Truck News


Case Study (October 01, 2004)

For some trucking firms, the road to successful growth is through diversification: moving beyond the comfort of a core business to take advantage of new opportunities. Two Amigos, based in Winnipeg, follows that path. Founded 12 years ago by Larry...

For some trucking firms, the road to successful growth is through diversification: moving beyond the comfort of a core business to take advantage of new opportunities. Two Amigos, based in Winnipeg, follows that path. Founded 12 years ago by Larry Calen with a one-ton pickup, the company has grown into a diversified moving and hauling company now running a mixed fleet of 40 trucks with 75 employees in three divisions with offices in Calgary and Edmonton.

According to Doug Creighton, who joined Calen 9 years ago as a partner in the Calgary office, “we slowly but surely branched out. Our philosophy has been to never put too many eggs in one basket.

“Larry started it all,” Creighton notes. “He was doing local deliveries in a one-ton. Then he took over a contract with The Brick Furniture Warehouse.” That contract provided a shot in the arm for the company to expand. “Then we opened up another office in another city and things grew from there,” Creighton says.

While the contract with The Brick was the “bread and butter” in the early days, the company has now diversified with three divisions. Moving into areas where they saw opportunities such as household moving and storage and cross-border logistics services.

“We have local contract delivery,” Creighton says. “We deliver things like new furniture and appliances to homes. We also have local moving and storage, of course.” Then there’s a long-distance household moving and storage division that operates across Canada and the US. Rounding out its operations is a logistics division that delivers store fixtures and new products to various points in the US and then hauls general freight back into Canada.

“We got into that when we were asked to deliver some store fixtures from Winnipeg to various locations in the US,” Creighton says. “So we leased a couple of trucks and started dabbling in that. One thing led to another and that’s going strong right now.”

Contract hauling, which was the company’s foundation, now accounts for just 30% of Two Amigos’ business. Long-distance moving accounts for another 30% while local moving and storage and freight hauling contribute 20% each.

Providing the horsepower for this growth is a fleet of Kenworths: T300 5-ton straight trucks and T600 and T800 highway tractors on five- to six-year full-service leases from CTS Lease & Rental, the local PacLease location in Winnipeg. The trucks delivering for The Brick Furniture Warehouse wear the Brick logos and paint schemes while the other vehicles carry the Two Amigos logo.

The company was introduced to leasing when it had an opportunity to expand its business. About six years ago, Two Amigos took over the local delivery contract in Winnipeg for La-Z-Boy Furniture Gallery. La-Z-Boy had a truck on lease with CTS. “When Two Amigos took over the contract for La-Z-Boy, they asked me if they could take over that lease,” says Kerry Davies, CTS lease manager. “We made an agreement and from that one truck, they found out what full service leasing is all about. Since then, I’d say nearly every truck they’ve put into service has been through us.”

“We were buying our trucks at the time,” Creighton says. “But that was becoming a pain.” The company was buying used 5-ton trucks of various makes and keeping them for two or three years. But maintenance and other factors made running their own trucks more trouble than it was worth and distracted them from running and growing their business. “One thing led to another, it was more frustrating than it was practical so we switched to full-service leases. Now, we always have nice, shiny trucks and we don’t have to worry about maintenance.”

The company stuck with CTS because “Kerry Davies was persistent and the service was great,” Creighton says. Two Amigos currently runs 15 T300 straight trucks and 13 tractors, 10 of which are T600s or T800s.

The major benefits to leasing, according to Creighton: “No worries. You pay your bill once a month and you don’t worry about service, you don’t worry about tires and after a while you don’t worry about driver retention either because the drivers are driving a quality vehicle. That’s a big part of it.”

Drivers running the long-distance runs especially appreciate the quality of the service the trucks receive. “They’re driving a brand-new vehicle with roadside coverage,” Creighton says. “They know that the gears are always working, the clutch has been adjusted, the truck is clean, that’s a big draw for drivers.”

CTS handles regularly scheduled maintenance based on the size of the truck, the weight it’s pulling and the number of miles it runs, Davies says. “We assign a maintenance schedule depending upon those factors then we send out a reminder letter and a reminder phone call and they bring them in. Same with mandatory safety inspections every six months.”

Roadside service is handled through PacLease’s PacCentral Emergency Roadside Service program. Plus, each truck comes with home and cell phone numbers for Davies and the leasing company’s service manager. “In some cases, say if they break down 20 miles out of town, it’s better for them to phone us,” Davies says. “Plus, our phone here in the office is answered 24/7, so we’ve got them covered in case of a roadside problem.”

Besides the maintenance issues, another big benefit of a full service lease is that it allows operators to better control their costs. “A full service lease makes their headaches go away,” Davies says. “They have controlled costs. They can do their transportation budget out to five years if they are on a full-service lease and be pretty much dead-on to the penny. All the variables are taken out except for the driver and fuel.”

Creighton agrees. “We know what the costs are, so budgeting is generally pretty easy.”

Creighton says the company will remain a leasing customer for the foreseeable future. “The local side has bought two or three trucks, but for our company trucks, at least 90% of them will be leased.

Branching out into new opportunities slowly, but steadily has been a successful formula for Two Amigos. Leasing has made managing their trucks easier and allowed them to focus on the opportunities ahead.

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