DON MILLS, Ont. - Every year when the National Post, CIBC and Arthur Andersen release their list of the 50 Best Managed Private Companies, the Canadian trucking industry collects its share of kudos. T...
FABULOUS FLEETS: Kriska Holdings joins two other fleets--MSM Transportation and Quik X--among Canada's best managed companies.
DON MILLS, Ont. – Every year when the National Post, CIBC and Arthur Andersen release their list of the 50 Best Managed Private Companies, the Canadian trucking industry collects its share of kudos. This year, seven companies tied – in one way or another – to our industry are on the honor role.
Three fleets were selected to the list, including Kriska Holdings, MSM Transportation and Quik X Transportation.
As well, Fountain Tire (an independent tire dealer), Due North Communications (on contract with Goodyear), Livingston International (a customs brokerage), and Wheels Group (a supply chain specialist) were all recognized for their outstanding achievements during the past year.
Bolton, Ont.-based MSM Transportation has been described as a sales and marketing company that happens to be in the trucking industry. The company and its subsidiary, MSM America LLC, provide customers with trucking services between Canada and the U.S. with a focus on carrying and brokering LTL shipments. MSM is approaching $40-million in annual sales. MSM is privately-held with Michael McCarron and Robert Murray each owning 50 per cent. MSM America LLC is privately held by Messrs. McCarron and Murray, who each own 30 per cent, and by Tom Acklam and John Abate, each of whom owns 20 per cent.
MSM America has 40 employees and annual sales of US$7-million. The company has also expanded and entered San Francisco and Atlanta. According to MSM, this strategy allows it to control the wholesale and retail side of the Canadian trucking business there.
Quik X Transportation says it takes guts to succeed in the trucking business, and the people at Quik X Transportation, based in Mississauga, Ont., say they have guts in spades. To understand Quik X Transportation’s gutsy culture, one has to start at the beginning.
In the late 1980s, in the depths of a recession and facing an overcrowded market, many Canadian trucking firms struggled to keep their heads above water. To make matters worse, labor disputes erupted over the issue of under-loaded trucks.
Yet, in the midst of all this, a group of out-of-work executives-casualties of a trucking firm put out of business by a labor disruption-decided to start a company that would service the long-haul, expedited, less-than-truckload market. The new company, Quik X Transportation Inc., began operating in January, 1990. By the end of its first full fiscal year, it posted sales of $17-million. Today, more than a decade after its trucks first hit the road, Quik X revenues total more than $105-million.
There was a time when the Kriska Group of Companies would haul just about any freight to anywhere for anyone. Now, Prescott, Ont.-based Kriska is more focused on what it does and where it goes. That means no more haphazard routing of its trucks, fewer half-loads and shipping only to strategic locations in the U.S.
Mark Seymour, Kriska president, says deregulation of the trucking industry in the late 1980s forced the company to rethink its everything-to-everyone strategy. It has paid off, despite fierce competition.
It concentrates on the Ontario and Quebec markets in Canada and points east of the Mississippi to the south, with some limited exposure to the Gulf states. It focuses on hauling food, consumer and packaging products.
The company prides itself in having a low turnover rate among staff and a steady customer base.
“Our turnover rate with our drivers is less than 10 per cent when the industry average is in excess of 50 per cent.”
He believes part of the reason Kriska is blessed with a hard-working and positive staff is its location. Prescott, a town of 5,000 people, is located about 80 kilometres south of Ottawa.
The 1998 ice storm that crippled much of eastern Ontario and Quebec put Livingston International’s Quebec offices in the same position as many other businesses and homes in the province: In the dark and definitely in the cold.
Yet, many of Livingston’s staff continued to work, providing customs brokerage services to trucks that crossed over to Quebec from the U.S.
“We had offices that had no power in some cases for two to three weeks – they had no heat and in some cases no light,” says Peter Luit, president and chief executive officer of Livingston International, which has its headquarters in Toronto and more than 80 offices across Canada and the U.S. “But people drove their cars to work… if they had not done that, our clients would have had severe problems.”
As Canada’s largest customs broker, Livingston International moves 10,000 shipments every day between Canada and the United States. That, says Luit, is a challenge – even during the fairest of days.
Calgary’s Fountain Tire is Canada’s second-largest independent tire dealer and one of the 15 largest in North America. In 1988, it sold 49 per cent of its business to Goodyear Canada Inc.
“The main reason that we decided to partner with one supplier is that it leads to a very focused strategy; you know who your supplier will be for the long term,” says Brian Hesje, chief executive of Fountain Tire. “When we first got involved with Goodyear, it was unheard of to rely on one supplier. My experience showed me that the simpler you can make your business, the more effective it will be. For example, working with Goodyear simplifies our marketing and training. It also gives us credibility with our customers.”
Hesje, Leroy Hawtin, Laurie Maxwell, Paul Martens and Brent Hesje own 51 per cent of FT shares. “There’s certainly a risk with having a partner that is a global player with over US$15-billion in sales. Your greatest risk may be losing your culture. Goodyear’s culture is a manufacturing culture; ours is a retailing one. One way to combat this is by owning 51 per cent.”
Not many executives in the advertising business fire their own clients, but that is just what Mark Weisbarth did when one of them caused serious disruptions with outrageous demands and rude behavior.
“I’ll be damned if I’ll let one client tear my shop from the inside out,” says Weisbarth, president of Due North Communications. “Others don’t have the balls to do it, and that’s because they are not independent.”
In a business where success depends more on ideas than capital, this approach has paid off. Since its creation in 1993, Due North has built a client roster of 15 and boosted billings from $4.5-million to an estimated $48-million this year. The key is a continually reinforced company mission: to increase clients’ return on their communication investment. The 40 staff members are not hemmed in by job descriptions or restricted by departmental profit centers. They are encouraged to provide support and fill in holes across all client services, including advertising, promotions, media planning, and buying and strategic marketing consulting.
Doug Tozer goes from point A to point B without hitting a light or missing a turn, and he does so without using vehicles. His intricate knowledge of transportation logistics has gone into building Toronto-based Wheels Group, a successful non-asset-based company that is known as a specialist in innovative cost-saving supply chain management. While competitors focus on assets to build profit, Wheels has a different approach. It generates customer and new-business model solutions using people, knowledge and technology to identify gaps in the supply chain. When Wheels began in 1988, Tozer, the company’s chief executive, was its only employee.
Unencumbered by the costs that plague many traditionally structured, asset-based carriers, such as securing and servicing capital financing and driver selection and training, Tozer could focus the company’s efforts on delivering superior customer service. He has built a multimillion-dollar organization that has an average annual growth rate of 30 per cent. Its customers include Canadian Pacific and Bridgestone. n
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