In the days before the government unlocked the regulatory shackles on trucking, a firm handshake and a trustworthy partner was all that was necessary in providing reliable service throughout North America.

Deregulation and the birth of NAFTA reduced the necessity of carrier interline partnerships, though, and fleets expanded across the border at their own leisure. Carriers began acquiring smaller fleets, bought more equipment, and hired ­additional drivers to spread their own North American footprint.

Recently, however, a few Canadian carriers — mainly LTL haulers — are coming full circle by bucking the acquisition trend and returning to partnerships with American carriers in creating service networks spanning the continent.

Calgary-based Canadian Freightways, for example, signed an agreement to create an exclusive six-carrier North American transportation network with Pitt Ohio Express, Lakeville Motor Express, Averitt Express, Land Air Express of New England, and DATS Trucking.

In Ontario, Concord Transportation and New England Motor Freight (NEMF) signed a deal that will see Concord handle NEMF’s freight headed for Canadian destinations, and vice versa — a close resemblance to old-style, pre-deregulation interlining.

“It’s basically the same, and with the development of electronics the communication has been enhanced a great deal,” says Rick Brooks, senior vice-president of sales with Concord. “All bills, invoices and documents can be viewed through either company’s system.”

MSM Transportation managing partner Mike McCarron has been observing the perceived trend for some time. The “half broker, half carrier” has spent the last few years setting up shop in the U.S. on the strength of several agreements with regional U.S. carriers.

The fine line between brokering and interlining, though, is increasingly blurred.

“It’s more or less the same. Either way, it’s about getting into these areas where it doesn’t make sense to have any trucks there. So, they give it to someone else,” he tells Today’s Trucking.

‘Call it interlining or call it brokering, the
key is partnering with people.’

“But I also think a lot more freight is moving in these informal brokering types of arrangements, where a [customer] wants to give you 25 lanes, but you can only service 18 properly. So you look for someone to take the other seven.”

Many in the industry argue this is just the beginning. The unrelenting thickness of the border and currency-exchange pressures will naturally push carriers in this direction. Furthermore, as the professional driver shortage is continually exposed by a demographic dearth in North America, carriers will inevitably pursue interlining as a backdoor way of retaining drivers whose top priority these days is getting home more often.

Some describe the movement as a sort of hub-and-spoke renaissance, without having to ante up your own capital for the kind of manpower, infrastructure, and real estate that’s essential for that kind of operation.

As one CEO of a large U.S. LTL outfit recently quipped: “Who’s going to invest millions in infrastructure to make four cents on the dollar?”

The point isn’t lost on Brooks: “To acquire land in the northeast is especially expensive,” he says. “[NEMF] had terminals where we also operate in Chicago — a natural change point — and they were looking for the same thing.

“As people try and provide a North American service option to their customers, I’d say they would have to partner. With the U.S. dollar, it’s more expensive to operate in Canada than it was 20 years ago.”

McCarron has little doubt that eventually interlining will turn into a conscious strategy to combat issues like the driver shortage. But for now, he says it’s more about surviving in an extremely competitive market.

“A lot of people are starting to realize that you have to be able to compete North America-wise, or even globally, in order to still be relevant. The days are over when you’d go to a guy and say ‘I only want your east-west freight, or just these certain states.’ There’s a lot less common carriers out there than there used to be.”

As cross border costs grow more carriers
will try their hand at interlining.

Taking Your Turn?

Like many industries, trucking is a copycat business. Undoubtedly more carriers will try their hand at interlining. Some who find stable partnerships will succeed, but many others won’t because they’ll be doing it for the wrong reasons, guesses McCarron.

“It can’t be just about price and lowering costs. It’s about growing your business by providing long-term solutions for [customers]. The biggest mistake I see is when a carrier gets some extra loads and they try to broker them for a couple hundred less than what they’d haul it for. That’s when things fall apart. And we prey on that,” McCarron says, explaining that MSM’s strategy is to go directly after some lower-end competing freight brokers the carrier doesn’t work with, because “they’re the weakest link in the supply chain right now.”

“Call it interlining or call it brokering, the key is partnering with people, and making commitments. You cannot properly partner with people on price. When you win by price, you’ll eventually lose on price.”

Not everything lasts forever, though. You didn’t have to predict that Mike Jackson’s and Lisa Marie’s marriage wasn’t really for keeps to know that things in life — and more so in business — can change rather quickly.

So what happens when economic conditions shift and your carrier partner who was there today is suddenly gone tomorrow? “Well, obviously you have to find someone else,” says McCarron plainly. But that isn’t so much the challenge, as is having your contingency plan understood by your customer from the start. For MSM, that means being allowed to take the time finding the right replacement, not a stopgap partner.

“I think too many people are scared to talk to their customers. We say to them up front that if something happens here, it might fall apart for a couple weeks. We’ll put it together again, but if you’re not coming back, well, that’s life. Generally, though, people are okay with that if they understand the solution.”