GIANT STEPS INTO ONTARIO: Transforce bought Highland Transport.
TORONTO, Ont. – Ontario carriers beware – there’s a new kid on the block.
TransForce Income Fund, whose network of wholly owned, independent operating subsidiaries makes it one of the largest Canadian transportation and logistics operatives, changed the face of Ontario trucking in August, with the purchase of Highland Transport.
It’s not as if buying up carriers is anything new for TransForce, which has been on a shopping spree since 1998. (It started off owning Quebec trucking concern Papineau, with 70 trucks, but since then has made 30 acquisitions in trucking and logistics).
Still, buying a major company like Highland Transport, which made $125 million in revenue last year, is a major purchase, one that TransForce president and CEO Alain Bedard readily admits signifies the company’s undeniable incursion into the Ontario market.
“If you look at TransForce today you’ll see that one of our major groups consist of truckload carriers, but that these carriers have until now mainly been based in Quebec,” said Bedard.
“With the acquisition of Highland we’ll definitely be expanding our market in Ontario.”
TransForce already owns some smaller Ontario-based carriers like TST, Bedard explained, but the company wanted something bigger. (Highland Transport’s head office is in Toronto, and it also operates facilities in Montreal, Vancouver and Moncton, and runs into the U.S.)
“For us the Highland purchase is major – our annual revenue is in the billions and theirs is in the millions, so the acquisition increases our revenues by at least a tenth. Not to mention the fact that we’re also buying the expertise of the people who work there.”
As for whether the Highland purchase will result in any major restructuring, the immediate answer is no, said Bedard. Highland will remain an independent division under its current president Norm Sneyd, he said.
“If it’s not broken we don’t fix it,” Bedard said. “But there’ll be benchmarks of course.”
Drivers can rest assured they’ll keep their jobs, Sneyd told Truck News.
“No driver will lose his job as a result of this deal,” said Sneyd. “In fact, their jobs are more secure than ever.” (Highland currently employs 750 drivers in total, about 30 of which are owner/operators.)
The history of TransForce’s dealings with other companies it has purchased would appear to bear this out, as TST employees will attest.
“The only changes have been for the better,” said one dispatcher, who preferred not to be named.
“We’ve got new equipment and gotten rid of some old equipment,” he said.
“And we share information on loads.”
Norm Sneyd said he does expect the sale to TransForce will benefit Highland.
“Are we going to overcome the driver shortage issue because of this? No. Will fuel costs go down as a result? No. But it may increase our customer base and it’s certainly an asset when it comes to purchasing power,” he said. As for sharing loads, Sneyd wasn’t aware of any immediate plans to change the way Highland runs its dispatch centre.
“Our customers have been with us for a long time, some of them for 30 years, so I don’t see that changing,” he said.
“And certainly it will only help us to be part of a network, which we weren’t before.”
The sale certainly came as no surprise to industry watchers, said Eugene Moser, chief financial officer and vice-president of Challenger Motor Freight, also headquartered in Ontario.
“We’ve known that Highland’s status was going to change for years now,” Moser said.
“The owner wasn’t a long term player in trucking.”
Moser said he doesn’t think TransForce’s incursion on the Ontario trucking scene will have much of an effect on Challenger.
“In the fall we’re expecting an increase in demand for trucking services, so quite frankly, I don’t think it will have any effect,” said Moser.
“And although there will certainly be more money and security behind Highland, it won’t limit capacity for the industry as a whole. Unless truck makers start selling trucks with drivers in their seats, the fact Highland might be able to buy more equipment won’t make any difference.”