big enough to have an overall effect. If you’re a tiny company, you’ll only produce a small ripple. Sure, it’s a buyer’s market right now, but the big question is, do you have a balance sheet that can afford it?” mt

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TOP TIER

big mac steps back

Inside MacKinnon Transport’s surprise restructuring By James Menzies

acKinnon Transport, a family-run company with a storied 80-year history, dropped a bombshell on the industry in mid-December, when it notified its drivers and creditors it was filing a Notice of Intent (NOI) under the Bankruptcy and Insolvency Act. The move buys the company time to restructure its finances and come to terms with its creditors. It does not necessarily precede a bankruptcy and many carriers have successfully filed an NOI and later emerged from creditor protection. As first reported by Trucknews.com, a message was sent to drivers via satellite on Dec. 13, informing them the company had filed an NOI and was proceeding with a restructuring. “Let me stress that this is not a bankruptcy of MacKinnon Transport,” Alex MacKinnon, senior vice-president of finance and administration wrote in the message. “We have a NOI to make a proposal which offers creditor protection strategy, that will provide the time and stability necessary to complete financial restructuring, which will make MacKinnon Transport a stronger industry competitor with a renewed financial outlook.”

“I remain confident that our goal of achieving the financial stability of MacKinnon Transport as a strong flatbed player in the North American trucking industry will be preserved.” - Evan MacKinnon, president and CEO, MacKinnon Transport The very next day, MacKinnon sent another message advising drivers that MacKinnon’s van division was being sold to Laidlaw Van LP, ensuring the continued employment of van division drivers and owner/operators. The announcement caught Greg Rumble, president and COO of Laidlaw’s parent company Contrans, by surprise when reached for comment by Motortruck. “It’s really very, very premature to make any comment at this point in time. We are going through a due diligence process and once that process is finished, we will be able to determine how we proceed,” Rumble told Motortruck on Dec. 14, noting formal discussions concerning an acquisition could not commence until the NOI was filed. When asked if Laidlaw was interested in taking on MacKinnon’s van division drivers, Rumble said, “If everything goes through, it’s definitely true. But there’s a process that’s going on. And it is indicated in the process that they intend to file an NOI. They haven’t filed it yet to my knowledge and if you haven’t filed it, you can’t complete a transaction under the Bankruptcy Act until that’s filed and the trustee in bankruptcy does his job… are we interested? Absolutely, yes we are. We are proceeding with our due diligence. Absolutely I would love to conclude this deal.” He then joked, “If an NOI has been filed, let me know.” Finally, on Jan. 16, the deal became official, with Contrans CEO 32

Stan Dunford announcing: “This is a real boost for the growth of our Laidlaw Van division. The combination of MacKinnon’s van business with our existing operations will provide a benefit to drivers and customers and will generate overall efficiencies. It has been a pleasure working with the MacKinnon team through their restructuring process and we are pleased to add this division to our group.” The deal covers about 80 drivers and O/Os. Evan MacKinnon, president and CEO of MacKinnon Transport, said the deal ensures 95% of the company’s staff would remain employed through the restructuring process. “Our objectives were to ensure the future existence of MacKinnon Transport, while preserving as many jobs of all those who work here as possible,” Evan MacKinnon said in a statement on Dec. 16. “Through our business deal with Laidlaw Van LP, we have jointly achieved preservation of 95% of the jobs of the MacKinnon employees and independent contractors – a huge success in these challenging times of excess unemployment.” He also said the carrier would be returning to its roots as a “premier flatbed carrier.” “I remain confident that our goal of achieving the financial stability of MacKinnon Transport as a strong flatbed player in the North American trucking industry will be preserved,” MacKinnon said. He blamed the company’s problems on a “perfect storm” of events brought on by “market conditions” and an “unsuccessful acquisition.” MacKinnon purchased L.E. Walker in the summer of 2009 and in December of that year placed it into creditor protection, from which it did not emerge. He stressed MacKinnon Transport will continue to operate and serve its customers as it goes through the restructuring process. MacKinnon’s problems caught many in the industry – including most of its drivers – off-guard. The company has always been considered one of Canada’s most successful flatdeck carriers, operating approximately 270 trucks. It has also won fleet safety awards from Volvo Trucks and the Truckload Carriers Association. MacKinnon has also been named a Best Fleet to Drive For under a program run by CarriersEdge and the Truckload Carriers Association. And MacKinnon has been named one of Canada’s 50 Best Managed Companies on numerous occasions. Contrans’ Rumble hinted at the Ontario Trucking Association (OTA) convention last November that Contrans would be looking for enticing opportunities. “It’s a great time to be looking for acquisitions,” Rumble said at the time. “You get a chance to see what a company was able to do through the toughest economic times in 25 years. If the company has done reasonably well in the 2008-2010 period, I’m willing to pay for that. We’ll pay a fair market value and allow the company to continue doing what it has been doing. We’re prepared to pay for companies that have done well through the recession.” When asked if those remarks would indicate that MacKinnon’s van division has weathered the storm in reasonably good health, Rumble retorted: “I wouldn’t assume that.” mt

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Shipper-Carrier Roundtable Part II

getting real on rates From the Sponsor

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the

Panellists MODERATOR LOU SMYRLIS, editorial director, BIG Transportation Media

MT: The Canadian General Freight Index has been showing modest increases in trucking rates over the past year. Our own research shows that shippers believe trucking – truckload in particular – will have the greatest degree of pricing power in 2012. In your view, what will drive truck transportation pricing in 2012? Maislin: At the end of the day, it comes down to costing out your product properly. We suffered in 2008 and 2009 across the board and that is where that discipline came from, so we know when we are pricing out a product, we are really looking at it intelligently. Granted, we have to keep our costs down and things like that, but when I think about what is really going to impact it, again, intelligent and disciplined pricing to make sure it goes where we can make a buck, and again find the way where it can work for the shipper as well. The other thing that we saw having an impact is the currency. MT: Brian, in addition to being president of Liberty Linehaul, you are also chairman of the Ontario Trucking Association. There have been a lot of comments about raising rates in order to continue to run profitable companies. What is your take on where rates are going for 2012? Taylor: Economists felt that, in the truckload sector, we were going to see 4-5% increases in truckload rates. I do not know whether we will get that across the board. We like to think that our pricing model has been pretty good to start with, so it will depend on what customer in what laneway for us; whether it’s outbound or inbound freight also has a big impact. The trend on the carrier side is towards higher costs. Not only are new trucks over the last three years up $20,000 after exhaust treatment and everything else, but also the cost of maintaining those trucks is up a lot. It is up, likely, 30%. There is a lot of maintenance required for that new technology and it is not very dependable. Actually, the worst trucks we have are our newest trucks. We are buying topof-the-line trucks, but I actually have drivers that want their old truck back. The other big thing is drivers. Every company that I talk to is looking for drivers. We do not need a lot of drivers, but we need to find good drivers. There are drivers out there, but not necessarily the ones we would want to hire.

JACK BRADLEY, director of purchasing and logistics, Armtec

DAN GOODWILL, president, Dan Goodwill and Associates

HEATHER FELBEL, vice-president, supply chain, Indigo Books and Music

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Shipper-Carrier Roundtable Part II MT: I remember a conversation I had with you, Doug, on this very same subject several years ago. Your comment back then still stands out in my mind; you said it is better to introduce a small increase every year then to go with the market and try to go for a big increase when capacity is tight. What are your thoughts about 2012 and how you would like to see your rate policies progress? Munro: We would like to try to modestly increase prices where we can. Our costs are going up and that means rates ultimately have to go up to reflect that. Over the last couple of years, we have held our rates, in most cases, and have not increased them, so there is cost pressure. With that said, customers are not getting increases from their customers so the only way, I think, you can really get increases is to demonstrate that you are as efficient as you can be as a carrier, and then ask for modest increases that will keep pace with it. MT: As a shipper, when a carrier comes to you asking for a rate increase, what do you expect them to address in that discussion? Bradley: Quite obviously, we like to know what the parameters of the increase are or would be. One of the big components of cost is a fuel surcharge. If you have cost of equipment, labour increases and insurance increases, they get muted by that fuel surcharge. Get it up to a standard that is current. We try to do that with our carriers. Then we can start to look at those other cost indices. We also look at things that are driving our costs. Is it on our side? Is part of the reason that our costs are higher because we are holding up the driver or equipment? We will do a covenant to reduce our exposure in those areas where possible. We would like to get costs improvements from our own customers as well. Playing both sides of DOUG HARRISON, president, Day and Ross General Freight

it and understanding is very key, but you have to be sensitive and give a good reason for those increases. MT: Heather, when a carrier comes in askDECISIONS 2012 ing for a rate increase, what do you need to be hearing from them for you to say, “I can agree with that”? Felbel: That thought has been put into it. That is the one sentence answer. That it has been well thought through, that the rationale behind it is strong, and that it is related to my business costing them more money. I always equate it back to them that they are all consumers and are going into a book store, and tell me the last time that they said, “Can I pay 5% more”? In fact, consumers are going into the store and demanding the opposite. I generally do not accept increases. I will come back and challenge them to tell me what we can do as partners to reduce costs, and if we cannot do things, then potentially we will entertain an increase. There would have to be lots of solutions and discussions before I would ever accept one. MT: Dan, in your consulting practice, you deal with both shippers and carriers. In your view, what attitude do both sides need to bring to the table to negotiate a rate increase that is fair to both sides? Goodwill: As a consulting company, the number one thing, from a shipper point of view, that we get asked is, “What can you do to help us with freight costs?” There are a couple of scenarios here that I will share. First of all, we have heard that there is a lot of pressure for rates to go up. Equipment costs are going up and driver wages are going to go up, so there is a lot of upward pressure and there is very little that one can do to stop that. Putting on my carrier hat

JONATHAN (J.J.) MAISLIN, president, Maisliner

DOUG MUNRO, president, Maritime-Ontario

for a minute, it is necessary. If you want to have a good carrier then they have to make money. There is no use surrounding yourself with low-ball carriers that cannot do the job and are going to go out of business a few days later; that is not good business. Going back to the shipper point of view, do you employ best practices in transportation? Do you have the right packaging? Are you using the right modes? Should you be using intermodal for some freight where you are using truck? Why are you using so much expedited? Do you have the right loading process in place? Are you paying market rates? How do you know you are paying market rates? A lot of our clients say that they are paying market rates, but when we look at what they have done, each year they go out to the same four to five carriers and get them to update their rates, and they are not paying market rates; they are paying rates that are over market. If you are at a point where you think that you have best practices in transportation, now you have to elevate your game to have best practices in logistics. Are you doing all of the smart things that you can do to minimize your supply chain costs? That is what you need to do as a shipper. Carriers should make sure that they know their costs and what they need to do to make money. Have a strong value proposition and be able to differentiate yourself from the rest of the pack. That is what a shipper wants to hear – what you are going to do for them. Sometimes, some of our clients will pay more because the carrier is worth more and because they have proven they can do more. So it is not just a beating down of carriers all the time. From the carrier point of view, do a good job, prove you are better than the rest of the guys in the game and you will get a better rate. mt BRIAN TAYLOR, president, Liberty Linehaul

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GreentoGol

EquipmentWatch

Daimler adds Detroit axles to powertrain portfolio By Lou Smyrlis When Daimler Trucks North America (DTNA) launched the Detroit brand in October, it envisioned a brand that stood for more than its well-known engine offerings. On Jan. 11, at a special briefing for the business press, DTNA unveiled the first steps it has taken to expand the Detroit product to encompass additional powertrain components. DTNA announced Detroit axles are now available to order for Freightliner Trucks, Western Star, Thomas Built Bus and Freightliner Custom Chassis vehicles. It marks the first time that the former Detroit Diesel brand has offered axles. Produced at the same facility as Detroit’s engines, Detroit axles include a wide range of configuration options and compatibility with all braking systems offered by Daimler Trucks. “This will be a core product for Detroit; it will not be a side project,” emphasized David Hames, general manager of marketing and strategy for DTNA. Hames said this is the first step towards what he called a “vehicle integration” strategy. “‘Powered by Detroit’ will eventually mean the full powertrain,” Hames promised. The company is also looking at transmissions and alternative-fueled engines. Hames also took time to stress the difference between DTNA’s “vehicle integration” strategy and the “vertical integration” strategy many truck OEMs employ (and which some carriers and O/Os may not be particularly fond of, as it reduces choice). “Vertical integration is owning your supply chain for the sake of owning your supply chain. Vehicle integration is about coming up with solutions that give your customers a competitive advantage and allow us to differentiate ourselves in the marketplace,” Hames said. “The next big opportunity for Daimler is how to optimize

the powertrain by matching the final drive ratios to the efficiency characteristics of the engine. Doing that without a ‘captive’ engine is a challenge.” (DTNA will, however, continue to offer both Meritor and Dana axles for customers who wish to go with those brands on their trucks). Another reason DTNA wants to have control of its own axle supply is to ensure it does not become subject to supplier constraints down the road. As Mark Lampert, DTNA’s senior vice-president, of sales and marketing, acknowledged, the supply shortages that have plagued all OEMs have not gone away. Supplier ability to grow their operations remains problematic even though the North American economy is not rebounding as quickly as after past recessions. Here is more information on the new Detroit axles:

tonnes in carbon offsets and currently he’d get about $240.” That might notshould seem like a lot of cash The end result be better perforback considering the work and investment mance and less maintenance, according to involved, but,The if nothing it could give a Williamson. use of else, friction and thrust company bragging rights and maybe a bearings should also reduce chatter andmarenketing On theThe other hand, the financial hance tool. steerability. axles’ I-beam design or marketing bottom line maysteering not be laythe is coupled with an advanced most important aspect of the program, to out, resulting in a sharper wheel cut of up some. The value of fuel saved outweighs the to 55 degrees – enhancing manoeuvrabilvalue thetight credits andexperienced it always will,in Arcand ity inofthe turns more told the Sun, but the social value of contriburban applications. uting to a cleanersaid environment priceless. Williamson Detroit is isoffering 12 As for what a trucking company has to ratings, compared to seven for Meritor. do to comply, Stedeford says COAC pro“We have the ratings customers need to vides the expertise and does all the work. cover their applications,” he stressed. “We basically come in and do all the installation,” he says. “We do an awareness Single rear axles session, we put our modems (the trucks), Available with weight in ratings from we capture all the data and we reports 13,000-23,000 lbs, Detroit’s send proprietary to the rear company letprecision-machined them know where single axles to have they need to focus, which operators a gear sets, which Williamson said willneed boost little bit of help in a certain area.” efficiency and provide higher torque and Equipment is installed by COAC to ac-

Steer axles Available with ratings from 6,000-20,000 lbs – including a 12,500-lb rating – and featuring a weight-optimized I-beam, Detroit’s steer axles, designed specifically for DTNA vehicles, are up to 40 lbs lighter than competitors (13 lbs lighter on average), resulting in more payload capacity and greater productivity, according to DTNA. Brad Williamson, manager of engine and component marketing at DTNA, said the steer axles include several design advantages. One of these advantages is a needle-bearing

MERCANTILE MERGERS & ACQUISITIONS Mercantile Mergers & Acquisitions Corporation are a mid-market M&A brokerage firm. The company specializes in the purchase and sale of mid-market companies, including the Transportation industry. In addition, the company advises on business valuations, mezzanine, and equity financing, management buyouts, restructuring of debt, family business re-capitalization and workouts. Contact (in confidence): Mark Borkowski, President at: (416) 368-8466 ext. 232 or mark@mercantilema.com Mercantile Mergers & Acquisitions Corporation

Detroit’s new steer axle uses a weightoptimized I-beam design to provide the same strength and capacity ratings in a lighter package.

design, rather than using bushings, as a way to reduce wear and tighten tolerances. 22

EQUIP Jan2012.indd 35

motortruck JANUARY/FEBRUARY 2012

curately measure f Stedeford says hardware, though. gram,” he says. “S with all of the oper es they can make th the amount of fuel COAC’s Web tion of their equ non-hydraulic lifti excavator, is $4,0 the setup itself. T change for a veh COAC can help t “We actually says. “We come in gether, we sugge should put into th when to do it, we very much a win-w Truckers who f bon offsets attracti to surrender their themselves out of “If someone do carbon offsets wo you have to be in says. “So while t emissions) they ca it’s gone through agreed-upon me haven’t, they shou their customers t duced (their emiss It may end up b too long, anyway, Trade concept be something Steded pen (short of a cha ment, perhaps). It’s basically a c where the pollute rewarded for being cooperative alread bers across the pro

Other ways to g Different jurisdict ways to reduce em 35

12-01-27 10:10 AM

EquipmentWatch quieter operation. They are also designed with fewer parts and a larger differential for greater stability on the road and improved durability. “We have the right solution for every application,” said Williamson. “Detroit axles are engineered tough and built to withstand the harshest of conditions.”

Tandem rear axles Detroit did away with the pinion head bearing on its tandem rear axles in order to create more space for a larger and stronger differential. Combine that with a Topoid offset design that makes for a nearly zero-degree driveline angle between each axle and Williamson says you end up with a design that reduces vibration and increases durability.

Additional benefits of Detroit’s tandem axles include an oil deflector which ensures full lubrication of the power divider at very low speeds, eliminating the need for an expensive oil pump; an input seal located inside the bearing cage and separated from the threaded ring for improved sealing, reducing degradation and oil leaks; and a larger power divider for improved stability and reliability. Optional driver-controlled or automatic differential locks further enhance grip and traction. Detroit tandem axles are available from 34,000-46,000 lbs, including an intermediate track 40,000-lb alternative for switching between wide-based single and dual tires. As important as the new product designs may be, how they are supported in

the field is just as, or perhaps even more important, Williamson said. A study of more than 600 buyers recently conducted by DTNA found that when it comes to purchasing axles, the top factors driving the purchasing decision had to do with service and warranty. Detroit’s warranty on the axles is five years, 750,000 miles. Williamson emphasized Detroit can support its axles in the field through its more than 600 locations in the US and Canada. The Detroit Carrier Exchange Program enables dealers to exchange or upgrade axles on trucks post-build up to three times with no penalty to ensure fleets get the exact gearing they need. For more information, go to www.DetroitDiesel.com. mt

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DashBoard TransCore’s Canadian Freight Index steady in November, avoids typical seasonal decline

TransCore Canadian Spot Market Freight Index 2007-2011

TransCore’s Canadian Freight Index, which tracks the spot market, 2007 2008 2009 2010 2011 % % remained steady in November with no change from October levels. Change Change Y-O-Y M-O-M However, year-over-year load volumes increased a healthy 17%. Historically, November experiences a decrease in spot freight, but 30% -2% Jan 173 214 140 171 222 November 2011 was the second best November on record, with Feb 174 217 117 182 248 36% 12% levels just behind those reached in November 2005. However, equipment postings in November were up 5% from Mar 228 264 131 249 337 35% 36% October, the lowest levels for any November since 2005. Capacity Apr 212 296 142 261 300 15% -11% was 8% below recorded levels for November 2010. There was no change in the equipment-to-loads from volumes 280 316 164 283 307 8% 2% May reached in October. Jun 288 307 185 294 315 7% 3% TransCore’s Canadian-based Loadlink freight matching database constitutes the largest Canadian network of carriers, owner/ Jul 219 264 156 238 245 3% -22% operators, freight brokers and intermediaries and has been availAug 235 219 160 240 270 12% 10% able to Canadian subscribers since its inception in 1990. More than 13 million full loads, less-than-truckload (LTL) shipments and Sep 206 203 180 234 263 12% -3% trucks are posted to the Loadlink network annually. As a result of Oct 238 186 168 211 251 19% -5% this high volume, TransCore’s Canadian Freight Index is representative of the ups and downs in spot market freight movement and 0% Nov 227 143 157 215 252 17% provides a historical account of the domestic and cross-border spot Dec 214 139 168 225 market freight movement. The first five columns include monthly index values for years TransCore Canadian Spot Market Freight Index 2007-2011 2007 through 2011. The fourth column indicates the percentage change from 2010 to 2011. The last column indicates the percentage change from the previous month to the current month. For the sector – posted 54.0 in December, up from 53.3 in November, and purpose of establishing a baseline for the index, January 2002 signalled a solid improvement in Canadian manufacturing business (index value of 100) has been used. conditions. Index readings above 50.0 signal expansion from the previous month; readings below 50.0 indicate contraction. Freight costs rise slightly in October, CGFI indicates The RBC PMI found that Canadian manufacturing business condiResults published by the Canadian General Freight Index (CGFI) tions improved further in December. Firms generally commented on indicate that the cost of ground transportation for Canadian greater client demand. Concurrently, both new orders and output shippers in October increased slightly, by 0.11% from the previous increased strongly and at rates faster than registered in November. New month and 0.67% compared with October 2010. export orders also rose in December, ending a two-month period of However, the Base Rate Index, which excludes the impact of decline. Meanwhile, the rate of input price inflation eased further duraccessorial charges assessed by carriers, decreased by 0.40% from ing the latest survey period and was at the slowest pace in the 15-month September to October and was down 5.05% versus the prior year. series history. Offsetting the decrease in base rates were slight increases in the “The Canadian manufacturing sector has demonstrated its resilience average fuel surcharge assessed by carriers and other accessorial as the global economy faces some strong headwinds,” said Craig Wright, charges. During this period, the fuel surcharges assessed by carriers senior vice-president and chief economist at RBC. “After some tempoequated to 20.78% of base rates, up from 20.16% in September rary setbacks in 2011, Canada’s economy is set to grow by 2.5% in and 13.77 back in October 2010. 2012, provided that European policymakers contain the sovereign debt The CGFI is sponsored by Nulogx, a leading Transportation crisis in that region.” Management Solutions provider, and is used by shippers and carReflective of larger new order volumes, Canadian manufacturing riers to benchmark performance, develop business plans, and se- firms raised production in December. Output increased strongly, with cure competitive agreements. It was developed with the assistance the rate of growth the fastest since April. Stocks of finished goods were of Dr. Alan Saipe. The most recent results are available at the also depleted, while backlogs were reduced for the third month runCGFI Web site: www.cgfi.ca. ning. Lead times on inputs increased further during the latest survey period. Panellists suggested that vendors struggled with greater input Canadian Manufacturing Purchasing Managers’ Index demand. Although the latest lengthening of delivery times was solid, it finds output strengthens to 8-month high in December was nonetheless the weakest in the 15-month survey history Production and new orders both rose strongly in December, The RBC PMI is a monthly survey, conducted in association with according to the RBC Canadian Manufacturing Purchasing Markit, a global financial information services company, and the Managers Index. Purchasing Management Association of Canada (PMAC). It offers The headline RBC PMI – a composite indicator designed to a comprehensive and early indicator of trends in the Canadian provide a single-figure snapshot of the health of the manufacturing manufacturing sector. MT JANUARY/FEBRUARY 2012

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InsidetheNumbers

26%

% of current truck shipments shippers consider rail to be a viable alternative

26%

0% of shipments

Thatâ&#x20AC;&#x2122;s the percentage of Canadian shippers who believe that the level of competitive activity between the various transportation service providers is above normal levels, according to our Transportation Buying Trends Research. The majority, 49%, believe competition is at normal levels.

48% of shippers

1-10% of shipments

30%

11-20% of shipments

21-30% of shipments

More than 31% of shipments

11%

Historical view of % of shippers reporting higher rates and surcharges affected their modal selections 2011

Main reasons shippers cited for diverting freight from truck to rail in 2011

2010

Trying to service new markets 12%

2009

Responding to customer requests 20% Decreasing rail prices 13% Increasing truck prices 36%

44% 38% 40%

2008

50% 2007

44%

Poor truck service or coverage 9% Change in corporate policy to faster inventory frames 2% Other 25%

2006

39% 2005

34%

ARE HIGHER FREIGHT RATES CAUSING MODAL SHIFTS? With the economic recovery being both weak and volatile, are buyers of transportation services remaining focused on price? Over the past seven years, our Transportation Buying Trends Survey, conducted this year in concert with CITA, CITT and Cormark Securities, has been polling Canadian shippers to understand which factors make them willing to change modes. Our latest research shows that the number of shippers reporting that higher rates and surcharges have had an impact on their modal choices has increased to 44%, the highest level since the recession. The research focuses particularly on the truck-rail dynamic, where close to 60% of shippers indicated at least some of their freight could be moved from truck to rail and that when they do decide to make the switch, increasing truck prices is the main reason behind the move. Trucking prices were considerably depressed during the recession, and remain so, but our survey also showed that shippers expect trucking to be the mode with the greatest upward momentum in pricing for 2012. Motor carrier executives also show strong inclination to raise rates when they can.

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