Motortruck January/February 2013 by Annex Business Media

Motortruck

Fleet Executive B U S I N E S S

M A G A Z I N E

F O R

F L E E T

*NEW*

C A N A D A ’ S

JANUARY/FEBRUARY 2013

O W N E R S

RISKY BUSINESS: Rick Geller on common sense solutions to your safety concerns

Top Tier Our annual in-depth report on the capacity of the nation’s largest carriers finds an industry in the midst of great change

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January/February 2013

Volume 82, No. 1

COVER STORY 23 Top Tier

contents

Our annual look at the nation’s largest carriers and their strategies for continued growth. Plus: Consolidation is driving the trucking industry, with interest in 3PLs and specialized haulers heating up, but will the ‘big deal’ remain elusive?

Features 16 WOMEN WANTED Women may be the missing link to career vacancies in supply chain.

18 PRIME TIME From overnight success to Chapter 11 to another meteoric rise, what lessons does Prime Inc.’s tumultuous history hold for you?

20 NATURAL FIT How being an early LNG adopter helped dairy and food-grade hauler Vedder Transport pave the way into new markets.

38 RATE NEGOTIATIONS Can shippers and carriers resolve their differences and bring priorities into sync when it comes to the future of rate negotiations?

Departments 6 THE VIEW WITH LOU

What’s behind the increase in equipment downtime?

8 COMPETITION WATCH Muir’s becomes O/O-only operation after letting go of company drivers; TransForce buys shares, trucking firm; and more.

10 THE BOTTOM LINE The game of ‘fill the trailer’ is changing – and so should you.

12 RISKY BUSINESS *NEW*

h g n

A new column offering common sense, cost-effective (or just plain simple) solutions to help carriers turn safety into a profit centre.

14 TAKING CARE OF BUSINESS Just sold your business? Here’s a list of the first 10 things you need to do.

40 GEARED UP The International ProStar and Cummins ISX engine are back together again – is it still a match made in heaven?

45 DASHBOARD 3B2

ANTS 1E6

TransCore’s Canadian Freight Index remain’s steady in November; CGFI shows Canadian shippers facing rising trucking costs; and more.

46 INSIDE THE NUMBERS How optimistic are Canadian carriers about freight volumes in 2013? trucknews.com

January/February 2013 ❙ FLEET EXECUTIVE 3

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WHAT’S ON TRUCKNEWS.COM Brought to you by the editors of Truck News, Truck West and Fleet Executive

BLOGS

Contributing editor James Menzies gives a rundown of trucknews. com’s top news stories, blogs and videos in 2012.

You said it... “While I agree that change is inevitable, the problem is that bridges, loading areas, and street corners to and from, will likely not get reconfigured. The burden rests on the driver to iron out the complication by trial and error and that’s only if anyone’s listening. It shouldn’t rest on the driver to deal with the shortcomings of existing infrastructure until things get better while they put their CVOR and livelihood on the line. Even modern loading areas that I come across look like they could have been engineered by a descendant of Picasso. One need not look any further than some of the new service areas in Ontario. This unit was built behind a desk, not behind the wheel.” – ANGELO DIPLACIDO’S COMMENTS ON DAN GOODWILL’S BLOG, “WAL-MART’S 60 FOOT PROTOTYPE TRACTOR-TRAILER IS THE TALK OF THE TRANSPORTATION INDUSTRY.”

ATBS Canada CEO Ray Haight challenges fleet executives to stop living in the past, but, instead, keep learning, growing and looking toward the horizon.

Already fudging on your New Year’s resolutions? Palmer Marketing’s Lee Palmer offers his top 10 tips for effective goal setting.

Web TV:

Transportation Matters ONE-ON-ONE WITH GÖRAN NYBERG: Volvo Trucks North America president Göran Nyberg on his driving background, first impressions of the NAFTA market and his thoughts on Volvo’s dealer network. THE RFP DEBATE: Leading shippers and carriers discuss the usefulness of Requests For Proposals at the 2012 Surface Transportation Summit. BEST BLOOPERS OF 2012: Transportation Matters celebrates the end of 2012 with a collection of bloopers from its fifth season. NO PAIN NO GAIN: How the economic crunch has made for a better trucking industry.

SOCIAL MEDIA FIND US ON FACEBOOK facebook.com/trucknews

Fleet Executive editors are now on the radio! For a list of stations and on-air times go to truckerradio.com. 4 FLEET EXECUTIVE ❙ January/February 2013

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Motortruck

Fleet Executive

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

THE VIEW WITH LOU

JANUARY/FEBRUARY 2013

VOL. 82 NO. 1

EDITORIAL DIRECTOR

What’s up with downtime?

Lou Smyrlis (416) 510-6881 lou@TransportationMedia.ca

Declining engine reliability is a not-so-well kept secret that must be dealt with

Adam Ledlow (416) 510-6890 adam@TransportationMedia.ca

f football is a game of inches, trucking is a business of minutes. Every minute a truck spends in unproductive downtime costs dearly. Yet the latest truck technologies – engines in particular – are adding to the problem rather than alleviating it. And that declining equipment reliability, when coupled with inefficient dealer practices, is greatly adding to downtime. That’s the stark message trucking company owners delivered during a media event at Volvo’s new Nacarato truck dealership in La Vergne, Tenn., recently. Before I say anything else, I want to point out the trucking company owners did not single out any one brand of engine or any one truck manufacturer’s dealership network – it seems there is plenty of blame to go around. I also want to stress how refreshing it was to attend a media event which made time for real truck owners to freely discuss real world issues. I’ve seen media events hosted by equipment suppliers over the past 20 years evolve into increasingly elaborate spectacles as industry suppliers work hard to put their best foot forward. There’s nothing wrong with that. But as companies try to make their best impression and all new products get billed as “unique” and “leading edge,” and designed by “forward thinking” companies, the every-day challenges trucking professionals face can get glossed over by the slick marketing message. There was nothing slick about this message, however. There was just hard-edged reality. As Stan Pritchett, owner of Beacon Transport, a 133-truck Nashville-area fleet, complained, he is spending so much of his time dealing with engine maintenance issues that his truck downtime “has become tremendous.” “No longer can I say that because I buy new equipment, I’m not in the shop a lot. I’m looking to run new engines and I want my equipment to stay running,” he said. A pretty damning statement; and a pretty reasonable expectation.

MANAGING EDITOR

FEATURES EDITOR

Julia Kuzeljevich (416) 510-6880 julia@TransportationMedia.ca

Mike McFarlin from M&W Transportation, a 95-truck fleet out of Nashville and Kirk Rutherford, whose private fleet serves Bridgestone dealers, bear the same burden with downtime. But they say it’s being made worse when trying to get service at a dealer different from the one where you purchased your trucks. In Rutherford’s own words: “I can bet on 110% performance from the home dealer. But at other dealers, you get the attitude that you didn’t buy it here, so get in line.” As a result, if his trucks are within a few hundred miles from the home dealership he prefers to bring them there rather than deal with the closest dealership. Hardly an efficient way to run a trucking operation. McFarlin conceded that tools brought in by OEMs to better diagnose equipment are helpful, but questioned the value of a quick diagnosis if it then takes several days to get the part necessary to complete the repair. Another issue raised was flexibility – or rather the lack of it – when it comes to payment. For example, dealers may decide to not release a truck until payment for the repairs has been made. As the fleet owners stressed, no matter how much they may love their drivers, they don’t think it wise to give them a credit card with an unlimited spending limit to handle any emergency. Volvo executives and the owners of the Nacarato dealership acknowledged these industry concerns and answered with a variety of strategies, programs and tools they hope will address them, such as an emphasis on better remote diagnostics. You can read more about it in our Geared Up section on pg. 44. But there is no silver bullet to these issues. A commitment to uptime – from all equipment suppliers – is required and a comprehensive approach is best. The fleets that drive this industry deserve nothing less. FE Lou Smyrlis, MCILT, Editor • lou@transportationmedia.ca

CREATIVE DIRECTOR

Roy Gaiot rgaiot@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)

6 FLEET EXECUTIVE ❙ January/February 2013 Member/Canadian Business Press

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INITIALS

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COMPETITION WATCH

MUIR’S CARTAGE has let go of all its company drivers and will rely entirely on owner/operators going forward. The transition was necessitated by the “market forces experienced by the entire industry,” says Ted Brown, executive vicepresident with the company. On Jan. 3, 33 company drivers were released as part of the restructuring. The company will no longer employ company drivers. Brown told Fleet Executive the move was necessary in response to “significant changes specific to its major customer relationships that remain strong, but simply require a change in our overall infrastructure and how we deploy our fleet and drivers.” Some of these changes, Brown said, have been phased in over the past few years. As for the Jan. 3 announcement that it would no longer run company trucks, Brown said it “was a necessary component to fully meeting those demands going into 2013 and remaining a competitive provider of excellent service well beyond.” Prior to the Jan. 3 announcement, Muir’s operated three distinct driver groups: a city and highway owner/operator fleet; a scaleable 3P channel with agency partners; and a company driver fleet. “After Jan. 3, our model will consist of a mix of owner/operators and our agency strategy – the application of either depending upon our existing and new customer requirements,” he said. Customers, said Brown, stand to benefit from increased flexibility and efficiencies. “Asset utilization will determine which driver solution we will deploy and we’ll be better positioned to meet the cost challenges of our partners,” he said. Asked if owner/operators may be concerned that the restructuring is indicative of underlying problems at Muir’s, Brown said “Muir’s has carried out these changes in order to increase its ability to compete within the conditions of which we’re all aware. We’ve seen continued improvement here over 2011 and 2012 and anyone currently with us or considering joining us should be encouraged by our enhanced ability to succeed in the years to come.” TRANSFORCE has recently purchased shares of VITRAN CORP., to the tune of some 1.763 million shares, representing about 10.75% of the company’s issued and outstanding common shares. The purchases were made by TransForce subsidiary TFI Holdings between Dec. 17 and Jan. 24. The average price was $5.18 per share, representing a total value of about $9.1 million. TransForce said in a release it was buying the shares for “investment purposes.” TransForce has also purchased Stafford, Texas-based VELOCITY EXPRESS and its subsidiaries, which include 80 locations across the US and Western Canada, employing about 2,600 staff and independent contractors. Velocity provides 8 FLEET EXECUTIVE ❙ January/February 2013

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same-day regional delivery services. The acquisition is expected to add $160 million in revenue for TransForce and should conclude by the end of January, the company announced. SEAWAY EXPRESS has announced additions to both its truck fleet and real estate holdings, with plans for further investments later this year. The company has added four new trucks and eight heated trailers to its fleet with three additional trucks on order for delivery in the first quarter. Seaway has also purchased new electric forklifts for its warehouse systems, bringing its total investment to more than $500,000. Seaway Express has also installed a new dispatch system, designed to improve driver communication by sending pickup requests via text. The company also hired 10 new employees in 2012, including drivers and office staff. Seaway Express officials say the company has also “significantly expanded” its real estate holdings in Cornwall. The company now has more than 266,000 sq.ft. of commercial warehousing space in the Cornwall Business Park. CAVALIER has announced a new partnership with RIST TRANSPORT, which will combine the two carriers’ networks and provide two-day service between the northeastern US and markets in Ontario and Quebec. They also plan to offer expedited overnight lanes. The partnership also will include freight consolidation services and warehousing on both sides of the border. RIST has 11 terminals in the northeastern US, covering Pennsylvania, New York, New Jersey, Connecticut and Massachusetts. DAY & ROSS has announced a pair of appointments to its executive team. Larry Rodo will be taking up the position of president for Day & Ross Freight and Doug Harrison will be taking the role of chief operating officer for Day & Ross Transportation Group. Rodo will have total responsibility for the company’s LTL and TL division in his new role. Rodo joins Day & Ross from Brinks USA, where he served as president. Prior to this, he acted as president of Brinks Canada and has previously held senior executive roles with Nadiscorp, Schenker and Reimer Express Lines. Larry has an extensive background in transportation and logistics, and holds a B.A. from the University of Toronto along with his CITT certification. In his role as COO, Harrison will have responsibility for the company’s overall strategy, a number of its support groups and its four operating companies. He joined Day & Ross in 2011 as president of Day & Ross Freight. He has held various senior executive positions within the transportation and logistics industry, serves on a number of volunteer and company boards, and is an active speaker at numerous industry events. FE trucknews.com

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BOTTOM LINE

Turn the page on JANUARY SYNDROME The game of ‘fill the trailer’ is changing – and so should you By Mike McCarron

very January, I notice a significant surge in the number of suppliers who want to set up meetings. Seems like every Dale Carnegie comes back from the holidays raring to go, committed to working harder and being a better version of last year’s model. It’s the same reason the company fridge is chock-full of salads the first month of the year. I call it January Syndrome. So far this year, more sales reps have lost ground with me than gained it. Several months ago, my gig changed to the nonasset side of the business. You’d expect that even a rookie sales rep would have done his homework about that before hitting “send” to see how many temporary drivers I need. Yet the number of clueless sales “professionals” who reach out to me as though I’m still running trucks is staggering. These irritating calls made me appreciate how much B2B sales is changing and how slowly our industry is adapting. Here are some of the fundamental shifts I’m seeing in the game of “fill the trailer”:

Researching not prospecting Today, information about prospects comes from multiple sources. You can find timely, accurate background on virtually any company and its decision-makers, customers, competitors, and markets. Information like this used to take months or even years to pry out of people. Today, you can set up Google alerts to have news about your prospects pushed to you via e-mail or RSS. Have you checked out their LinkedIn and Facebook pages? Starting cold with open-ended, probing questions about your prospect’s business will kill your credibility along with any chance of ever getting a pound of freight. Do the research and develop a game plan long before you reach out. This is Sales 101 today.

You’re not needed anymore We’re dealing with more RFPs than ever now. One reason is that decision-makers are smarter and more informed. They generally know how to solve their own problems and don’t need assistance from their sales rep until it’s time to figure out what all that scribble on their whiteboard is going to cost them. If you’re not careful, your sales force will turn into nothing more than a flock of messenger pigeons dropping off smelly pricing all day.

They’ve heard it all before In contemporary sales, the old “Ben Franklin close” no longer flies. You can’t rely on a deft tongue, a slick brochure, 10 FLEET EXECUTIVE ❙ January/February 2013

and a canned presentation. In fact, selling today is about not selling. Customers want business partners who can add value and provide attributes they can’t get from a computer. Forget the song-and-dance routine and charts of pros and cons. Work on consistently demonstrating that you are honest, hardworking, and knowledgeable. The deals will evolve naturally and the rates will take care of themselves.

Not a one-man show

If you’re in sales, my guess is that you’ve never won an Employee of the Month mug. There’s tension between sales and operations that many chalk up to arrogance. To me, it stems from the reality that sales reps can “earn” three times the coin of everyone else. Today, it takes a collaborative effort to secure, manage, and grow business with customers. It’s a company-wide commitment that dwarfs any one person. Outdated compensation models that are overly focused on individuals and short-term goals are no longer effective and will only demotivate your team.

Lunches are cool

Twenty years ago, one of the easiest and most common ways to take a business relationship to a new level was a night on the town with all the fixings. Now, customers would rather have the grand you spent for the limo, dinner, and tickets taken off their monthly freight spend. Most don’t have the time to be out at night, and many will even frown at the invitation. Also, with more women responsible for buying transportation now, men are starting to figure out how complicated nighttime entertaining with the opposite gender can be (a fact that women in sales have dealt with for years). Try a business lunch instead. It’s a great way to spend an hour with a client, especially if you’re still getting to know each other. Just don’t order the salad. There’s still plenty of that in the fridge. FE

Mike McCarron was one of the founding “M”s in MSM Transportation before the company was purchased by the Wheels Group. Based in Toronto, he currently works for Wheels in mergers and acquisitions and can be reached at mmccarron@wheelsgroup.com. Follow Mike on Twitter @AceMcC.

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RISKY BUSINESS

A new column offering common sense, cost-effective (or just plain simple) solutions to help carriers turn safety into a profit centre.

IS TECHNOLOGY THE ANSWER TO REDUCING CRASHES? New in-vehicle technologies have the potential to increase as well as decrease crash and injury risk By Rick Geller

he technology revolution is well upon us. Almost daily, risk managers are bombarded with new technology-based products, services, and concepts targeting truck design, improved fuel efficiency, and overall system efficiency. While most technologies have some link to safety, increasingly, carriers are seeing safety-specific products such as collision-avoidance, braking and stability control, lane departure, blind spot monitoring, and active cruise control systems. It is not surprising in that crash costs have been estimated to be approximately 2% of Canada’s GDP by the Organization for Economic Cooperation and Development. Regardless of the purpose of these technologies, carriers need to seriously consider driver reactions and behaviours in the presence of these technologies before making a final decision. New in-vehicle technologies have the potential to increase as well as decrease crash and injury risk. In March of 2011, a Penticton, B.C. couple left home heading for a trade show in Las Vegas. Seven weeks later, the wife was found, near death, in their vehicle on a logging road in a remote area of northern Nevada. Fortunately, she survived. Her husband was not so lucky – searchers found his body about 18 months later. When found, the wife explained that they had been directed to this logging road by the GPS mapping device. Indeed, this road was the fastest route to their destination, however, the device did not account for the fact that these roads are not maintained in the winter. Devices with visual displays and audible alerts can distract the driver from the driving task. Whether it is watching for the next turn, checking a blind spot camera, or reacting to a following too closely alarm, each can be an unnecessary distraction. After all, what is the difference between being distracted by talking on a cell phone or text messaging and being distracted by a four-inch screen with blinking lights and audible alarms sounding? Arguably, the greatest risk lies in inducing the driver to have a false sense of security, bordering on believing they are invincible, thereby encouraging riskier behaviour. In his book, “Target Risk 2,” Professor Gerald Wilde of Queens University argues that improvements in safety cannot be achieved by safety technology alone, stating that the extent

12 FLEET EXECUTIVE ❙ January/February 2013

of risk-taking ultimately depends on the values that prevail. Wilde advocates that every individual has a “target risk” or a level of risk they are willing to accept in order to maximize the anticipated benefit from an activity. Think of it in terms of an inner thermostat (comfort level) within each of us. If there is too much perceived risk, we adjust our behaviour to reduce the amount of risk. If there is too little perceived risk, we adjust our behaviour by assuming more risk in another area. At the onset of ABS braking systems, the perception was that they would stop the vehicle faster. This led to increased speeds and shortened following distances as people sought to compensate for the perceived lack of risk now that they were protected by ABS systems. New safety technologies have the potential to simply shift risky behaviour around and not necessarily eliminate it. Unless we can address the individual’s “target” level of risk, we have a very limited chance of meaningful crash reduction. Carriers have the opportunity to become more proactive in their choice of technologies by creating an evaluation plan and asking some simple questions: Is this technology being used to compensate for a lack of skill and/or inappropriate behaviour? Alternatively, is this technology being used to provide information to the driver that will facilitate better decisions behind the wheel? From the outset, drivers must be made aware of the capabilities/limitations of systems, and need to learn how to use them and be afforded the opportunity to gain experience with them. Ultimately, though, effective crash reduction is going to rely on utilizing the information gained through technologies to address inappropriate behaviour and inappropriate levels of risk taking. Don’t expect that technology will do it on its own. FE Rick Geller, CRM has been providing innovative and cost-effective risk management solutions to the trucking industry for more than 30 years. He serves on the board of directors for the Canadian Trucking Human Resources Council, is the vice-chair of the Toronto Chapter of the Fleet Safety Council and vice-chair of the Fleet Safety Council Conference Committee, as well as an Executive Committee member for both the Ontario and Toronto Regional Truck Driving Championships. trucknews.com

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TAKING CARE OF BUSINESS

THE FIRST TEN THINGS YOU MUST DO AFTER YOU SELL YOUR BUSINESS By Mark Borkowski

recently spoke with Peter Churchill-Smith, managing director of Newport Private Wealth, one of Canada’s largest independent wealth managers. He has worked with entrepreneurs for the better part of his 30-year career as a wealth management professional and, along with his partners, decided to conduct a survey of entrepreneurs who had sold a business. The research objective was to better understand the challenges and needs of entrepreneurs through the entire sales cycle – pre-sale planning, closing the sale, the transition period, and the development of a new long-term plan for themselves and their investments. The survey, conducted for Newport Private Wealth by Capital C Communications, determined that for the majority of business owners, the sale of the business was an exhausting, allconsuming ordeal that left them with little time to think about their personal needs and new circumstances. Then there is the aftermath. If one is still running the business, one’s personal affairs often take a backseat to priorities such as staff and customer issues that have been deferred. To help, 10 practical suggestions were developed. They come from two credible sources: entrepreneurs that have already experienced a “sale,” and the research findings. The Ten Suggestions

1. TAKE A BREATH...A VERY LONG BREATH – The sale of a business often creates a “void” that will take time to replace. This transition period can take a year or more before you declare yourself “ready” for the next challenge. The management of your funds needs to reflect this new plan.

2. RECOGNIZE YOUR NEW REALITY – You are not any wealthier than you were prior to the sale. However, your balance sheet has changed dramatically. If you are working for the new owner, your wealth is no longer lodged at your place of work. It is at the bank! And it is not getting the same 24/7 attention that it received before the sale. 3. USE PROFESSIONAL CASH MANAGEMENT – The survey confirmed that a large proportion of business sellers park their funds in cash for three months to a year. For a large amount of money, you should have access to wholesale rates. Be like the majority of our surveyed sellers: deal with someone with direct access to the money market who can ensure you are receiving the rates you deserve.

4. DRAW UP A NEW BALANCE SHEET – There’s no better time than now for you to take stock. Your affairs are probably more 14 FLEET EXECUTIVE ❙ January/February 2013

complex than you would like. You need funds to live and you need to understand which funds are best accessed from a tax perspective.

5. GET ORGANIZED – Your money may be in several places such as a family trust, a holding company and several family accounts. Many business sellers tell us that they are overwhelmed with the paperwork and it is very difficult to “keep score.” You might want to consider hiring a part-time bookkeeper.

6. COMMUNICATE WITH KEY FAMILY MEMBERS – Many business sellers have emphasized the importance of communicating their new reality with key family members. So much has changed and misunderstandings can easily arise. 7. GET AN ESTIMATE OF THE TAXES OWING – You need to obtain an estimate of your tax liability. It may be due over several years and some may be deferred indefinitely. There are many strategies available, including insurance and philanthropy. Focusing on these issues may be the best way to increase your net worth in the short term. 8. DO AN AUDIT OF YOUR CURRENT ESTATE PLAN – It is very likely that your estate plan – including your will and insurance – do not match your new circumstances. Does your will include provisions dealing with shares of a private company now sold? Are your current executors capable of handling the complexity of your new affairs? In our view, these are “immediate concerns.”

APPOINT A CHARITY ‘GATEKEEPER’ – Yes, charities know you’ve sold and they will now be soliciting you for a large commitment. Many entrepreneurs find it helpful to have a gatekeeper who will handle these requests.

10. DEVELOP AN APPROACH FOR LOANS TO FAMILY – Sooner than you think, you may be asked for a loan by a family member or friend. They may think that the loan is trivial to you. Sadly, they may feel the same way about repayment. A simple solution? Buy yourself time by telling them that your money is tied up with your advisors. FE Mark Borkowski, is president of Mercantile Mergers & Acquisitions. Mercantile specialize in the sale of privately owned Canadian companies. He can be contacted at mark@mercantilema. com or www.mercantilemergersacquisitions.com trucknews.com

8071_PCSTCB Jan.indd 14

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11/28/12 11:43 AM

Nov 26, 2012

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lberta is going to need some 50,000 new workers in supply chain industries alone over the next 10 years. That’s a pile of people to place – and the need spans professions all across the supply chain spectrum including, of course, the trucking industry. The 50,000 figure came from a national and Alberta-based labour market study by the Calgary Logistics Council, and helped lead to the Council, Calgary’s Van Horne Institute and other partners creating a series of events focusing on women as a mostly untapped resource within the supply chain management sector. (The next part in the Women in Supply Chain series was a conference planned for Jan. 31 and Feb. 1, 2013.) The most recent incarnation of their outreach was a late November gathering called: Inspire! Women in Supply Chain Roundtable Reception. The second in a series of events on the topic, the evening saw a group of about 50 females gather at the Calgary Art Gallery to hear three women with successful careers outline their experiences and offer encouragement and insight for women who may be looking for such a career. “By putting together and offering the Women in Supply Chain initiative, we are working collectively to answer the current and forecasted supply chain worker shortages,” Calgary Logistics Council’s Linda Lucas told the audience at the affair. “We are driven by a desire to see that supply chain management becomes a profession of choice, not by default, and that we work to differentiate this sector through our connections and community.” As for that 50,000 figure, Lucas said, “This presents a huge issue for employers in terms of attraction and retention, but on the flipside, it represents great opportunities for those who choose this sector in making their career.” That doesn’t mean it’s easy breaking in – or sticking around – if you have a second X chromosome. According to presenter Siobhan Chinnery, vice-president, corporate supply chain, for Sanjel Corporation, “It’s especially challenging for women because they have other choices to make in their lives besides where to work.” Chinnery said that as a mother of two teenage girls, she has passed up opportunities because “being a mother is incredibly important to me.” One example she cited was a chance to travel with her company’s CEO, talking to shareholders. She said she turned it down because “it wasn’t about my schedule, it was about (the CEO’s) and if he was ready to go somewhere on Tuesday that’s when he went. It didn’t matter if it was my daughter’s birthday.” That said, however, “You have to be open to accept opportunities. Luck is only half of it. You have to be in a situation where opportunity presents itself. So work hard, work smart – but accept those opportunities,” she added. Opportunities coupled with hard work brought Audrey Mayr to her present posting as chief operating officer of the event planning company E=MC2. She had a varied background in the hospitality industry before E=MC2 came knocking, and since then has worked on such projects as the Toronto International Film Festival’s inaugural gala, which she de-

WOMEN WANTED Women may be the missing link to career vacancies in supply chain. How can we attract them to our industry? By Jim Bray

16 FLEET EXECUTIVE ❙ January/February 2013

Human Edge Jan.indd 16

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THE HUMAN EDGE scribed as “one of the most spectacular events seen in Toronto.” Closest to the trucking industry was third speaker Cindy Clark, dealer principal of Sterling Western Star Trucks in Calgary and Red Deer. She talked about the challenges of becoming what she described as the only woman in Canada doing what she does. Clark worked in accounting at the Calgary Motor Dealers Association early in her career and discovered that “the whole dealer industry, the whole dynamics of having an auto dealership in trucks and cars, was such an old boys’ network. Daughters were not even considered at that point.” Eventually, Clark decided to start her own business, having learned from her experiences that “if someone else had done something, I could do it too. That really was my driving force.” Mayr agreed with that sentiment. “It think it’s just confidence, in realizing that we are women and we have a lot of strength,” she said. “If someone else has done it, you can do it, too - probably better, with your own finesse. Set your sights and go out there and make your mark on the world. Everything’s possible.” The women agreed that one way of helping advance your career is to find a guardian angel. “Have sponsors in your career rather than just a mentor,” Chinnery said. “Mentors will help you, but sponsors will actually go to someone and recommend you. And they don’t need to be women; there’s lots of great men and women out there who can sponsor you and help your career. “Traditionally it’s always on the mentee to seek out the mentor. So do that. Seek out the person and ask him, but be prepared to tell him what you’re looking for, what you want to learn from that person.” Going for the brass ring is also important. “One thing I would really encourage you to do is let them know where you want to go with your career,” Chinnery said, noting that one of the biggest mistakes she made was when a supply chain position was posted at her job and she didn’t go after it. “I just assumed they’d come ask me because I was the best person for the role,” she said. “The posting just screamed my name, and then I didn’t get the job. And I was mad. You have to actually tell people that you want the job!” Tooting one’s own horn doesn’t hurt in other ways, either. “Women doubt themselves,” Chinnery said. “Women tend to not like to brag. You need to stand up and tell people what you’re good at and where you want to go in your career. If you sit back and wait for everyone to mastermind your career it’ll never happen. You have to set your course and figure out where you’re going.” And don’t be afraid to use your strengths. On that topic, Clark said she had learned that “standing pat and listening was my best skill. I learned never to take anything that the guys would tell me as the truth – not that they were trying to undermine me necessarily, but I became aware of the threat. Women don’t do what I’m doing. I’m the primary owner of the dealership and in North America there’s only a couple of women at this level and none in Canada.”

Women, Clark said, actually have an advantage over men in some ways. “One of the things that’s been really good about being a female in this industry is that (people) automatically disqualify me right away and that gives us as females the greatest opportunity to shine, because while they’re waiting around, we can take over.” On the other hand, women can be their own worst enemies. Chinnery and Clark both noted that women should be concerned about how they carry themselves in the work environment. “A lot of women don’t dress appropriately for the office,” Chinnery said. “Men have suits, and you don’t see them in all sorts of bizarre outfits. If you want to undermine your credibility in an office – which by the way is still run by men whether you like it or not – go in with your cleavage hanging out because that’s not going to do you any good. There’s no room for cleavage or short skirts, in an office.” “Women dress down, thinking that’s what clients want,” Clark added, “instead of dressing up to who they want to be. As soon as you think nobody’s going to care, then you don’t care about yourself. And yes, people judge you, but it’s you that you’re taking care of, that you’re measuring.”

What are practices that other sectors use to develop talent – part of that talent being women?

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Despite the obvious focus on the distaff side of humanity – and the lack of males at the event who weren’t actually working there in one way or another – host Linda Lucas was quick to point out that the issue of putting new bums into empty supply chain seats isn’t just a female thing. “This is an issue of talent, an issue of the things that make our economy work,” she said, “and we are collectively determined to bring supply chain into the fore, to reinforce the work done every day as part of a huge, huge network of extremely capable individuals.” “We’re going to carry on this conversation and bring people into our meeting who will help us advance our own thinking about the supply chain,” Lucas said. “What are the values behind it? How is it changing? Who are the people in the world that we need to influence above us and around us, to have understand the importance of the work that people in the supply chain do? What are practices that other sectors use to develop talent – part of that talent being women?” Lucas said the plan so far is that, at the end of the two days, participants will be invited to help shape the last two segments of the Women In Supply Chain program. “It’s kind of like writing your own end to a story,” she said. “We’re looking for input from you, from the community, to tell us the things that you think are the most important. And we will build the last two events in March and May of 2013 around the input we get. Maybe we’ll take one of these issues and dig more deeply into it.” FE January/February 2013 ❙ FLEET EXECUTIVE 17

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PROFITABILITY

Prime Inc. CEO Robert Low speaking with Lou Smyrlis

PRIME TIME

From overnight success to Chapter 11 to another meteoric rise, Prime Inc. has travelled a rocky road to prosperity. What lessons does its tumultuous history hold for you? By James Menzies

rom the highest highs to the lowest lows and then back again, the eventful history of Prime Inc. is probably best told by its founder and CEO Robert Low. With his quick wit and self-deprecating sense of humour, Low had the audience at the most recent Driving for Profit seminar hanging by his every word as he recounted the tumultuous early years in Prime’s colourful history. Low was interviewed by editorial director Lou Smyrlis as part of the seminar’s popular How We Did It series. Today, Springfield, Mo.-based Prime Inc. runs more than 5,000 tractors and some 7,000 trailers as a leader in the refrigerated and flatdeck freight transportation segments. The fact it exists at all is remarkable, given the turmoil the company faced in its formative years. Low grew up on a Missouri farm raising cattle, hogs and chickens. His father was a market news reporter and many of Low’s friends were in the meat business. Low’s first rig was a previously owned dump truck he bought while in college and then drove during the summer. He hired a driver for it when he went back to school. “That went south in a hurry,” he recalled of the experience with his very first company driver. Meanwhile, post-secondary education was proving to be a grind and Low’s engineering aspirations were cast in doubt. Low traded in his dump truck for a highway tractor and began calling on his contacts in the meat business looking for stuff to haul. As a one-truck operation, Low, like many others at that time, ran hard and fast with little regard for the law. “At that time, with paper logs and fuel that was 18 cents a gallon, what you did was mashed on it and drove as fast as you could and got all the miles that you could,” Low admitted. “If you ever got home, you sat down with two pots of coffee and a logbook, filled everything out and made it all fit.” Low founded Prime Inc. and began adding trucks. In 1979, Low’s company made a million dollars in profit – all this before he turned 30. “I was 29 years old and thought the world looked level and in 1980, I was in bankruptcy court just buried with no hope,” he

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said. Low’s mistake was borrowing money in a rapid growth inflationary environment and “paying it back with cheaper dollars.” It worked for a while, until interest rates surged to 21% and the loans came due. It was a difficult lesson. “I had it coming,” Low now admits. “I was pretty arrogant. I was young and thought this was easy. I had lost track of the things that were really important, like people and how they’re tied to the company’s success. I lost track of some really important things and I got my comeuppance real quick.” The next few months were a constant struggle to stay afloat, every day a fight for survival. Low admitted luck played a major role in the company’s ability to stay in business. At one point, Low’s car was repossessed and he faced the prospect of – as the owner of a trucking company – being without a vehicle. But then almost immediately thereafter, Low won a new Cadillac in a Shriner’s draw. Another time, a cheque that was intended “to be shared” with his insurance company arrived in the mail. Out of money, Low said he cashed the cheque and only then was able to keep the lights on for another day. Things got real personal, however, when Low’s own mother took a loan out on her house and contributed $50,000 to the company. “We were burning off $17,000 per day, it wasn’t going to get us through the next week,” Low recalled. “We couldn’t talk her out of it. She was all-in, 100% all-in. It was just that close. I paid my mother back the $50,000. It took a while, but I did pay her back. Things like that got us by.” Drivers, too, understood the pressure the company was under and many continued to drive, fully aware their next paycheque may not come in on schedule. The most important lesson learned through the ordeal was a return to basics, or what Low referred to as “candy store accounting,” where you can buy only what you have enough money in your pocket to afford. “You can’t borrow or lend anymore,” Low said of the company’s time under Chapter 11 bankruptcy protection. “There is supervision by the court and creditors and you have to have as much money coming in today as you spend or it’s over, that’s trucknews.com

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the end. It was the best thing in the world for me. What you exceptions, is on some type of incentive-based compensation.” Today, Prime Inc. is known for its driver amenities and focus worried about was strictly cash flow. You had to manage to on health and wellness. have enough cash to get through the next day.” The company has built a Millenium Building, complete with Another lesson learned was that “overexpansion without proper footing and solid financial foundation is a disaster,” showers, dorm-style rooms for sleeping, a day care, spa, gym Low revealed. This is a trap that remains today, particularly for and access to health care professionals. FE publicly-trade companies that are accountable to shareholders who tout growth, even at the expense of profitability. Low warned that growing the top line while neglecting the bottom line is rewarded by the markets, and as such, many carriers feel they “have to have growth, even at the risk of their longterm viability.” One of the keys to Prime Inc.’s recovery was an increased reliance on owner/ operators. Prime Inc. developed a program to create new owner/operators from within its driver ranks. Some of the programs had to withstand legal challenges from OOIDA and others, who questioned the operators’ independent status. Low said that today, one of the things he’s most proud of accomplishing is “developing a legal, ethical and fair independent contractor program for those who could not afford a down payAnd is Proud to Sponsor ment on their truck.” In short order, the program spawned the creation of more than 100 new owner/operators and marked the beginning of Prime’s resurrection. The newly crowned owner/operators were earning more than they were as company drivers and at the same time, their units were more profitable for Prime Inc. than its www.drivingforprofi t.com www.truckingforwishes.com own company trucks. expert information in an helping dreams come true for children “Everybody was converting and wantaffordable fashion with life threatening illnesses ed to become an owner/operator,” Low recalled. “It was a very powerful business model. I believe in alignment. It worked well with our drivers and our Disability • Downtime • Buydown sales guys. At the darkest times when we couldn’t hire people, we could say ‘Look, if you can bring some business here, if you can drive down costs, we’ll measure that and you’ll be in for a fraction of the action, so to speak, a percentage of the NAL Downtime Lounges savings or improved revenue.’ We’ve HWY 401: Woodstock, TA Truck Stop, Exit 230 seen it work with our drivers, it works Cornwall, Fifth Wheel Truck Stop, Exit 792 great with managers and now virtually everyone in our company, with very few

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GREEN to GOLD

A NATURAL FIT…SORT OF

How being an early LNG adopter helped dairy and food-grade hauler Vedder Transport pave the way into new markets By James Menzies

eing an early adopter of liquefied natural gas (LNG)-powered trucks has landed Vedder Transportation Group some new business opportunities, including the formation of a solid waste division, which seems an unlikely fit for a company whose core business has been hauling dairy and food-grade products. Fred Zweep, president of Vedder Transportation, said the opportunity came along in August 2010, when word was beginning to spread about the company’s investment in natural gas trucks. He vividly remembers the phone call he received while travelling to Calgary to visit a client. The caller said he’d heard Vedder was investing in natural gas trucks and asked if they’d be able to service a solid waste haul contract shuttling trash from Metro Vancouver to a landfill in Cache Creek, B.C. “People often ask how did we get into the business of hauling garbage when we’re a food-grade hauler,” Zweep recalled. “That was because of the natural gas technology. I remember when they phoned. I said ‘We haul food, you want me to haul garbage?’ He said ‘Will you think about it?’ and I said ‘I’ll have to think about it’.” Today, Vedder has 15 LNG-fuelled Peterbilt 386s dedicated to the trash contract, hauling solid waste between Vancouver and Cache Creek, grossing a whopping 140,000 lbs each way along the 410-mile round-trip. “Where we’re travelling with the solid waste is in a very sensitive airshed,” Zweep said. “This equipment produces 2733% less greenhouse gases (than diesel-powered trucks).” The route between Vancouver and Cache Creek was also a good test for the LNG trucks. “I would have to say, 200 of those miles are probably some of the toughest pulling in the province of B.C. that you’d find,

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maybe anywhere in North America, with 6-8% grades over about 50% of that round-trip,” Zweep said. Vedder Transport deployed the latest of its 50 LNG-powered Peterbilt trucks in March 2012, and has now collected enough data to declare the program as a resounding success. The trucks are operated across three divisions: 22 in the dairy fleet (140,000lb GVW); 15 in the solid waste fleet (140,000-lb GVW); and 13 in the food-grade fleet (105,000-lb GVW). The highest-mileage units now have about 250,000 kilometres on them. “From a mechanical perspective, we’re seeing very good results,” Zweep said. “We’re now starting to pull oil samples and we’re seeing the cleanest oil samples we’ve ever seen in our fleet, and we’ve been around for over 50 years.” Last month marked a milestone for Vedder Transportation, as its fuelling station – offering LNG, CNG and diesel exhaust fluid (DEF) – opened for business in mid-December. Up till then, Vedder had been fuelling its trucks via a temporary filling station. The new fuelling site has been opened as a commercial cardlock, available to other fleets operating natural gas-powered vehicles. Zweep said he watched 11 of Vedder’s LNG trucks fill up at the new fuelling station during a half-hour interview with Fleet Executive. “We’re fuelling 77 times a day on average,” he said. Vedder’s investment in natural gas trucks has been an unmitigated success, according to Zweep. Not only did it launch a new solid waste division, but Zweep said the carrier is in discussions with two additional companies to operate natural gas trucks for them within their own fleets. The trucks have been up to the task, with no widespread reliability issues. Any mechanical issues the trucks have experienced have not been related to the natural gas components. “It’s definitely a technology that works,” Zweep said. “There’s no question, we’re seeing the durability out of the trucknews.com

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technology. Was there reason to be skeptical at first? No question. Were we nervous? Absolutely. But we also recognized from an economical perspective that we needed to satisfy our requirement of managing our fuel costs, so that’s why we took a good long look at the technology.” Vedder Transportation extensively researched natural gas trucking before taking the plunge, and Zweep said there have been no surprises. “We took a lot of time to plan,” Zweep said. “We were in the discovery and planning stage for about 18 months. We visited a number of locations, so we’ve seen the good, the bad and the ugly of what was really going on in the market.” Zweep wouldn’t disclose specific fuel savings, but he said they were right in line with expectations, as were maintenance costs. Upgrading the shop to accommodate LNG vehicles required an investment of $80,000-$120,000. “The enhancements to the shop aren’t about the tools to work on the equipment,” he noted. “It’s about the safety protection for the people who are functioning in the shop. You have to install methane detectors, automatic door openers and exhaust fans to be able to ventilate the building in the event methane is detected.” Currently, Vedder’s 50 LNG tractors are consuming nearly 500,000 diesel equivalent litres of natural gas per month. Vedder has employed dedicated fuellers to ensure the trucks are receiving consistent fills. Each of the initial 50 trucks are in return-to-base duty cycles, returning to the yard every 10-12 hours. Now, Vedder is looking to transition its long-haul flatdeck fleet to natural gas. “We run a fleet of 100 vehicles every day between the Lower Mainland of B.C. and northern Alberta servicing the oil and gas industry with materials coming off the docks in Vancouver,” Zweep said. “The average length of haul one way will be 875 miles with a 105,000-lb GVW.” Zweep said he’s already been in discussions with Peterbilt to spec’ a natural gas truck for the long-haul fleet. FE

FIRST BISON TRANSPORT LNG TRACTOR HITS THE ROAD IN CALGARY

he first of 15 Bison Transport LNG (Liquefied Natural Gas) tractors rolled out of its Calgary terminal a few days before Christmas, a development the company believes marks “a turning point in creating awareness of LNG as a sustainable and abundant alternative fuel source.” Bison Transport has signed an agreement with Shell Canada to run the 15 LNG tractors in Alberta. Bison’s five-year fuels supply agreement marks the first step in launching Shell’s LNG refueling infrastructure in the province. Under the terms of the agreement, Bison will use Shell Flying J refuelling facilities in Calgary, Edmonton and Red Deer which are scheduled to open in early 2013. This agreement is the first of its kind in Canada and will bring LNG to public access fuelling facilities; it also highlights LNG as a transport fuel option. Under specific conditions, the use of LNG in heavy-duty applications has the potential to deliver a 20% reduction in greenhouse gas emissions. Shell believes its LNG refueling infrastructure will support an increasing number of commercial fleets with LNG fuel options. The company is constructing a natural gas liquefaction plant at its Jumping Pound facility, west of Calgary, to supply this growing market. “LNG can be a cost-effective fuel from an abundant resource of natural gas, and we believe it can help our customers build competitive advantage,” says Lorraine Mitchelmore, Shell Canada Country Chair. “The opportunity to work with one of Canada’s leading fleets marks an exciting milestone for Shell.” The entire LNG heavy-duty fleet was expected to be operational by the end January. FE

MERCANTILE MERGERS & ACQUISITIONS C

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

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January/February 2013 ❙ FLEET EXECUTIVE 21

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T O P T I E R

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P R

Our annual in-depth report on the capacity of the nation’s largest carriers finds an industry in the midst of great change ur eighth annual Top Tier report offering a comprehensive look at the capacity of the nation’s largest for-hire carriers, finds an industry in the midst of what could prove to be monumental change. When I pore over the numbers from our Top Tier and other research, it’s hard to come to any other conclusion. As the Ontario Trucking Association noted recently, capacity remains “frozen” as carriers continue to be disciplined in adding both equipment and drivers in the absence of the proper economic conditions to support growth. Class 8 sales in 2012 (with one month left to report as of press time) were running above the five-year average and will make 2012 the third-best sales year on record. But this does not indicate a return to the free-spending days of the previous industry growth period from 2003 to 2008. The strong performance in Class 8 sales experienced in 2012 is best attributed to pentup demand to renew aging vehicles rather than a willingness among fleet executives to once again grow their fleets.

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2013 TOP 100 MTR.indd 25

More importantly, our research shows a great divide in the future outlook amongst Canada’s largest carriers and the rest of the industry. When we examine exactly which carriers have plans to purchase new Class 8 trucks in 2013, the differences are startling. Two-thirds of large carriers (those with 100 or more Class 8 trucks in their fleet) have new truck investment plans for this year, according to our just-completed annual Transportation Buying Trends survey of Canadian trucking executives. In comparison, only 17% of small fleets (carriers with five to nine vehicles) have such purchasing plans. Large carriers are far more optimistic about their business prospects, with their optimism averaging out at 6.6 on a scale of 1 to 10. Small carrier optimism averages out at just 5.6. And there are key reasons behind the muted optimism small carriers have for the future. While 38% of large carriers and 42% of medium-sized carriers (fleet sizes 10-99 trucks) expect higher freight volumes in 2013, only 27% of small carriers expect more business. The same trend is reflected south of the border in research conducted by the American Trucking Associations, which found that while large carriers increased their volumes 0.5% over the past year, small carriers are still suffering through a 4.6% decline. Perhaps most telling, however, is what the different sized fleets expect to get for their business volumes. Three-quarters of the large carriers responding to our survey expect to raise rates this year, compared to just 39% of small fleets. No wonder small fleets are so unenthusiastic about adding to their capacity. Small fleets currently make up three-quarters of the Canadian for-hire market. When you consider their present difficulties in combination with large-carriers’ often-stated desire to consolidate the market, it’s clear we may be in for great change in the years to come. 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 Canada, 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 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 14-15 at the Mississauga Convention Centre as well as our own Surface Transportation Summit, scheduled for Oct. 16 also at the Mississauga Convention Centre. FE January/February 2013 ❙ FLEET EXECUTIVE 25

13-02-01 3:22 PM

The Top 100

Company Name 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 Ground Transportation Solutions (National Fast Freight, Totalline) Calyx Transportation Group Canada Cartage System Canadian Freightways (TransForce) Canadian National Transportation Ltd. Canpar Transport (TransForce) Caron Transportation Systems CAT Inc. Celadon Canada Challenger Motor Freight Clarke Transport Inc. Consolidated Fastfrate Inc. Contrans Flatbed Group LP (Contrans) Contrans Group Inc. Cooney Group of Companies Day & Ross (Day & Ross) Day & Ross Dedicated Logistics (Day & Ross) Day & Ross Transportation Group DCT Chambers Trucking Erb Group of Companies Fastrax (Day and Ross) Fluke Transportation Group Gibson Energy ULC Groupe Boutin Groupe Guilbault Ltee. H & R Transport Limited Hercules Highland Transport (TransForce) Hudson’s Bay Company 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 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 Muskoka Transport Normandin Transit Northern Industrial Carriers Paul’s Hauling Ltd. Penner International Purolator Courier LEGEND:THE TOP 100

Headquarters Brampton, ON Moncton, NB Winnipeg, MB Richmond, BC Bonnyville, AB Steinbach, MB Winnipeg, MB Kitchener, ON Simcoe, ON

Customer Line 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

Web Address 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

Operating Area 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

Concord, ON

905-695-3841

www.calyxinc.com

North America

Concord, ON Toronto, ON Calgary, AB Concord, ON Brampton, ON Sherwood Park, AB Coteau du Lac, QC Kitchener, ON Cambridge, ON Concord, ON Woodbridge, ON Hagersville, ON Woodstock, ON Belleville, ON Hartland, NB Brampton, ON Hartland, NB Vernon, BC New Hamburg, ON Florenceville, NB Hamilton, ON Calgary, AB Plessisville, QC Quebec City, QC Lethbridge, AB North York, ON Markham, ON Mississauga, ON Wroxeter, ON Belleville, ON Trois-Rivieres, QC Saskatoon, SK Toronto, ON Winnipeg, MB Prescott, ON Woodstock, ON Puslinch, ON Edmonton, AB Brampton, ON Oshawa, ON Gore Bay, ON Brampton, ON Thunder Bay, ON Belleville, ON Dieppe, NB Concord, ON Aldersyde, AB Mississauga, ON Bracebridge, ON Napierville, QC Edmonton, AB Winnipeg, MB Steinbach, MB Mississauga, ON

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 800-268-1564 800-263-8383 800-819-5259 613-962-6666 866-DAY-ROSS 905-799-6500 866-DAY-ROSS 250-549-2157 800-665-2653 506-392-2600 800-263-4843 403-206-4000 800-267-4509 800-361-2093 403-328-2345 800-822-4512 800-268-1729 416-644-2700 800-265-3071 800-267-1888 819-370-3422 800.667.8557 800-856-5559 888-488-6878 800-461-8000 800-465-8265 800-263-8267 780-468-4300 855-256-6647 800-565-4646 800-461-1168 905-792-6100 807-623-0054 800-565-3708 888-MIDLAND 800-646-2013 800-661-1469 905-823-7800 800-461-5808 800-667-8780 780-465-0341 204-633-4330 866-729-7134 888-744-7123

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.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.erbgroup.com www.fastrax.ca www.fluke.ca www.gibsons.com www.boutinexpress.com www.groupeguilbault.com www.hrtrans.com www.herculesfreight.com www.highlandtransport.com www.hbc.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.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.muskoka-transport.com www.normandintransit.com www.nictrucking.com www.paulshauling.com www.penner.ca www.purolator.ca

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

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 2 years are removed from the list.

26 FLEET EXECUTIVE ❙ January/February 2013

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A capacity and capability guide for the country’s largest motor carriers Service D,I,LTL,TL,W D,E,F,I,L,LB,LTL,P,TC,TL D,E,F,L,P,TC,TL D,DB,F,I,L,LB,TL, W D,DB,E,F,I,L,LB,LTL,TC,TL,W F,I,L,TL,W D,E,I,L,TC,TL,W D,E,F,LTL,TC,TL D,F,L,LTL,TC,TL

Straight Trucks 110 150 3

E,I,TC D,DB,E,F,HG,L,LB,LTL,TL LTL D,E,F,I,L,TC,TL,VC 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,W D,F,I,L,LTL,TC,TL D,E,I,LTL,P,TC,TL FB,TL D,DB,F,I,TL F,LTL,TC,TL D,L,W D,DB,F,LB,TL D,E,L,LTL,TC,TL F,I,TC,TL,VC D,DB,E,F,L,LTL,TC,TL DB,LB,W D,E,F,I,L,LTL,TC,TL D,I,L,LTL,TC,TL I,L,TC,TL,W LTL,TL E,L,TC,TL D,I,TL,L D,E,HG,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,W DB,LB,TL TL D,E,F,L,LTL,TL,W P D,E,HG,I,L,LTL,TL,VC,W D,E,F,I,L,LB,LTL,P,TC,TL,W 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,W D,TL D,E,F,L,LTL,TL D,I,TL F,L,TL E,F,L,LTL,TC,TL,VC D,E,I,TL D,DB,E,L,LB,TL,W D,E,TL,W D,E,LTL,TL CODES

By WordSmith Media Inc.

Tractors 200 900 350 400 251 200 1250 125 285

Trailers 500 3000 850 1050 1069 400 3500 400 770

Containers 100 400

733

14 371 53

154 1717 296 800 76 270 378 325 1500 338 550 247 1355 220 1215 345 1623 283 645 235 200 790 270 325 650 187 180 150 192 365 193 640 296 250 400 216 252 255 59 225 795 403 180 190 805 145 145 210 140 321 150 251 359 492

1723 2207 1002 7000 315 600 1200 900 3500 739 920 416 2562 1000 2046 616 2832 745 1134 373 500 1818 650 1400 1125 328 458 1100 515 1150 527 1778 732 500 1300 356 659 650 321 420 1900 927 500 624 1924 941 411 185 350 875 1200 625 825 1171

204

817 1 2 40 1 39 151 123 337 157 1 18 75 5 49

3 40 13

10 759 20 87 144 7 167 8 3 3 10 0 164

Terminals 14 25 5 33 16 6 8 2 7

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

171

V,R,C

171

9 24 25 16 54 6 8 1 7 11 17 4

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

10 200

7000

371 490

7 34 15

6 7 61 600

20 600

6 496 35 174 650

5 11 5 1 15 7 13 10 24 4 5 2 6 2 19 12 5 3 2 2 14 79 4 68 22 4 10 27 3 2 3 2 1 4 6 6 123

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

O perating Area: Regional – One province/state; Multi-Regional – Selected provinces/states; North America – Canada, U.S.; International – Canada, U.S., 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; W – Warehousing. Web Services: Web Visibility – Tracking & tracing (V); Web Reports – Downloadable reports (R); Web Custom – Customizable reports (C).

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January/February 2013 ❙ FLEET EXECUTIVE 27

Top 100 Company Name Quik X Transportation (TransForce) Robert Transport (1973) Ltd. Rosedale Transport Rosenau Transport Schneider National Carriers SGT 2000 Shadow Lines Transportation Group Simard Transport SLH Transport Sokil Transportation Group Speedy Transport Sunbury Transport Ltd. System 55 Transport TForce Energy Services (TransForce) Thomson Terminals Ltd. Total Logistics Trucking TransForce Inc TransFreight Transport Couture et fils (TransForce) Transport Herve Lemieux Transport Morneau TransX Group of Companies Travelers Transportation Trimac Transportation Ltd. TST Overland Express UPS Freight VA 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 YRC Reimer Express Lines Ltd.

continued Headquarters Mississauga, QC Rougemont, QC Mississauga, ON Edmonton, AB Guelph, ON St-Germain-de-Grantham, QC Langley, BC Lachine, QC Kingston, ON Edmonton, AB Brampton, ON Fredericton, NB Oakville, ON Denver, CO Rexdale, ON Toronto, ON Montreal, QC Kitchener, ON Saint-Éphrem-de-Beauce, QC St-Laurent, QC Ste-Arsene, QC Winnipeg, MB Brampton, ON Calgary, AB Mississauga, ON Mississauga, ON Laurier Station, QC Surrey, BC Ingersoll, ON Toronto, ON Alliston, ON Coquitlam, BC Etobicoke, ON Toronto, ON Saskatoon, SK Mississauga, ON

Customer Line 800-461-8023 800-361-8281 877-588-0057 800-371-6895 800-461-3168 800-363-4216 800-663-1421 514-636-9411 800-661-2146 800-661-9923 905-455-8005 800-SUNBURY 800-268-5070 307-382-5650 800-771-7487 888-827-8521 514-331-4000 859-372-5935 418-484-2104 514-337-2203 514-325-2727 800-665-7392 800-265-8789 403-298-5100 888-878-9229 800-PICKUPS 800-363-8175 888-229-9889 800-265-6701 800-263-9588 800-461-4374 877-410-9411 416-621-9020 800-361-5576 800-667-7988 877-330-3321

Web Address www.quikx.com www.robert.ca www.rosedalegroup.com www.rosenau.org www.schneider.com www.sgt2000.com www.shadowlines.com www.simard.ca www.slh.ca www.sokil.com www.speedy.ca www.sunbury.ca www.system55.com www.Tforceenergy.com www.thomsongroup.com www.totallogistics.com www.transforcecompany.com www.transfreight.com www.tcfl.com www.transportlemieux.com www.groupemorneau.com www.transx.com www.travelers.ca www.trimac.com www.tstoverland.com 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 www.reimerexpress.com

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

Customer Line 416-679-7969 800-463-4460 800-263-2394 403-277-1166 800-263-0240 403-777-1644 450-628-0787 800-461-8813 902-468-3100 888-427-8729 519-682-3544 800-263-3642 888-209-3867 800-265-0444 800-668-9691 800-265-7868 905-815-9412 800-363-3666 800-461-8023 905-676-3750 905-212-9001 800-567-1470 800-661-9191 800-749-6960 403-279-8388

Web Address www.atssolutions.ca www.besner.com www.cavalier.ca www.transx.com www.empiretrans.com www.entrectransport.com www.transforcecompany.com www.transportgregoire.com www.gtltransportation.com www.ics-canada.net www.international-freight.com www.kingswayvrac.com www.contrans.ca www.mackinnontransport.com www.mcarthurexpress.com www.millcreek.on.ca www.mtmx.ca www.transforcecompany.com www.quikx.com www.sameday.ca www.trans4.com www.bourret.ca www.contrans.ca www.tvmltd.ca www.westfreight.com

Operating Area Multi-Regional North America North America Multi-Regional, North America Multi-Regional, North America, International Multi-Regional Multi-Regional, North America North America North America Multi-Regional, North America Multi-Regional, North America North America North America North America Multi-Regional, North America International Multi-Regional, North America Multi-Regional, North America Multi-Regional North America, International North America Multi-Regional, North America, International Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America

The next 25 Company Name ATS Retail Solutions (TransForce) Besner (TransForce) Cavalier Transportation Services DeckX Transport (QuikX) Empire Transportation Entrec Transportation Services, Ltd. Golden International (TransForce) Grégoire (TransForce) GTL Transportation Inc. ICS Courier (TransForce) International Freight Systems Kingsway Bulk (TransForce) Laidlaw Carriers Bulk LP (Contrans) MacKinnon Transport McArthur Express (TransForce) Mill Creek Motors P&W Intermodal / MTMX Logistics (TransForce) Papineau International (TransForce) Roadfast (TransForce) Sameday Worldwide (Day & Ross) Trans 4 Logistics (TransForce) Transport Bourret Tri-Line Carriers LP (Contrans) TVM Ltd. Westfreight Systems (TransForce)

LEGEND:THE TOP 100

Headquarters Toronto, ON St-Romuald, QC Bolton, ON Calgary, AB Grimsby, ON Calgary, AB Bois-des-Filion, QC Plessisville, QC Dartmouth, NS Mississauga, ON Tilbury, ON Pintendre, QC Woodstock, ON Guelph, ON Cambridge, ON Ayr, ON Oakville, ON Saint-Jerome, QC Mississauga, QC Mississauga, ON Mississauga, ON Drummondville, QC Rocky View, AB Cottam, ON Calgary, AB

28 FLEET EXECUTIVE ❙ January/February 2013

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Service LTL D,DB,E,F,I,L,LB,LTL,TC,TL,W D,E,I,L,LTL,TC,TL,W D,DB,E,F,I,L,LB,LTL,P,TC,TL,W D,DB,E,I,L,LB,TL DB,E,F,I,L,LTL,TC,TL,W D,E,I,LTL,TL,W D,E,I,L,LTL,TL D,E,I,L,LTL,TL,W D,E,F,I,L,LTL,P,TC,TL LTL DB,E,F,L,TC,TL D,F,L,TL F D,E,F,L,TC,TL,W D,E,F,I,L,LTL,TC,TL

Straight Trucks 2 15 50 70 3 65 0 100 80 4 126 2 2471

D,E,I,L,LTL,TL L,LTL,TL D,F,I,TC,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,W LTL E,I,L,LTL,P,TC,TL D,L,LTL,P,TL,W D,E,F,HG,I,L,LTL,P,TC,TL D,I,TL E,I,LTL,TL F,I,TL,W D,E,F,HG,I,L,LTL,TL,W D,L,TC,TL D,TL,W D,E,I,TL D,E,LTL,TL

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

CODES

2 39 31 33 3 18 2804 10 10 102 113 12 35

Straight Trucks 126 0 15 1

341

63 19 10 1

Tractors 167 1200 325 300 400 358 289 353 683 175 179 150 128 735 250 200 4015 222 85 261 250 1500 275 1011 350 145 195 350 280 428 280 94 325 355 326 475

Trailers 536 4000 1013 1050 1200 1100 962 350 3300 600 624 350 410 565 800 420 12097 2065 293 222 736 3000 800 2397 1018 282 795 700 518 1345 1120 225 690 1100 755 1281

Tractors 25 90 90 150 68 60 107 100 85 1 125 84 140 75 88 120 76 95 17 63 128 110 128 124 111

Trailers 166 265 230 200 311 240 220 340 250 3 150 150 282 183 248 162 0 275 222 170 250 300 193 285 150

Containers 250 200 400 230 120 560

639 67 900

599 100 250 210

Containers

175 20

Terminals 12 12 14 22 1 8 6 7 15 5 5 4 1 17 3 6

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

12 2 2 14 13 6 47 22 48 5 7 1 21 2 12 2 5 8 21

V,R,C V,R,C

Terminals 15 4 5 4 1 5 1 2 2 30 2 3 2 1 1 1 1 2 1 32 1 2 2 2 5

Web V

V,R,C V, R

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

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

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

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January/February 2013 ❙ FLEET EXECUTIVE 29

Transforce owned companies Company Name TransForce Inc A&M International (TransForce) ATS Retail Solutions (TransForce) Bergeron-Maybois (TransForce) Besner (TransForce) Canadian Freightways (TransForce) Canpar Transport (TransForce) CF Dedicated Services (TransForce) CF Truckload & Logistics (TransForce) CK Logistics (Transforce) Click Express (Transforce) Concord Transport (TransForce) Durocher International (TransForce) E&L Logistics (Transforce) Ganeca (TransForce) GHL Transport (TransForce) Golden International (TransForce) Grégoire (TransForce) Highland Intermodal (TransForce) Highland Transport (TransForce) ICS Courier (TransForce) JC Germain (TransForce) Kingsway Bulk (TransForce) Kingsway Transport (TransForce) Kobelt Transportation (Transforce) La Crete Transport Legal Freight Services (TransForce) Loomis Express (TransForce) McArthur Express (TransForce) McMurray Serv-U Expediting (TransForce) Mirabel Logistic (TransForce) P&W Intermodal / MTMX Logistics (TransForce) Papineau International (TransForce) Pedersen Transport (Transforce) Quik X Logistics (Transforce) Quik X Transportation (Transforce) Rebel Transport (TransForce) Roadfast (Transforce) St-Lambert (TransForce) Stream (Transforce) TForce Energy Services (Transforce) Trans 4 Logistics (Transforce) Transport Couture et fils (TransForce) Transport Nordique (TransForce) TST Expedited Services/TST Air (TransForce) TST Overland Express (TransForce) TST Truckload Express (TransForce) Westfreight Systems (TransForce) Winalta (TransForce)

Headquarters Montreal, QC East Angus, QC Toronto, ON Amos, QC St-Romuald, QC Calgary, AB Brampton, ON Edmonton, AB Edmonton, AB St Laurent, QC Edmonton, AB Toronto, ON St-Felix-de-Kingsey, QC Brossard, QC Carignan, QC Anjou, QC Bois-des-Filion, QC Plessisville, QC Markham, ON Markham, ON Mississauga, ON Trois-Rivieres, QC Pintendre, QC Toronto, ON Sherbrooke, QC Lacrete, AB Edmonton, AB Brampton, ON Cambridge, ON Fort McMurray, AB Anjou, QC

Customer Line 514-331-4000 800-832-3865 416-679-7969 819-727-9404 800-463-4460 888-868-7923 800-387-9335 780-637-8749 780-637-8749 877-856-7580 780-637-8749 416-679-7400 800-267-2042 450-462-0941 800-561-7444 514-351-4501 450-628-0787 800-461-8813 800-268-6794 800-268-1729 888-427-8729 819-370-3422 800-263-3642 800-856-5559 819-566-6688 780-928-3989 780-452-7221 855-256-6647 800-668-9691 780-791-3530 514-353-8186

Web Address www.transforcecompany.com www.transforcecompany.com www.atssolutions.ca www.transforcecompany.com www.besner.com www.canadianfreightways.com www.canpar.com www.cfmvmt.com www.cfmvmt.com www.cklogistics.ca www.clickexpress.com www.concordtransportation.com www.durocherinternational.com www.ellogistics.ca www.ganeca.ca www.camionnageghl.com www.transforcecompany.com www.transportgregoire.com www.highlandtransport.com www.highlandtransport.com www.ics-canada.net www.transforcecompany.com www.kingswayvrac.com www.kingswaytransport.com www.kobelttransportation.com www.latrans.com www.legalfreight.com www.loomis-express.com www.mcarthurexpress.com www.mcmurrayservu.com www.transforcecompany.com

Operating Area

Oakville, ON

905-815-9412

www.mtmx.ca

Multi-Regional, North America

Saint-Jerome, QC Claresholm, AB Mississauga, QC Mississauga, QC Edmonton, AB Mississauga, QC Saint-Romuald, QC Mississauga, ON Denver, CO Mississauga, ON Saint-Éphrem-de-Beauce, QC Saint-Jerome, QC Windsor, ON Mississauga, ON Mississauga, ON Calgary, AB Edmonton, AB

800-363-3666 877-965-2583 800-461-8023 800-461-8023 780-464-5171 800-461-8023 888-338-3381 905-625-1770 307-382-5650 905-212-9001 418-484-2104 800-363-3666 888-486-8911 888-878-9229 888-878-9755 403-279-8388 780-447-3521

www.transforcecompany.com www.pedersentransport.com www.quikx.com www.quikx.com www.rebeltransport.ca www.quikx.com www.st-lambert-transport.com www.transforcecompany.com www.Tforceenergy.com www.trans4.com www.tcfl.com www.transforcecompany.com www.tst911.com www.tstoverland.com www.tstoverland.com www.westfreight.com www.winaltatransport.com

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

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

Contrans owned companies Company Name Contrans Group Inc. 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 Group LP (Contrans) Laidlaw Carriers Tank LP (Contrans) Laidlaw Carriers Van LP (Contrans) Peter Hodge Transport Limited (Contrans) S&S Enterprises (Contrans)

LEGEND:THE TOP 100

Headquarters Woodstock, ON

Customer Line 800-819-5259

Web Address www.contrans.ca

Operating Area

Truro, NS

800-565-7554

www.brookville.ca

North America

Oakville, ON London, ON Perth, ON Woodstock, ON Hagersville, ON Woodstock, ON Puslinch, ON Milton, ON Saint-Barthelemy, QC

877-388-2888 800-265-0934 800-450-9483 888-209-3867 800-263-8383 800-465-8265 800-263-8267 800-387-6933 450-885-3911

www.cornerstonelogistics.com www.contrans.ca www.contrans.ca www.contrans.ca www.contransflatbedgroup.com www.contrans.ca www.contrans.ca www.peterhodgetransport.com www.contrans.ca

North America North America North America North America North America North America North America North America North America

30 FLEET EXECUTIVE ❙ January/February 2013

trucknews.com

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

Straight Trucks 2471 1 126 53 817

1 1

341 13

759 20

Trailers 12097 127 166 101 265 1002 315 59 98

8 58 61

27 108 116

29 32 107 100 60 180 1 193 84 296

95 50 220 340

36 39 59 88 4 20

56 52 321 248 5 48

Containers 639

121 458 3 527 150 732

F,I

Terminals 1 15 3 4 25 54 1 2 1 1 6 2 1 1 1 1 2 1 4 30 2 3 12 1 5 2 79 1 1 1

175

1 2 5 1 12 2 1 1 18 17 1 2 1 2 22 1 5 1

95 34

275 115

167 19 17 16

250

126 19 2 4 146 18

735 128 85 42 8 350 65 111 9

536 60 222 32 4 565 250 293 100 12 1018 165 150 19

Tractors 1355

Trailers 2562

Containers

FB,TL

L TL DB,LB,TL TL FB,TL DB,LB,TL TL DB,LB,TL TL

64 61 140 247 216 252 85 24

99 108 282 416 356 659 149 44

1 1 2 2 4 2 2 1 1

D,HG,L,LTL,TC,TL LTL,TL L LTL TL TL F,L W F D,I,L,TL L,LTL,TL D,L,LB,TL,HG D,E LTL D, TL F,LTL,TL F,L

Service

CODES

Tractors 4015 31 25 48 90 296 76 6

Straight Trucks 39

67 6

Terminals

Web

V V,R,C V,R,C

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

V,R,C V V V,R

V,C V V,C

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

Web

trucknews.com

January/February 2013 ❙ FLEET EXECUTIVE 31

Contrans owned companies Company Name Tri-Line Carriers LP (Contrans) Tri-Line Disposal Inc. (Contrans) Tripar Transportation LP (Contrans) Wilburn Archer Trucking (Contrans)

Headquarters Rocky View, AB Edmonton, AB Oakville, ON Norwood, ON

Customer Line 800-661-9191 780-444-8805 800-387-7210 800-463-8136

Web Address www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca

continued Operating Area Multi-Regional, North America North America North America North America

Calyx owned companies Company Name Calyx Transportation Group Calyx Ground Transportation Solutions (National Fast Freight, Totalline) Kreative Carriers (Calyx) Muirâ&#x20AC;&#x2122;s Cartage (Calyx)

Headquarters Concord, ON

Customer Line 905-695-3841

Web Address www.calyxinc.com

Operating Area

Concord, ON

905-695-3841

www.calyxinc.com

North America

Vaughan, ON Concord, ON

905-695-3841 800-646-2013

www.kreativecarriers.com www.muirscartage.com

North America Multi-Regional, North America

Day & Ross owned companies Company Name Day & Ross Transportation Group Sameday Worldwide (Day & Ross) Day & Ross (Day & Ross) Day & Ross Dedicated Logistics (Day & Ross)

LEGEND:THE TOP 100

Headquarters Hartland, NB Mississauga, ON Hartland, NB Brampton, ON

Customer Line 866-DAY-ROSS 905-676-3750 866-DAY-ROSS 905-799-6500

Web Address www.dayrossgroup.com www.sameday.ca www.dayross.ca www.dayross.ca/dedicated

Operating Area North America, International North America North America

Service FB,TL TL LTL,TL DB,LB,TL

34 4

Tractors 128

Trailers 193

35 46

103 65

Containers

Terminals 2 1 2 1

Web

Service

Straight Trucks 14

Tractors 154

Trailers 1723

Containers 171

Terminals 9

Web V,R,C

E,I,TC

733

171

V,R,C

TL D,TL

14 145

49 941

1 3

V,R,C

Straight Trucks 337 63 151 123

Tractors 1623 63 1215 345

Trailers 2832 170 2046 616

Terminals

Web

32 34 15

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

Service E,HG,L,LTL,P,TC LTL,TC,TL,F D,L,W

CODES

Straight Trucks

Containers

Miles go up. Costs go down. Tank empties. Bank fills. Impossible? Not with PeopleNet. We can see opportunities for MPG gains where others can’t. Guaranteed. Find out more and get the power too:

Top Tier

In search of the

BIG DEAL

By Harry Rudolfs

ast year didn’t see the major deals like the ones TransForce made for DHL Canada and Dynamex in 2011. But although acquisitions may have been flatter in the TL and LTL sectors, things have been heating up at the other ends of the spectrum. David Newman, transportation analyst with Cormark Securities, believes this bifurcation of transactions in the trucking industry toward asset-light and asset-heavy concerns is the result of a flat freight market up the middle, while activity in heavy haul and bulk was the result of fairly robust energy markets. Also, asset-light tends to perform better on a relative basis in periods of weaker economic activity. Newman sees the increased interest in non-asset 3PLs as a response to a tepid economy. “With extra capacity in a weaker economic environment, shippers tend to look for better deals, which 3PLs may be able to source,” says Newman. Mike McCarron, former managing partner of MSM Transportation, recently sold to Wheels Group of Mississauga, Ont., for $18.6 million. He thinks there’s lots of room for growth in this segment. “The use of third-party logistics providers is more prevalent in other parts of the world than North America, and it’s become a $13 billion industry in Canada. Many of those guys who started those 3PLs back in the early 1980s are now graying

34 FLEET EXECUTIVE ❙ January/February 2013

Top T mergers.indd 34

Consolidation will continue to drive the trucking industry with interest in 3PLs and specialized haulers heating up. But will the ‘big deal’ remain elusive?

and looking for an exit strategy. I think you’ll see lots of deals among 3PLs as consolidation continues,” says McCarron. Although the MSM purchase was between two Canadian companies, US firms are also keenly interested in the Canadian 3PL market. In August, XPO Logistics of Greenwhich, Conn. acquired Kelron Logistics, a non-asset 3PL with operations in Toronto and Vancouver. Later in the year, Torus Freight Systems of Richmond Hill, Ont. was purchased by Transplace, a large 3PL and technology firm based near Dallas, Texas. “Yes Canada is of particular interest to us,” according to Transplace CEO Tom Sanderson. “We have a strong US presence and we started from scratch in Mexico five years ago. But we needed a foothold in Canada to complete our North American service pack.” Specialized and bulk commodity trucking sits at the other end of the scale from the logistics sector, but it, too, experienced increased interest and activity in 2012. These are asset-heavy, niche-driven operations that require a significant investment in specialized equipment. TransForce entered the US oilfield business after buying I.E. Miller Services in 2011, an oilfield transport provider with eight terminals from North Dakota to Louisiana. In 2012, the Canadian trucking giant increased its presence by acquiring assets from Peak USA Energy Services of Texas, a similar oilfield service company based in Texas. But TransForce has also been busy acquiring shares in the trucknews.com

13-02-01 2:54 PM

LTL market, and recently disclosed a 6.2% stake in Vitran that it had bought on the open market in December. Cormark’s Newman sees this as either a small investment or potentially the start of a strategic takeover. “We believe Vitran could be in play. If the hoped-for recovery does not come to fruition, then TFI may be interested in bidding for Vitran’s profitable Canadian LTL business, which has a strong coast-to-coast overlap with TFI’s LTL operations,” says Newman. Nonetheless, TransForce’s recent moves into the US market indicate that it is looking south of the border for growth opportunities. But the US market can be a difficult place to navigate, as many Canadians have learned. “The competitive dynamics of the US market is prohibitive to a smaller Canadian carrier,” says Walter Spracklin, analyst for RBC Dominion Securities. “Vitran has tried and it hasn’t been an easy thing. But TransForce has been building in the US, keeping its focus on its same-day delivery service through Dynamex and its specialized services through its oilfield division in the US.” TransForce is growing very attractive bundles of services that could accrue high valuations when and if they’re sold. “We see (TransForce’s) waste haulage, in particular, as a gem,” says Spracklin. “It’s a less competitive market with higher barriers to entry and more attractive pricing.” Trimac is another Canadian company that is not afraid to play in the US pool. A publicly-traded company with a strong family history, this specialized commodity hauler has been operating in the US since 1979, and runs the American division as a separate entity. In 2012, Trimac US purchased two tanker washing businesses in Spartanburg S.C., and Charlotte, N.C., an area that is strategically important because of a large volume of tanker traffic. Trimac Transportation Services chair and CEO Jeffrey J. McCaig suggests the key to working in the US is to separate the Canadian and US divisions and run them independently. “I think we have the right approach,” he says. “It’s a different market with a different set of strategies and approaches, and we see as much or greater potential for growth in the US. We do have a central dispatch and a central planning arm. When we have a truck crossing the border, there’s someone on our team looking for a load to come back.” Trimac was busy acquiring companies on the Canadian front as well. In 2012, it bought the tanker division of Liquid Cargo in Mississauga, and controlling interest in Fortress Transport in Guelph, Ont. Another interesting project is Northern Resources Trucking which is a partnership between Trimac and several First Nations bands in northern Saskatchewan. Trimac recently took back majority interest in Northern Resources, whose share had become diluted over the years as other First Nations bands joined the partnership. McCaig’s position on acquisitions is perhaps unique. For one thing, Trimac doesn’t believe in selling properties after it has acquired them – they’re in it for the long trucknews.com

Top T mergers.indd 35

haul. And the corporation doesn’t cater to using consultants or agents to find deals, nor does Trimac have a department specifically looking at acquisitions. “Our operations people know who the competitors are,” says McCaig. “I don’t like the model of going out and chasing acquisitions. Liquid Cargo was a competitor for many years that has a paving business and other interests. And when they wanted to divest themselves of their truck line, they knew we could provide it a good home.” Interestingly, another major player, Mullen Group, made no acquisitions in 2012. Mullen’s acquisition team typically looks at about one hundred possible deals during the year, about a dozen of them seriously. “We didn’t do anything in 2012, and I don’t know why, there are lots of opportunities, but nothing jumped out at us,” says CEO Murray Mullen. “But we don’t target acquisitions on an annual basis, and sometimes they come in bunches.” But acquisitions seem to have come in bunches for Stan Dunford, chair of Contrans, another chief executive who, like Murray Mullen, is not interested in looking Stateside for acquisitions. Contrans had a busy year, beginning by acquiring bulk and pneumatic tank carrier Wilburn Archer Trucking of Norwood, Ont., finalizing the deal to absorb MacKinnon Transport’s van division and drivers, and then acquiring Peter Hodge Trucking of Milton, Ont., giving it a significant presence in the dump and tank sector in southern Ontario. Meyers Transportation Services of Belleville, Ont., also found a good fit for their transportation businesses, but they had to go across the border to find it. Meyers just completed a transaction to acquire an 80,000-sq.-ft. warehouse in Cheektowaga, N.Y., close to the Canadian border. According to Meyers’ president Jacquie Meyers, the new warehouse will allow them to consolidate the small warehousing operation they already had in Buffalo and

“

I don’t like the model of going out and chasing acquisitions.

Jeffrey J. McCaig, chair and CEO, Trimac Transportation Services

”

January/February 2013 ❙ FLEET EXECUTIVE 35

13-02-01 2:54 PM

Top Tier

“As far as general freight goes it’s hard to tell the difference between one carrier and another except on rates.“

Douglas Nix, vice chairman of Corporate Finance Associates

to integrate it with the trucking business they own in St. Catherine’s, Ont. “We are always trying to strengthen our ties with US carriers by giving them easy access to the Canadian market,” she says. “It was the synergies that sealed the deal in the end.” Dan Goodwill of Dan Goodwill and Associates, suggests that cooperation between Canadian and US carriers is a paradigm that runs throughout the industry. “Typically, Canadian LTL carriers form partnerships with US regional and national carriers,” he says. “This seems to be more prudent financially than sticking their toe in the US market. Canadian LTL carriers haven’t been all that successful setting up shop in the US.” One major Canadian carrier that espouses the cooperative model is Day and Ross Transportation, headquartered in Hartland, N.B. According to COO Douglas Harrison, “We have a partnership with R and L Carriers, the fourth largest LTL carrier in the US,” he says. “It’s a great way to leverage our expertise and market positions on both sides of the border. This is not an interline relationship, but a true exclusive relationship. Our executives meet together on a quarterly basis.” Most recently, Cavalier announced a new partnership with RIST Transport, which will combine the two carriers’ networks and provide two-day service between the northeastern US and markets in Ontario and Quebec. RIST has 11 terminals in the northeastern US, covering Pennsylvania, New York, New Jersey, Connecticut and Massachusetts. The partnership also will include freight consolidation services and warehousing on both sides of the border. Maritime-Ontario Freight Lines also followed the US partnership model, partnering with U.S. Xpress to launch a cross-border North American shipping solution. Through the partnership, each company will leverage its dominant national network to move freight across the border and throughout each country, creating one seamless North American network, covering the US, Canada and Mexico. M-O will carry the freight across the Canada/ US border crossing and U.S. Xpress will be responsible for Mexico/US Border crossings. “While many companies on both sides of the border claim to have an international presence, the extent of their reach is limited,” said Maritime-Ontario chief operating officer, Bill Henderson. “With our partnership, we will have more than just a few trucks over the border. Both companies offer best-in-class transportation solutions and are recognized premium brands in their respective countries. Needless to say, we believe this 36 FLEET EXECUTIVE ❙ January/February 2013

Top T mergers.indd 36

is a true game-changer for North American freight hauling.” With the focus on acquisitions as a prescription for growth, it’s not surprising that American investors are looking north. “In the past few years, we’ve seen Canadian companies coming to the US, and recently the push has been to do cross-border business with Mexico, and now the emphasis is doing business in Canada,” says Andy Ahern, president of Ahern and Associates of Phoenix, Ariz. Ahern suggests that there is equity money available in the US and that Canada looks like a good prospect. “They (US investors) see Canada as a stable market. Look at Canada Cartage for example (long-standing Canadian family trucking business bought by a US equity firm in 2007). This was an old-line company with lots of dedicated carriage work. This was a good company with not a lot of risk and a lot of upside.” But can we expect to see a real big deal in the future along the lines of what YRC did a few years ago, bringing Yellow, Roadway and Reimer together under the same banner? “I don’t see it happening,” says Douglas Nix, vice chairman of Corporate Finance Associates. “There’s a lot of guys shopping for distressed assets and under-performing companies. You could line up a hundred buyers for a company but that doesn’t mean you’ll get a premium valuation from any of them.” Nix thinks there has to be a compelling reason for a company to buy out another one. “As far as general freight goes it’s hard to tell the difference between one carrier and another except on rates. What I’ve seen is a lot of guys looking to fill niches and service holes. They’re focusing less on size and more on their needs.” But Nix does see growth happening in the contract and dedicated services division. “Where I do see an advantage is for those providers who can supply a customer with dedicated equipment and drivers. This takes the transport provider out of the spot market and into a deeper relationship with the shipper.” FE Let’s continue the discussion. Plan to attend our annual Surface Transportation Summit at the Mississauga Convention Centre to hear about the most pressing issues in truck and rail transportation. Mark Oct. 16 on your calendar. Harry Rudolfs is the rare combination of a journalist with direct industry experience, having spent 35 years working in the trucking industry. This behind-the-scenes insight allows him to tackle the issues transportation professionals love to talk about – and, occasionally, a few they don’t. trucknews.com

13-02-01 2:54 PM

Spend more time on the road and less time worrying about the bottom line. Castrol’s full line-up of Heavy Duty lubricants are field-tested and fleet approved. Beyond providing your equipment with extreme protection and extended drain intervals, you’re decreasing maintenance costs and looking out for your bottom line. Less fuel, fewer top-ups and more time on the road all add up to lower operational costs and a more efficient fleet. For more information on Castrol’s Heavy Duty line-up call 1-888-CASTROL or visit www.castrol.ca

Top T mergers.indd 37

13-02-04 12:52 PM

SHIPPER-CARRIER ROUNDTABLE

RATE NEGOTIATIONS:

LEADING SHIPPERS AND CARRIERS LOOK AHEAD

In a panel session specifically dedicated to rate negotiations, leading shippers and carriers considered if there is a better way to approach what has become a virtual tug-of-war. In this second and final installment, editorial director Lou Smyrlis asked the panellists to look into the future and consider whether the differences between the two sides can realistically be smoothed and their priorities be brought into sync. Here’s what they had to say: Einwechter: It has to happen. Forget that we are truckers or shippers. As citizens of this country, for us to stay competitive and have a vibrant economy, forces are going to dictate that there is going to have to be better collaboration. We are going to be short-staffed and overregulated and we are going to have to work very collaboratively to make sure we can still move our freight as cost effectively as possible and in a timely fashion. I think it is going to happen. I’ve seen it. I’ve been hoping for it to be much closer by now

than what it is. Unfortunately, 2008 was a bit of a reality check and set us back for a bit with a shellshock effect, but we are still marching forward. It has to happen. Springer: I think collaboration can’t be an overused word. We are just scratching the surface to breaking down carrier-shipper relationships. Gone are the days where shippers just demanded without understanding the true cost from the carrier’s perspective. It really comes

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Decisions pt2.indd 38

time again that their customer-focused approach, along with their dedicated support team, strives to work hand in hand with their customers to unearth ways that they can help improve how they service and add value to their customers. Coupled with over 22 years experience and dedicated support to the Transportation and Logistics Industry, Shaw Tracking is committed to working with their customers to perform at unprecedented levels. Shaw Tracking continues to act as founding sponsor of the “Shipper-Carrier Issues Roundtable” for the seventh consecutive year. Shaw Tracking is pleased to continue to support the important insight and dialogue brought forward by prominent industry stakeholders. To learn more about Shaw Tracking, visit www.shawtracking.ca. trucknews.com

13-02-01 3:44 PM

DAN EINWECHTER CEO, Challenger Group of Companies

down to the opportunity of taking the waste out of the system. Until we sit down and understand that and drive towards a win-win scenario, we’ll never get there. The key to making that happen is going to come down to a lot of trust. When you get into that collaborative environment, it means we really need to truly understand each other’s costs, and how what we are doing is affecting the other’s bottom line.

BRIAN SPRINGER Vice-president, transportation, eastern Canada, Loblaw Companies

WESLEY ARMOUR President, Armour Transport

LENGTH OF CONTRACT PERIODS Truckload 5+ year 2%

2% 4-5 year

<1 year 28%

1 year 49%

20% 2-3 year

MICHAEL TAN Vice-president, supply chain and transportation, Hudson’s Bay Company

WHERE’S THE SECURITY? Although there appears to be a growing move towards RFPs when dealing with motor carriers, Canadian shippers are still predominantly using contracts of a year’s duration or less, according to our latest Transportation Buying Trends survey. The national survey was conducted in late 2012 in partnership with the Canadian Industrial Transportation Association, Cormark Securities and CITT.

Less than Truckload

just drivers. It’s much tougher than it was five or 10 years ago. <1 year 2% We all realize it’s just going to 26% get harder to do. The only thing Tan: I’m going to reiterate the 1 year that could prevent a carrier collaboration. I don’t think we 54% 16% from expanding is finding good can afford not to be collabora2-3 year talent for the company. It’s tive going forward. Supply chain 1% not the assets that’s the issue; all demands are only growing in 4-5 year of us can go out and buy assets. complexity from both the carrier and shipper perspective. Carriers have real cost I don’t think we want to see this industry get to pressures to deal with and shippers in Canada will a point where it becomes be pressured more than ever by ever-increasing very unprofitable and with competition, not only nationally, but globally. We no competitive solutions. I need to be much more transparent with each other know that’s not where shipto identify mutually beneficial opportunities and I pers want to be. So how do think we owe it to ourselves, our businesses, our we make sure the customer national economy and, frankly, the environment to really understands carrier collaborate on ways to reduce idle time, excess costs and wants the carrier To view our video coverage of this to be successful because capacity and empty miles. year’s shipper-carrier roundtable panel, that’s so important longvisit www.trucknews.com/videos. Armour: I think it’s so important today that a rela- term? We have to do that tionship of trust and respect is built up between together as a team. We have the customer and the carrier. Also, I think it’s im- to trust each other, we have portant that the people who are involved in the to be open about what our negotiations for each company know that trust costs are, but we have to be and respect is there. Without that, I’m not sure careful who we do that how far we are going to go. The other issue is the with because you have to availability of people in the future. I don’t think make sure they understand there is anyone who can say it isn’t tougher to and that you are both on the find good people for all industry positions – not same page. FE 5+ year

video stream

trucknews.com

Decisions pt2.indd 39

January/February 2013 ❙ FLEET EXECUTIVE 39

13-02-01 3:44 PM

Cummins ISX15

Together again

ProStar+ Day Cab

Geared Up Jan.indd 40

13-02-04 1:29 PM

avistar International reached an important milestone recently when it achieved an internal ‘Ok-to-ship’ status on the first 300 ProStar+ builds with ISX15 engines. The desBy James Menzies ignation, reached five days ahead of schedule, means the ProStar+ with ISX15 has been sufficiently field-tested and is now ready for deployment into customer fleets. It’s a significant milestone for Navistar, considering the launch of the ProStar+ with ISX power was only announced in August, requiring an unprecedented four-month development program.

ending its longtime relationship with Cummins, at least in the North American market. (Navistar continued to offer Cummins engines in certain export markets with less stringent emissions requirements). Here in North America, Navistar’s International trucks would not be reconfigured to accommodate the bulky SCR hardware and its related plumbing. Instead, the company would forge ahead with what it dubbed Advanced-EGR and would cease offering Cummins engines. Navistar, having banked a sizeable stockpile of EPA emissions credits for having been cleaner than required in previous emissions go-rounds, was able to work on its in-cylinder solution well after the Jan. 1, 2010 implementation date for EPA10. While the industry came to accept, even embrace SCR, Navistar steadfastly defended its position to eliminate

The International ProStar and Cummins ISX engine – at one time one of the best-selling truck and engine combinations in the North American Class 8 market – are officially back together. And we get to go on the road in one of the very first ProStar+ tractors powered by an ISX.

I visited Navistar’s Lisle, Ill. headquarters within days of the announcement and enjoyed a behind-the-scenes tour of Navistar’s ‘SCR War Room,’ as well as a spin in one of the very first International ProStar+ tractors with a Cummins ISX15 engine.

The challenge

Navistar’s long and winding journey to EPA10 compliance has been well documented. While all other North American truck and engine manufacturers chose selective catalytic reduction (SCR) exhaust aftertreatment to meet the EPA10 NOx standard, Navistar saw an opportunity to differentiate itself from its competitors and offer what it perceived to be a more customerfriendly solution. Navistar would opt to eliminate NOx emissions in-cylinder, through heightened levels of exhaust gas recirculation (EGR), a technology employed to some extent by all engine manufacturers. Detractors felt it wasn’t possible to achieve the mandated NOx reductions using EGR alone, at least not without significant compromises in engine performance and reliability. One of those engine manufacturers was Cummins, which initially declared it would meet the EPA10 standard without SCR, but backtracked soon after and announced it would join the rest of the pack, minus Navistar, in pursuing SCR. That left Navistar at a crossroads, as the lone manufacturer to shun SCR. Would the company join Cummins in changing course and employing SCR, or continue to pursue the EPA10 standard without exhaust aftertreatment? Navistar opted to proceed with its in-cylinder solution, effectively trucknews.com

Geared Up Jan.indd 41

emissions in-cylinder. That all changed this past July, when Navistar acknowledged it would be unable to meet the EPA10 standard before its steadily dwindling bank of emissions credits would be exhausted. “That’s really where the wheels came off the cart,” Jack Allen, Navistar’s North America truck and parts president, told a small group of trucking industry journalists in August. “It’s not in the technology; it’s really in the timing of that technology being ready versus when the credits were going to run out. We got to the point in the intersection where those two factors were coming together like a freight train.” Allen’s comments followed a July 6 conference call, in which Navistar declared it would change directions and adopt SCR. On Aug. 2, it announced it would bring Cummins back into the fold and offer its ISX15 in several of its trucks. That same day, Navistar announced it would begin by offering the ISX15 in the ProStar+ in January 2013. It was an ambitious target, and meeting it would require a Herculean effort from the engineering departments of both Navistar and Cummins.

The execution

When I arrived in Navistar’s Lisle, Ill. headquarters, much had changed since the last time I visited in August. Former CEO Dan Ustian had been replaced with Lewis Campbell, who was charged with making the difficult decisions required to get Navistar’s financial house in order. Troy Clarke, the recently named president and chief operating officer of Navistar, was taking on a more visible role in the company’s restructurJanuary/February 2013 ❙ FLEET EXECUTIVE 41

13-02-01 3:35 PM

ProStar+ 15L

“

ing. A very public battle for seats around the boardroom table had been resolved, with Navistar finally relenting to activist investors Carl Icahn and Mark Rachesky and granting them or their representatives, positions as directors. Very quickly, the new leadership has instilled a culture of transparency. For example, staff now receive daily updates on how the company is performing in relation to key performance indicators. This transparency was on full display during my visit in December when I was invited into what Navistar has dubbed its ‘SCR War Room.’ This is the command centre from which the transition from Advanced-EGR to SCR has been orchestrated. Here, Thomas Smith, director of integrated ISX and SCR programs, serves as General. “A well-planned effort is really what leads to a well-executed effort,” he told me while explaining the meaning behind dozens of wall-mounted charts, timelines and diagrams. The largest of these charts is dubbed the “Integrated Master Schedule” in which every task is assigned and then updated by the team that’s working on the project. “The champions of those tasks update it so that as leaders, we can come in and quickly visualize if we are falling behind on something (marked in red) or are on track and completed (marked green),” Smith told me. “All this is done so we can get fixated down to the detail level of what people need to do to meet our deadlines with quality and really make a flawless launch. It’s a visual representation of what’s in front of us.” Another chart serves as a “Risk Matrix,” highlighting potential pitfalls and action plans to ensure they don’t come to bear. One example identified on the chart was a potential shortage of electrical harnesses. “We wanted to monitor that very closely,” Smith explained. 42 FLEET EXECUTIVE ❙ January/February 2013

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From the ISX program, there isn’t a milestone we established back in August that we haven’t met

”

“There was a lot of risk of not being able to have the physical parts we needed when we built the trucks. I’m happy to report we didn’t have any significant harness issues with our builds. No risks have manifested themselves into issues.” With its transition to SCR, Navistar is fast-tracking a launch process that would ordinarily take years. That, said Smith, has been the greatest challenge. “The time scale we’ve had has made us become more rigorous because we don’t have time to make a mistake and then recover from a mistake,” he explained. “This team didn’t have the chance to not hit it the first time, so we added some sub-elements to ensure we did hit it the first time. Typically, a 36-month to a four-year program builds in some ‘what-if?’ scenarios. We had to streamline that. We didn’t have the luxury to do a lot of development. We successfully squeezed this program down because we didn’t have a lot of development to do. We have a proven product in the ISX, we had an aftertreatment system that has been in production for four years

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and a truck that’s been in production since 2007 and that had this engine in it at one time. We just had to marry those back together again. We’re not developing any new technology and that was the real key.” The obvious risk in accelerating such an important project would be that of taking shortcuts, resulting in mistakes that would manifest themselves somewhere down the line. Smith insisted that hasn’t been the case. “The common misconception people have about engineering is, they think to go fast you have to cut corners, but in fact it’s the exact opposite,” Smith told me. “To go fast, you have to overlay more tests and more analysis, because you can’t afford to have a failure and back yourself up again – it’ll set you too far back.” While most of the initial focus within the SCR War Room has been on integrating the ISX15 and Cummins’ SCR aftertreatment system within the International ProStar+, at the same time, engineers are adapting Navistar’s own International MaxxForce 13 engine to accommodate SCR. The ISX project, however, has thus far presented the greatest challenge. “The ISX was the most challenging (project) because of the time scale,” Smith said. “We have a little bit more time with the other launches. Relative to when we made the decision to put the ISX in our trucks to when we had to produce the trucks that are going to customers at a great quality level, that was the most challenging aspect.” Navistar officials, including Smith, are quick to credit Cummins and its team of engineers with contributing to the success of the program. The two companies have fully-integrated engineering departments working together on the project and those not working under the same roof have twice-daily conference calls to discuss progress and to resolve any issues that have surfaced. Another wall chart within the War Room details Navistar’s timeline for its transition to SCR. So far, all the deadlines have been met, however unrealistic they may have seemed at the outset. “From the ISX program, there isn’t a milestone we established back in August that we haven’t met,” Smith said. “Delivery is key to this program and we have to hit our mark.”

The results

Shane Spencer is director of integrated reliability and quality with Navistar. It was his job to oversee field-testing of the initial International ProStar+ tractors with ISX engines. In addition to the 300 ProStar+ tractors slated to be delivered to customers as early as this week, Navistar’s Escobedo, Mexico plant has also churned out 15 more that were placed into the “Q-build” (Q for quality) fleet that Spencer oversees. trucknews.com

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He has these trucks scattered between test sites in Dallas, Texas; Denver, Col.; Boston, Mass.; Las Vegas, Nev.; and Fairbanks, Alaska. Then there was the truck parked in the Navistar parking lot on the day I visited. It was a ProStar+ 122 day cab with 450-hp ISX15 engine. The SCR system was tidily packaged in what Navistar calls a ‘switchback’ configuration. This common installation will be suitable for over 90% of Class 8 tractors operating in linehaul applications. The SCR packaging is similar, if not identical, to what you’ll find on any other truck make. Of the 15 Q-build tractors Navistar has produced, most have now reached about 230,000 miles in real-world testing. They’re run 22 hours a day, leaving two hours between driving shifts for engineers to conduct inspections, make necessary repairs, download trip reports, etc. During a two-hour drive over a combination of interstates and city streets, Spencer explained that testing has revealed no significant failures. “It has all been minor,” Spencer said of any problems that have arisen in testing. “Nothing has fallen off the truck. There have been no mechanical failures throughout the program. The only things we’ve had have been some on-board diagnostics monitoring tuning that we’re working on with Cummins.” One advantage Navistar enjoys by being the last to employ SCR, is that most of the initial hiccups with the technology have already been worked through. The Cummins engine and aftertreatment system are well proven, leaving Navistar to spend more time focusing on the smaller details, such as how the hardware is packaged and mounted to the vehicle. “We relied really heavily on the Cummins experience on the engine side of it,” Spencer explained. “We assumed they did their job right and it looks like they have, and we have focused more on the structural components; the new electrical system and plumbing that our trucks never had a need for and all that extra stuff, like the routing and clipping of harnesses. We’ve added extra clips even if we didn’t think we needed them to make sure the harnesses are staying put and staying dry.” The performance of the Cummins engine on the highway presented no surprises. It’s the same Cummins ISX15 you already know. On our drive, it was as smooth as ever, pulled our 77,000lb load effortlessly and lived up to its reputation as the benchmark to which other 15-litre engines are compared. As for the ProStar+, it’s a well-designed, fuel-efficient tractor. Navistar has taken its share of criticism over the course of the past two years, but few, if any, shots were directed at its flagship tractor. The truck we were in was a fairly basic spec’, but forward visibility was excellent and the cab was comfortable and ergonomic. The ProStar/ISX combination was a winner before, and there’s little reason to believe it won’t once again return to its former glory. FE January/February 2013 ❙ FLEET EXECUTIVE 43

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Remote diagnostics

proven to reduce downtime: Volvo By Lou Smyrlis The ability to access and transmit critical truck engine

data from trucks on the road to key decision makers responsible for their maintenance in a manner timely enough and accurate enough to allow smart decisions to be made is key to reducing downtime, Volvo Trucks North America executives believe. After listening to several motor carrier executives speak openly about the downtime plaguing the industry due to premature engine failure (an issue experienced by all engine brands) at a Volvo press event in Nashville, Tenn. at the start of the year, David Pardue, vice-president of aftermarket sales, was one of several Volvo executives who said they are working hard to be part of the solution. “The need for information is quicker and more thorough and what we are satisfied with today, we won’t be satisfied with tomorrow,” Pardue said. Volvo believes part of the answer lies with its Remote Diagnostics service, now a standard feature on every Volvo-powered VN model highway truck. The service provides proactive diagnostic and repair planning assistance with detailed analysis of 44 FLEET EXECUTIVE ❙ January/February 2013

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critical diagnostic trouble codes. It’s the first service being offered under the new Connected Vehicle Services category of the Volvo Trucks Support Services bundled aftermarket offering. The remote communication platform facilitates live dealer and customer communication through Volvo Action Service, Volvo’s 24/7 support team. Proactive diagnostics streamline service procedures with confirmation of parts on-hand before a truck arrives at a service location, increasing uptime, the company says. But Conal Deedy, product manager, communication and electronics, cautioned against the trap of “technology for the sake of technology.” There are thousands of fault codes on today’s commercial trucks that can be monitored and quickly reported – but that doesn’t mean they all should. Rather, the focus should only be on those critical to keeping the truck on the road. “It has to be about using technology to improve service and uptime. Our customers want actionable data that is accurate. They don’t want to be overloaded with fault codes,” Deedy said. Deedy also pointed to some impressive statistics racked up by the Remote Diagnostics program since its launch last May (it was tested for a year prior to that with more than 1,300 Volvo VNs being part of the field tests. Challenger Motor Freight was a test fleet in Canada). There are now more than 5,000 Volvos equipped with Remote Diagnostics and so far the service has managed to reduce average diagnostic time for targeted fault codes by 71%, reduce average repair time for targeted fault codes by 25%; and improve average uptime by one day per event. “Remote Diagnostics is streamlining the service procedure. It’s getting the right information to the technician,” Deedy said. Remote Diagnostics comes free of charge for two years with the purchase of all new Volvo trucks. Another wrinkle soon to be added to help streamline the service procedure when the truck comes into a Volvo dealership is a QR code label and reader capable of capturing all the vehicle information encrypted on the QR code label, such as the vehicle identification number, mileage, etc. and create a registered case number before the vehicle is assigned to a technician. This application, which will be made available on every Volvo coming out of the factory by around the end of the first quarter, will also capture the entire inspection and maintenance process, date stamp it, and maintain it as part of the vehicle’s history on a secure server. Customers will be able to log in and read up on the history of their vehicles. The truck’s file can also be assigned to other Volvo dealers should the truck require service beyond its home dealer. Volvo Trucks’ dealer network is also expanding, resulting in additional truck service bays, Volvo-certified technicians, and larger part inventories. For example, the new Nacarato dealership, which hosted the press conference, keeps $2 million worth of parts inventory on hand and is capable of servicing 30% more trucks at its new 80,000-sq.-ft. facility with 28 service bays. FE trucknews.com

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DASHBOARD

TransCore’s Canadian Freight Index TransCore Canadian Spot Market Freight Index 2007-2012 remains steady in November % % Spot market freight saw no change in month-over-month volumes 2007 2008 2009 2010 2011 2012 Change Change in November, according to TransCore’s Link Logistics Canadian Y-O-Y M-O-M Freight Index. Year-over-year load volumes, however, were down 173 214 140 171 222 220 -1% 1% Jan 15% from November 2011. In spite of the decrease, load volumes Feb 174 217 117 182 248 222 -10% 1% are still well above the November 2008 recessionary levels by 51%. Cross-border postings were very similar to October’s, which Mar 228 264 131 249 337 276 -18% 24% accounted for 69% of overall load volumes. Intra-Canada postApr 212 296 142 261 300 266 -11% -3% ings contributed 26% of the total load volumes, a decrease of 1% from the previous month. May 280 316 164 283 307 301 -2% 13% Equipment postings dipped slightly at 5% month-over-month, but Jun 288 307 185 294 315 295 -6% -2% experienced a year-over-year increase of 17%. Available capacity Jul 219 264 156 238 245 233 -5% -21% corresponds with numbers shown in November 2007. The top states of origin for loads destined to Canada were Aug 235 219 160 240 270 235 -13% 1% Ohio, California, Pennsylvania, Illinois, and Texas. Texas moved Sep 206 203 180 234 263 200 24% -15% from last month’s eighth spot to replace Michigan in the number Oct 238 186 168 211 251 215 -14% 8% five spot for November. Top destinations for loads imported into Canada were: Nov 227 143 157 215 252 215 -15% 0% • Ontario (56.5%), Western (21.2%), Quebec (20.1%), and Dec 214 139 168 225 217 Atlantic 2.1%. TransCore Canadian Spot Market Freight Index 2007-2012 Top regions for import equipment into Canada were: • Ontario (51.5%), Western (22.6%), Quebec (22.1%), and ago while the domestic truckload is still 6.5% below a year ago,” Atlantic (3.9%). said Doug Payne, president and COO of Nulogx. “Cross-border Regions of origins of loads within Canada were: • Western (49%), Ontario (29%), Quebec (16%), and LTL and truckload were both down in October from September; however, compared to a year ago, LTL and truckload are up 2.2% Atlantic (6%). TransCore’s Canadian-based Loadlink freight matching data- and 4.7%, respectively.” base constitutes the largest Canadian network of carriers, owner/ The CGFI is sponsored by Nulogx, a transportation manageoperators, freight brokers and intermediaries. More than 13 million ment solutions provider, and is used by shippers and carriers to full loads, less-than-truckload (LTL) shipments and trucks are post- benchmark performance, develop business plans, and secure competitive agreements. It was developed with the assistance of ed to the Loadlink network annually. The first six columns include monthly index values for years Dr. Alan Saipe. The most recent results are available at the CGFI 2007 through 2012. The seventh column indicates the percentage Web site: www.cgfi.ca. change from 2011 to 2012. The last column indicates the percent age change from the previous month to the current month. For the US truck tonnage rebounds in November purpose of establishing a baseline for the index, January 2002 US for-hire truck tonnage rebounded in November, with a 3.7% (index value of 100) has been used. gain that erased a loss of the same amount in October. November’s gain was the first since July of this year, according to the American Trucking Associations. The ATA’s for-hire truck Canadian shippers face rising trucking costs: CGFI tonnage index was up 1% compared to November 2011. Year-toThe cost of ground transportation for Canadian shippers increased date, tonnage is up 2.8% over the same period last year. “Sandy impacted both October’s and November’s tonnage by 0.45 % in October when compared with September results, acreadings,” ATA chief economist Bob Costello said. “But it was cording to the Canadian General Freight Index (CGFI). The Base Rate Index, which excludes the impact of accesso- still good to see tonnage snap back in November.” Costello rial charges assessed by carriers, increased by .01% when com- added he expects a boost to flatbed tonnage from the rebuilding pared to September. Average fuel surcharges assessed by carriers in the areas impacted by Sandy, but most of that won’t happen have seen an increase from 20.48% of base rates in September until the spring when the money starts flowing and the weather to 21.27% in October. This is the fourth consecutive month of is conducive to building. fuel surcharges increasing. Costello predicts slower tonnage growth in 2013 than 2012 as “Total costs for domestic LTL and truckload increased this better housing starts and auto sales will be offset by slower facmonth. Domestic LTL has seen an increase of 13.9% from a year tory output and consumer spending. FE trucknews.com

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January/February 2013 ❙ FLEET EXECUTIVE 45

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INSIDE THE NUMBERS

6.3

EXPECTATIONS FOR FREIGHT VOLUMES IN 2013

Increase

WHERE’S THE FREIGHT? Canadian carrier executives less optimistic about freight volumes in 2013

37%

Stay about the same

That’s the level of optimism, on a scale of 1 to 10, motor carrier executives feel about their business prospects this year, according to our latest research

51%

Decrease

11%

EXPECTATIONS FOR CORE PRICING IN 2013

EXPECTATIONS FOR FUEL SURCHARGES IN 2013

Increase

29%

Stay about the same

Forecasting business prospects Increase 39% Stay about for 2013 is proving a challenge the same 51% for motor carrier executives. 66% Decrease Our latest Transportation Buy5% ing Trends Survey, completed Decrease in December and early January, found that only 37% of re10% sponding Canadian motor carrier executives expect shipment volumes to be higher in 2013 MAGNITUDE OF EXPECTED MAGNITUDE OF EXPECTED than the previous year. In comRATE INCREASES FUEL SURCHARGE INCREASES parison, 44% thought likewise a year ago. With freight volume demand expected to be slow in a sluggish recovery, the upward 44% 41% 37% push on rates may also not be as great as once assumed. While 22% 17% 17% 16% 51% of carrier executives ex6% pect to increase their core pric1-2% 2.1-2% 1- 4% 4. 2.11-6% - 4% 6. 4.1%+ -6% 6.1%+ 1-2% 2.1-2% 1- 4% 4. 2.11-6% -4% 6. 4.1%+ -6% 6.1%+ ing in 2013, the vast majority 1-2% 2.1- 4% 4.1-6% 6.1%+ 1-2% 2.1- 4% 4.1-6% 6.1%+ are forecasting increases below 5% with the average increase CONTRACT PERIOD USED MOST OFTEN calculated at 1.5%. Fuel sur< 1 year < 1 year 30% < 1 year charges are also expected to 1 year 1 year moderate considerably in 2013. 1 year 2-3 years 2-3 years 2-3 years 4-5 years 4-5 years 4-5 years 4%

48%

18%

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