ONLINE EXCLUSIVE: Challenger forges ahead in tough market

Dan Einwechter

CAMBRIDGE, Ont. — Challenger Motor Freight has been winning a lot of awards lately, including the rare achievement of Platinum status in the Canada’s 50 Best Managed Companies competition. But chairman and CEO Dan Einwechter isn’t letting the company rest on its laurels. Instead, he’s making it fit the market. That includes expansion of his Montreal terminal to facilitate significant increases in east-west traffic and “dramatic” growth in intermodal hauling.

He launched the company way back in 1975 as a one-truck operation, which had grown to 100 power units by 1985. And now Challenger sits in fifth spot on the Today’s Trucking Top 100 list, as it did in 2007, with some 1500 tractors and a trailer count of about 3500. But Einwechter says he’s not really in the trucking game any more.

“Nowadays I’m in the customer service business,” he tells, “and I happen to use trucks.”

With a full-bore logistics division, complemented by warehousing services and some 650,000 sq ft of warehouse space, Challenger has also become adept at air and sea freight-forwarding and third-party freight management. That’s in addition to the truckload, LTL, and specialized trucking operations that have been the company’s stock in trade for many years. There’s even a thriving used-truck sales business that sends well maintained company trucks to customers all around the world.

The plethora of recent awards testify to Challenger’s success in what is now a very wide-ranging enterprise.

Reaching the Platinum level in the 50 Best Managed Companies program is no small feat. It means Challenger qualified as one of Canada’s 50 best companies for the seventh consecutive year. Run by The Financial Post in concert with CIBC, Deloitte & Touche, and Queen’s University School of Business, the award is based on a rigorous and independent review that evaluates management skills and practices.

Other achievements of late include winning, for the second consecutive year, the prestigious Johnnie Walker Blue Award, given by Diageo, the largest distiller and distributor of spirits in the world. It’s presented to the overall Carrier of the Year, based on four key performance metrics: on-time pickup, on-time delivery, load tender acceptance percentage, and EDI compliance.

And then there’s the just-announced General Motors award for Best FAST Carrier Performance in 2007. Out of 18,288 shipments last year, Challenger was 98 percent-plus through the FAST lane.

“The company is still a north/south specialist,” Einwechter says, but he’s cut back on both cross-border work and automotive parts hauling in recent years. “We’ve chosen to grow the business elsewhere.”

In practice, Challenger has nearly tripled east/west traffic between central Canada and Alberta and B.C. in the last 2 years. And in Vancouver the company has been doing a lot of drayage work, and even de-stuffing containers, both of which are expected to grow, says Einwechter.

He acknowledges that the business environment is a lot less than rosy these days, and, like other carriers, he’s had to adjust to a changing market.

“Over a 24-month period up to last year we had to replace $60 million worth of business,” Einwechter says, “and we did it.” He attributes that to the depth of talent he has on staff, and to a good deal of hard work, of course.

“We’re in a freight recession,” he says flatly. “So we’re planning as if all of 2008 will be a crappy year.”

Nonetheless, he’s still hiring drivers and he’s made a commitment to buy 150 new Volvo tractors, all with I-Shift automated transmissions.

Challenger has always been a popular ‘test bed’ for new technologies, and that’s not changing. “We can really bang the miles on quickly,” Einwechter explains.

He’s about to take delivery of five new Peterbilt tractors loaded to the hilt with new gizmology, including the new Paccar MX engine designed by DAF in The Netherlands and soon to be built in North America in readiness for 2010. And he announces that fact with a certain glee in his voice.

So while he says he only happens to use trucks these days, and his business strategies prove the point, there’s a part of Mr. Einwechter that remains pure trucker. You don’t start as a one-truck operation and lose that even after 30-plus years. Nor, it’s clear, do you lose the entrepreneurial edge that got things started in the first place. – R.L.

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