We’ve heard people say that you’d have to be brain-dead not to be making money as a for-hire fleet owner these days. A quiet, knowing laughter follows on all sides. But in some such conversations, the laughter isn’t quite so automatic. It’s the trucking game, after all, and that means cycles up and down. Unnerving cycles.

In fact, there’s nothing frightening on the horizon. The industry is buying trucks at a record pace in an effort to keep up with growth in the economy. With barely a whiff of an economic downturn in the air, carriers seem to have little to fear but the chronic driver shortage and the inability of some trucking outfits to keep up with technology and demands for ever-higher levels of service.

Those last two points are important, especially in Canada where fleet size-and thus revenues-are significantly smaller than in the United States. As a fleet’s size decreases, it’s progressively more difficult to compete on the technology front, because that’s a mighty expensive game that depends on economies of scale. The latest trucks, the latest electronic wizardry, they’re all more expensive if you’re buying 50 instead of 1000. But, in the classic circular problem, you can’t compete if you don’t have ’em.

Similarly with service, insofar as that depends on high-tech solutions. These days, service goes far beyond the charm of a firm handshake and remembering the birthdays of your client’s kids. Ozzie and Harriet might have responded to that, but not so the distribution manager at ABC Corp. He wants an impossibly low price and then he also wants to know to the metre where his freight is at any given time. And he wants access to that information by tapping into your computer system. His kids have nothing to do with it. The lack of that capability-not to mention the inability to price your service competitively because you’re simply too small to bring those per-mile or unit costs down-is likely the main driver behind the apparent rush to sell the farm. Or buy one.

Welcome to the Canadian for-hire trucking industry, circa 1999. Sometimes it seems as if just about every medium-sized carrier out there is being groomed to look good to Cabano Kingsway, Mullen Transportation, or Contrans Corp. these days. The respective presidents of these outfits-Alain Bédard, Murray Mullen, and Stan Dunford-are all too gentlemanly to talk much about it, but they get dozens of calls a week from people wanting to sell.

The reasons are many. Maybe the company needs the resources a larger operation can provide in order to grow and be competitive, resources that go beyond mere iron into the realms of money, technology, or getting past what Dunford calls the “the brick wall” of a driver shortage. Maybe the owner sees selling out as an exit strategy. Given the cyclical nature of the business, maybe he thinks things are as good as they’ll get for a while.

Dunford hears these things all the time. “Almost without fail, the other guy’s going to lay out his five-year profit history,” he told us last fall, not long after Contrans acquired Ottawa-area general freight hauler Christie Transport. “And then he’ll explain his ups and downs, and then you’ll hear, ‘But next year is going to be really fantastic, and here’s why.’ He’ll tell you it’s because the company just upgraded its vehicles, or added satellite tracking or whatever. They all want you to sweeten the offer based on what’s going to happen in the future.

“Well, I can’t buy on the future. I have to buy what’s there today. And if those good times develop, then that upside belongs to me. I’m not going to pay for it in advance.”

The giant fleets may be growing in big ways, but others on our Top 100 list certainly are not sitting still.

Take Saskatoon’s Yanke Group, for example. It was the object of a failed purchase bid by Westminster Holdings (the Chicago-based owner of Highland Transport and Canpar) last year, and rebounded from that situation to post record profit performance in 1998 on more than $70 million in revenues.

The 1307-vehicle, mostly truckload fleet just ordered 140 new trucks and 300 new 53-foot air-ride trailers. It exited markets that weren’t viable in the long term (less-than-truckload and refrigerated freight) and expanded its more promising ocean and freight-forwarding operations into Manitoba. And Yanke announced an investment of $1.2 million to enhance driver pay.

For other carriers, the decision to expand has been dictated by the performance of key customers. Muir’s Cartage of Concord, Ont., hauls for three retailers who have seen skyrocketing growth in the past year-Home Depot, Future Shop, and Wal-Mart.

“We’ve focused on the larger, very demanding type of retail customer, and face very tight delivery deadlines, a lot of electronic data transmissions, and so on,” says general manager Mark Alden. “We’ve had to make changes to be able to keep up with them and give them what they need.” Operating almost exclusively in Ontario and Quebec, the company moved into a new 145-door facility in Concord with over 100,000 square feet of cross-dock area last year, and also bought a new computerized dispatch system.

Any investment that will make the company more efficiency is important. Like so many other fleets, what have not grown at Muir’s-at least not with its largest clients-are rates.

Aside from the inability of the big boys to buy up all the smaller guys, is there a cloud on the horizon? It seems not. The American economy-especially in car and truck production, new-home construction, and capital investment-is running strong. Our economies have always been intertwined, but never more than they are today. Inflation is low, unemployment is down, and the loonie is pegged at a rate that means booming export sales.

But what if our dollar suddenly rises in value?

Calamity, some say, former Prime Minister John Turner among them. In a recent CBC radio interview, Turner said the reason our economy is doing well is the eight-year economic expansion in the U.S. Turner is a staunch enemy of the initial Free Trade Agreement with the U.S., claiming that we never achieved free trade anyway. What the FTA (and the subsequent version that included Mexico) created, according to Turner, is no more than a dispute-resolution mechanism.

Recent trade battles over one commodity or another seem to prove his point, while demonstrating that resolving such conflicts is often beyond the ability of that mechanism to cope. It’s a compelling argument. Meanwhile, with our American neighbors thriving, our very cheap exports-including trucking services-are decidedly attractive. He asks where we would be with a dollar worth 85 cents-as it was a decade ago-instead of 66.

It’s a good question.

One has only to look at truck traffic on Hwy. 401 between Toronto and Detroit to see a big shift in the last 10 years (Ontario, incidentally, is the source or destination for 50% of Can-Am truck freight). Back in 1988, that highway was clogged with red trucks from CFI, beige trucks from J.B. Hunt, white ones from KLLM and other American carriers. That’s changed. But if the Northern dollar were to revive, who knows? That risk may or may not exist, but it hasn’t diminished the lure of cross-border freight.

Penetration of that market was a factor in both Cabano Kingsway’s purchase last year of Groupe Papineau, and freight-forwarder Clarke Inc.’s acquisition of Concord Transportation. In each case, the acquired carrier had real strength in the international market whereas the buyer did not.

That trend shows no sign of letting up, and you can count on savvy buyers like Stan Dunford to be in the middle of it all in significant ways-perhaps even before this issue even makes it off the press.

And you can count on next year’s Top 100 telling yet another new story.