Cabano Kingsway: In a Buying Mood

Cabano Kingsway president Alain Bédard is wrestling with an identity crisis more than a few Canadian for-hire fleet managers wouldn’t mind having. Last year, his company added four fleets as it cruised along the acquisition path, including the surprise purchase of St-Gerome-based Groupe Papineau, one of the biggest general-freight haulers in Quebec.

“Our thinking is that it would be appropriate to have a distinct and different identity for the ownership firm vis-à-vis the individual truck fleets, sort of like with Contrans, Vitran, or Landtran Systems,” says the amiable Bédard. He isn’t sure what the new name will be, although a decision is expected before April.

When it comes to managing Cabano Kingsway’s various divisions, however, there’s no question of identity at all: each group carries on with its own, and with considerable autonomy.

“There are a few areas where it makes sense to share resources,” Bédard reports. “For example, we implemented our own dispatch software system at Papineau, and there are purchasing, accounting, and fleet-maintenance aspects that have been impacted to some degree. The only actual change in facilities came in January when we closed the Cabano Kingsway terminals at Val-d’Or and Rouyn in northwestern Quebec, since Papineau has facilities in those towns.”

Cabano Kingsway’s last four acquisitions were Quebec-based fleets, but Bédard hints that the trend may change. “We’re now quite strong in Quebec and the Maritimes, but our market share in Ontario is too small given the size of our company,” he says. “We’re reviewing a number of files now, and I would hope that by the end of the current fiscal year we’ll be able to do something.

“I feel the Canadian trucking industry has been badly managed for years,” Bédard says, “and consolidation is the only way it can get out of the mess it’s in and achieve margins that are viable-especially in the face of so many fly-by-night little operators out there undercutting everybody in sight.”

And Cabano Kingsway’s margins are headed in the right direction. In 1998, the company showed net income of $2.02 million on revenues of $141.9 million, and its operating ratio has settled down from 102.3 in 1995 and 1996 to 95.9 last year. Sounds like chroniclers of the Cabano Kingsway story should get a fresh sheet of writing paper ready. -Mike Minnich