The hunt for Canada's corporate elite is over and three motor carriers have made it on the list. MSM Transportation, Quik X Transportation, and the Kriska Group of Companies hold the distinction of be...
The hunt for Canada’s corporate elite is over and three motor carriers have made it on the list. MSM Transportation, Quik X Transportation, and the Kriska Group of Companies hold the distinction of being named to the list of the 50 Best Managed Private Companies in Canada, a prestigious annual award offered by the National Post, Motortruck’s sister publication, as well as CIBC and Arthur Andersen. In the following pages, key executives from each carrier share their secrets to success in exclusive interviews.
PICKING THE BEST — How it’s done
Picking the elite companies that make up the Top 50 list is as meticulous as it is meritorious. The company executives of each company are interviewed about their way of doing business. They must provide an executive summary, answer a detailed questionnaire and take a delegation of accounting consultants on a plant tour. When the delegation finishes with the executives, it investigates the employees. Next, Arthur Andersen, the Toronto-based accounting firm, sifts through the entries to look at the nature of the business, signs of growth and what sort of best practices the company has in place. The results are further narrowed and reviewed by a panel of business experts to come up with the final list of the 50 Best Managed Private Companies in Canada.
Bolton, Ont.’s MSM Transportation has been described as a sales and marketing company that just happens to be in the trucking business. And to co-owners Robert Murray and Michael McCarron, that’s just the way it ought to be.
MT: Your company revenues have grown close to 300 percent over the last five years and this is the second time you have won this prestigious award. What’s your secret to success?
McCarron: There a few things. We have a good growth plan and a sensible long-term strategy. And we have a unique sales system for this business. We are one of the few carriers to use a combination of our trucks and strategic business partners. Most trucking companies will only try to feed their own trucks. Our trucks are one part of our arsenal. Ultimately trucking is about on-time pick-up and delivery. By having our own trucks and strategic partners we can provide a fairly unique system. I certainly haven’t seen many like it in the industry. Most people are either pure freight brokers or pure trucking companies and their mandate is to fill their trucks.
MT: You now own a full complement of tractors and trailers. But you actually started out offering a freight brokerage service. What prompted you to make the investment in your own equipment?
McCarron: Seven to eight years ago we saw the gap between freight brokers and trucking companies getting closer and closer. Trucking companies were starting to get their own sales forces and own direct marketing. We felt if that continued the role of the freight broker would be totally eliminated especially with the move to technology. One thing that technology is doing is basically eliminating middlemen. Online marketplaces can now put shippers directly in touch with trucking companies. We felt we needed to get into trucks to protect our brokerage business. It also improved the perception of our company and gave us the presence we needed to get into larger accounts.
MT: So how does your freight brokerage service fit into your overall business today?
McCarron: Freight brokerage still brings in 50-55% of our revenues. Our trucks are the primary carrier. Then we have a top carrier of choice in every region which we don’t service with our trucks. They get first crack at every piece of freight. Most brokerage businesses that move the type of freight that we do would have 10-12 dispatchers. We have three. The other difference is that when we use outside carriers we always pay all our bills in 28 days and never shop freight around. You will never see MSM posting loads on websites because we don’t have to. People want to haul our freight.
MT: What has been the biggest challenge to getting MSM to where it is today?
McCarron: Getting the right people. We have grown so fast that we haven’t been able to develop all our people fast enough to promote them within so we’ve had to bring people in from the outside. We find that the skill set in the trucking industry is very weak. I tell people I’m 10 serious trucking people away from being a $100 million trucking company. If I can get the right people, with our plan and our strategy it’s a no brainer.
MT: I take it you anticipate more growth in MSM’s future?
McCarron: Oh, I think we’ve just started. We looked at the market five years ago and recognized it was getting very much commoditized. Rates were getting lower. We realized the long-term growth of this company was definitely going to be in the U.S. market. The majority of LTL freight is being handled by U.S. common carriers who really don’t have good service to Canada. Our fastest growing division is Los Angeles. We anticipate being a $100 million company in five years with the largest growth coming from the U.S. We expect moderate seven to eight percent growth in Canada and 20-25 percent growth in the U.S. We are selling ourselves as a regional carrier to Canada. We find people are using major common U.S. carriers and it’s taking them nine to 10 days from longhaul points in the U.S. to Canada. We are doing it in less than five.
MT: You’ve been described as a sales and marketing company that happens to be in the trucking business. Is that a fair statement and what is it that you do better than other carriers when it comes to marketing?
McCarron: That’s absolutely correct. We work a disciplined sales system based on relationship building. Making the change to using another carrier is work to people, so unless your sales reps are calling at an opportune time, the general response is “I’m not interested right now, call me in six months.” Ninety five percent of the sales reps won’t call in six months. The five percent that do, when they call, the person either doesn’t remember them or he’s already made a change because there was a problem four months ago, or he says I’m still happy call me again in six months. We’ve taken the process of building a relationship and input it in our system. So until that next phone call in six months we never lose touch with that potential customer. We send him a different direct mail piece every month. We have about 200 to choose from. It’s expensive but when the sales person does call in six months, what we’ve done is increase the probability that the client is going to see him for that appointment. And that’s what this business is all about. Getting in there, finding out what the client needs, and explaining the need for your service. Too many carriers send their reps out and it’s all price, price, price. If you live by the sword, you die by the sword. If you attract people using price as a sales and marketing approach the next guy who comes in and undercuts your rates is going to get the business. If you’re getting business based on an opportunity that you’ve created from improving service you’re not going to lose it on price.
MT: When you look at the issues that will impact your company over the next five years, which issues are you most enthusiastic about?
McCarron: Technology is going to allow me to make more money by helping me run my operation more efficiently. We are just in the process of going totally paperless, in fact. Customers are also going to demand more information from us and I think ultimately what’s going to happen is that in order to just be in the game you are going to need to have the (technological) bells and whistles. I’m also bullish on Canada – our economy, our people, the products we produce, and our ability to compete. And I believe that if you have a good product, you understand what you’re doing, and you have a good plan, that you can really control your own destiny.