Motortruck Fleet Executive January/February 2010

Motortruck

Fleet Executive C A N A D A ’ S

B U S I N E S S

M A G A Z I N E

JANUARY/FEBRUARY 2010

F O R

F L E E T

O W N E R S

Our Annual look at the Nation’s Top Carriers

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contents January/February 2010

Volume 79, No. 1

COVER STORY

TOP TIER . . . . . . . . . 21 Our annual in-depth report on the capacity, capabilities and insights of the 100 largest for-hire motor carriers in Canada – and as a bonus, we throw in the Next 25 as well.

P age

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ROAD TO RECOVERY The trucking industry is in the midst of very challenging times, having taken it on the chin more than most during the recession. Carriers from across the country came together at the recent Ontario Trucking Association convention to discuss current market conditions, lessons learned and what needs to be done to get back in the driver’s seat of their operations. Here’s what they had to say.

FEATURES

16 GREEN? GROAN…

A new study finds that efforts by carriers to go green are being hampered by lack of leadership and sustainability by operations, logistics and supply chain executives.

18 TAXING TALE

A difference of interpretation on owner/operator contracts sends a trucking company on a wild ride through the courts.

Learn how to avoid having the same time-consuming (and potentially expensive) misunderstanding.

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OPEN HIGHWAY The cost of fuel, environmental laws, technology and the economy have caused an evolution in tire spec’ing. We offer some management strategies for the changing world of long-haul tire spec’ing.

DEPARTMENTS VIEWPOINT . . . . . . . . . . . . . . . . . . . . . . . .

Carriers that have survived the recession are now faced with the unique opportunity to hit the reset button when it comes to business practices. And editorial director Lou Smyrlis argues that the road to recovery begins with education.

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TAKING CARE OF BUSINESS . . . . . . . . . . . . . . . 12 Want to engage in a serious and new dialogue with your bank? Here are the top five pieces of information every transportation company should bring to the table.

COMPETITION WATCH . . . . . . . . . . . . . . . . . . . 8 Sunbury Transport merges operations with RST Industries; Contrans Income Fund puts final touches on its conversion to a corporate entity; two major Atlantic Canada carriers merge to form new company; Bison Transport adds more hardware to its trophy case; and more.

EQUIPMENT WATCH . . . . . . . . . . . . . . . . . . . 14 SAF-Holland brings editors together to promote the evolution of its “global reach, but local touch” strategy in introducing new integrated technologies.

MY HR SPACE . . . . . . . . . . . . . . . . . . . . . . 10 Looking for succession success? A formal plan will ensure an easy transition when it comes time to sell your fleet. Plus: a look at the top reasons why truck drivers quit their jobs.

INSIDE THE NUMBERS . . . . . . . . . . . . . . . . . . 38 Which transportation mode will win out in the battle for greatest pricing power upon the economic recovery?

Plus: a comprehensive look at road versus rail, including mode performance and share of transportation spend.

JANUARY/FEBRUARY 2010

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what’s on trucknews.com?

Blogs • Contributing editor James Menzies laments

the current job situation for many dump truck drivers. Is it still possible to make a decent living in the sector?

• Ray Haight of ATBS Canada urges readers not

to join the “whiny trucker” club and makes a case to keep on truckin’ in 2010.

• Are you a sucker for slogans? Managing

editor Adam Ledlow asks readers for their favourite trucking company mottos.

• Dan Goodwill of Dan Goodwill and Associates outlines the top 20 major trends poised to shape the world of freight transportation in 2010.

Web TV: Transportation Matters • INSIDE THE NUMBERS:

How has the recession affected shippers’ willingness to switch modes?

• BRRR...BIODIESEL:

CP Rail and Natural Resources Canada have partnered to test the use of biodiesel fuel in cold-weather applications.

• CULLING THE HERD:

Top transportation executives discuss the impact of the economic downturn on the future of the industry.

• BEST BLOOPERS OF 2009:

Transportation Matters celebrates the end of 2009 with a collection of bloopers from its second season.

You Said It . . .

“I will not work for a union at all. It restricts job advancement for the hard working people who deserve it. In the trucking industry it will add to the company’s deficit due to securing employment for high risk drivers. The cost of a union on a company could be enough to cause it to go bankrupt due to the loss of control to reprimand those drivers that are costly to the company. The unions will not create job security. Unions will not control your dispatch which essentially determines your paychecks.

The unions will not make the company treat you with any more respect than they do now… Say NO to trucking unions and create your own job security.”

– David Robson responding to Harry Rudolfs’ blog: To unionize or not to unionize, that is the question.

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We now TWEET! Follow us on Twitter Twitter.com/AdamLedlow Twitter.com/JamesMenzies Twitter.com/LouSmyrlis

We’re now on twitter - and we’re pretty cocky about it. twitter.com/adamledlow twitter.com/jamesmenzies twitter.com/lousmyrlis

Motortruck

Fleet Executive

is written and published for owners, managers and maintenance supervisors of those companies that operate, sell and service trucks, truck trailers and transit buses.

Viewpoint

JANUARY/FEBRUARY 2010

VOL. 79

NO. 1

Editorial Director Lou Smyrlis (416) 510-6881

lou@TransportationMedia.ca Managing Editor Adam Ledlow (416) 510-6890

Opportunity in 2010 starts with education

adam@TransportationMedia.ca Features Editor Julia Kuzeljevich (416) 510-6880

julia@TransportationMedia.ca

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elf-examination. Transition. Survival.

These are the words that come to mind as we produce our annual Top Tier report on the capacity and capabilities of the nation’s largest carriers. And one more word, which after survival is the most important: Opportunity.

It goes without saying that the Canadian truck fleet is considerably smaller today than it was at the start of the recession. Class 8 truck sales in this country hit their lowest Lou Smyrlis, point since the start of the 1990s.

MCILT Editor And ACT Research recently relou@transportationmedia.ca ported that factory shipments of commercial trailers in the US hit their lowest levels since 1978 last year. I don’t have accurate numbers for the Canadian market (too many small producers who don’t have to report their production figures), but they likely experienced a similarly significant downturn.

Yet despite all the parked trucks, all the old rigs not being replaced, and the more than 3,000 bankruptcies which have thinned out our industry in North America over the course of the recession, capacity remains a critical issue. Canadian shippers responding to our annual Transportation Buying Trends Survey (conducted in partnership with CITT and CITA) rated both TL and LTL as being in over capacity. As a result, ground transportation rates continue to drop. The Canadian General Freight Index has fallen in eight of the 10 months tabulated so far, and has declined 9.6% in aggregate. Many shippers have clearly chosen a transportation strategy geared towards reaping the cost benefits of short-term rate reductions. Even those who know better can’t ignore the breaks their competitors are getting, nor the cuts to their own supply chain budgets.

How do we get out of this mess? Despite improving numbers for our national economy, there remains a great deal of debate on whether trucking has truly hit bottom. The amount of available freight right now is certainly not making for easy predictions.

Obviously, we all hope we’re on our way out of the trough, but I wonder if trucking can hit true bottom until the banks finally pull the plug on the operators

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who remain on the ropes. In that case, we still have a ways to go and will be spending 2010 trying to find our way through what looks to be a very uneven and volatile recovery.

But as I mentioned at the start, there is opportunity in all of this. The opportunity to, as Scott Smith of J.D. Smith & Sons recently put it, “hit the reset button” when it comes to managing efficiencies, profitability, customer relations, etc. There is a whole lot of learning that needs to get done in this regard and we want to be part of it. So we are announcing several ventures this year, all designed to help fleet managers better manage the turnaround of their companies and fully reap the benefits of the recovery.

Sister publication Truck News has joined SelecTrucks of Canada and Pearson Dunn Insurance as a sponsor for the Driving for Profit seminar series, put on by NAL and KRTS. I consider this one of the best seminar series in the industry and I’m happy to be personally involved this year, hosting a session interviewing top industry executives on the industry’s most pressing issues. There are two Driving for Profit events scheduled for 2010 at the Capital Banquet Centre in Mississauga, Ont. The first has been set for April 6 and the second for Nov. 9. To register for the April event or to learn more, visit www. drivingforprofit.com.

We are also busy right now preparing the second installment of our own Profitability series of seminars, which we put on in partnership with Dan Goodwill and Associates.

The first will run May 26 and it’s going to be a day packed with information and insightful speakers. It will include an economic forecast from Scotiabank, talks on how to reignite your company’s sales engine; create an accurate freight costing model; effective real estate planning; how the packaging revolution is affecting transportation; workforce management; and rebuilding the value of your business. In addition, I will be leading panels of industry-leading carrier CEOs and top notch shippers in examining recovery strategies. See our ad on page 13 or go to trucknews.com for more information.

I would love to see you at all of these events.

The road to recovery, and opportunity, starts with education. mt @ARTICLECATEGORY:129;

Creative Director Mary Peligra

mpeligra@bizinfogroup.ca Advertising Creative Directors Carolyn Brimer Beverley Richards

Contributing Editors

Ken Mark James Menzies Ian Putzger John G. Smith Carroll McCormick Harry Rudolfs

Publisher Rob Wilkins (416) 510-5123

National Sales Manager Don Besler (416) 699-6966

Account Manager Brenda Grant (416) 494-3333

Production Manager Kim Collins (416) 510-6779

Circulation Manager Mary Garufi

Video Production Manager Brad Ling

Research Manager Laura Moffatt

Vice President Publishing Alex Papanou

President Bruce Creighton Head Office 12 Concorde Place, Suite 800 Toronto, Ont. M3C 4J2 Motortruck Fleet Executive is published 6 times a year by BIG Magazines LP, a leading Canadian information company with interests in daily and community newspapers and business-to-business information services.

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Canada’s leading TransporTaTion advisor

Scotia Capital is a trusted leader in providing timely advice to a wide range of companies in the transportation and logistics markets. Our public and private clients include TL & LTL companies, railroads, air cargo companies, intermodal operations and other 3PL companies.

We provide a full range of strategic advisory and corporate finance services, including advice on mergers and acquisitions and equity and debt financings, in both public and private capital markets. In 2009, we participated in the largest number of transportation-related deals in Canada.

To see how our solutions can work for you, please contact: Elian Terner Director, Investment Banking (416) 863-7418 elian_terner@scotiacapital.com

Our team works hard to provide clients with the market intelligence that matters and we believe that when our clients succeed, we succeed too.

At Scotia Capital, our superior insight delivers outstanding results.

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™ Trademark of The Bank of Nova Scotia. The Scotia Capital trademark is used in association with the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and its various subsidiaries in the countries where they operate.

CompetitionWatch

SUNBURY TRANSPORT is merging its operations with sister company RST INDUSTRIES in Saint John, N.B., according to local media reports. “We’re going to combine them and operate them out of McAllister Drive, which is where RST is located in Saint John,” J.D. Irving spokeswoman Mary Keith told local paper the Daily Gleaner. Local media reports indicate the move is being made to bring Sunbury closer to its customers in the industrial area of Saint John and near the port.

Two of Atlantic Canada’s top trucking and transportation companies are merging their general freight and equipment-repair facilities to form a new company, ATLANTICA DIVERSIFIED TRANSPORTATION SYSTEMS (ADTS). Effective April 1, the general freight (dry van and refrigerated operations) and equipment-repair facilities of WARREN TRANSPORT, part of The Warren Group headquartered in Rexton, N.B., and the entire operations (flatbed, van and equipment repair) of D.D. TRANSPORT, headquartered in Mount Pearl, Nfld., will merge to form the new company. ADTS’s head office will be based in Rexton, while maintaining their offices and operations in Mount Pearl and Clarenville, Nfld.; Bathurst, N.B.; and Debert and Liverpool, N.S. Warren’s Vaughn Sturgeon will serve as Atlantica’s president, while D.D.’s Gordon Peddle will serve as vice-president and chief operating officer. The new entity will have about 150 employees. Other divisions of The Warren Group – such as bulk transport and construction services – are not affected by the merger. ADTS will operate more than 300 pieces of equipment and will keep all of the affected merged Warren Transport and D.D. Transport facilities open. The merger will not result in any layoffs.

One half of this summer’s biggest acquisition deal has filed for creditor protection. St. Thomas, Ont.-based L.E. WALKER TRANSPORT, which was purchased by Guelph, Ont.-based MACKINNON TRANSPORT in August, filed a notice of intention (NOI) and entered into a creditor protection environment Dec. 8. “The company has been operating under the NOI since that time and currently continues to do so with Deloitte as the trustee,” Evan MacKinnon, president and CEO of MacKinnon Transport, told Motortruck Fleet Executive. “We are continuing negotiations with the CIBC (L.E. Walker’s bankers) and other secured creditors while reviewing the best options available to restructure the company. This action does not include any aspects of MacKinnon Transport Inc. and is limited completely to L.E. Walker Transport Limited.” The acquisition deal, announced at the end of August, created a combined entity operating out of MacKinnon’s head office in Guelph, boasting 1,300 pieces of equipment and a workforce of 420 people. At the time, the Walker Group consisted of L.E. Walker Transport and Mid America Freight Systems, both major players in the dry van and flatbed marketplaces in North America.

Oshawa-based trucking company CAN-TRUCK is winding down its operations. A Can-Truck official confirmed the closing in December. He attributed it largely to the slumping auto industry, which comprised a big portion of the carrier’s business. At the time of its closing, Can-Truck employed about 60 owner/operators. Can-Truck’s head office was in Oshawa and it operated satellite terminals in St. Catharines, Ont., Belleville, Ont. and Livonia, Mich.

BISON TRANSPORT will have to make room in its trophy case for yet another award – this time a sustainability award from the Manitoba Round Table for Sustainable Development. The award was presented at the Manitoba Excellence in Sustainability Awards. Manitoba Minister of Conservation, Bill Blaikie, presented the award to Bison Transport president and CEO Don Streuber.

The Manitoba Excellence in Sustainability Awards were set up to recognized companies that incorporate sustainable development into their everyday business practices to establish solid and lasting results, organizers say. Bison was recognized for its use of long combination vehicles (LCVs), driver fuel efficiency training and its sustainable transport strategy.

CONTRANS INCOME FUND has completed its conversion from an income trust to a corporate entity, CONTRANS GROUP INC. “Operating under a corporate structure will provide us with additional financial flexibility regarding the growth and retention of capital and better position Contrans to facilitate its future growth plans,” said Stanley Dunford, chairman and CEO.

For daily COMPETITION WATCH news go to www.trucknews.com or subscribe to our bi-weekly e-newsletter.

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m

the human edge

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succession success Formal planning will ensure an easier transition when it’s time to sell a fleet

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leet owners can decide to turn over the keys to their company for any number of reasons. Some begin to think about exit strategies after reaching a particular age or experiencing a lifechanging event such as a health scare. Others simply come up with the idea after taking time to think about what they want to do with the rest of their lives.

There is always the option of selling assets such as trucks and trailers and winding everything down, but a fleet tends to be worth more than the sum of its equipment. Value can be found in customer relationships, the goodwill in the company name and the employees who perform the work.

If a decision is made to sell the company as a whole, potential suitors could also come from a number of areas. Children who grew up around the business may be interested in carrying on the family legacy. Members of the existing management team may have their own entrepreneurial spirit. Even today’s competitors could become tomorrow’s buyer.

Every option presents its own challenges. A family member or management team, for example, may require help with the financing of the sale. “If you don’t get all your money upfront, you’re relying on someone’s good management skills to finance your retirement,” notes Peter Spratt, vice-president of Toronto East for ROCG, a consulting firm that specializes in business transitions. If the new management efforts do not work as planned, retired owners may be pulled back into the business to save their financial worth.

A formal succession plan will help to identify issues like these before they emerge, and ensure that a transition goes as smoothly as possible.

Spratt divides an initial transition strategy into four steps: An analysis of the existing business situation, with information such as a tax review, an understanding of the owner’s personal financial situation, and a review of the business itself.

A focus on personal objectives, such as family needs, the amount of money that would be needed for a desired lifestyle change, and the ultimate business legacy that the company founder wants to leave behind.

Identifying all of the different transition options, including all potential purchasers.

In addition to determining a price for the company and identify-

To find a HR Essentials workshop in your region contact:

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ing the date of an ultimate changeover, the formal transition plan will identify the attributes that a potential purchaser will need to have.

“Do we care if they take it in a different direction and sell assets?”

Spratt asks as an example, referring to an important question for an entrepreneur who is concerned about their legacy.

Before any sale is considered, company owners also need to consider steps that will help to maximize the value of the business.

“Lots of times the knowledge, the business acumen, the success of the business is directly tied to the owner. The business may not be perceived to be as valuable as if the owner was there,” Spratt explains.

It is a challenge that can be overcome by delegating authority, formalizing business systems, developing existing managers, and recruiting people who can address any existing gaps in skills.

A decision to sell the business to family members can present some unique emotional challenges as well. One sibling, for example, may have the skills needed to run the business while a second does not. What then? “We’ve seen families divide as a result of poor planning and poor communication,” Spratt says. This is why he promotes using a professional facilitator to ensure honest discussions about the sale. “Start to have some dialogue with family members about what their goals and aspirations are,” he adds. After all, they might not be interested in running the business in the first place.

In the case of a management buyout, an initial offer might need to be restricted to a couple of key managers, giving them the opportunity to decide who else should be included. A formal one-year timeline in a transition like this will also give them the chance to complete their due diligence and arrange for any financing.

Meanwhile, formal confidentiality agreements will be vital for anyone involved, to ensure that a fleet’s ongoing work is not disrupted.

“That circle has to be fairly close because there are just too many things that can go awry,” Spratt notes.

Luckily, a formal succession strategy will help to identify those risks before they emerge.

The Canadian Trucking Human Resources Council (CTHRC) is an incorporated not-for-profit organization that helps attract, train and retain workers for Canada’s trucking industry. For more information, visit www.cthrc.com.

AMTA www.amta.ca

PEI Trucking Sector Council www.peitsc.ca

Ontario Trucking Association www.ontruck.org

Trucking Human Resources Sector Council, Atlantic info@thrsc.com

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inside the numbers

Satisfaction with Skills Levels of Class 1/A Driver Employees Somewhat Dissatisfied

Very Dissatisfied

3% 8% Neither 11%

Very Satisfied 31%

Changes in Hiring Criteria by Company Type For-hire Private Criteria more stringent than before

Criteria less stringent than before

No change in criteria last 2 years

Somewhat Satisfied 48%

33.5%

27.1%

7.5%

4.3%

59.0%

68.6%

Reasons for Job/Contract Quitting by Company Type

For-hire

Private

49.9% 28.3% 29.7% 22.5% 13.9% 14.8% 13.7% 13.0% 9.4% 7.9% 23.0% 7.4%

50.2% 29.2% 24.6% 23.2% 17.9% 8.6% 6.7% 7.4% 10.5% 2.9% 21.5% 12.9%

Wanting better pay Wanting shorter hours Job did not meet expectations Changed occupations Wanting better benefits Wanting fewer long hauls Wanting different routes Border security issues Health issues Poor treatment by shippers Other Don’t know

TAKE THIS JOB AND…WHY DRIVERS QUIT THEIR JOBS

As the Canadian economy begins to recover, motor carriers will once again begin to experience the labour shortages that plagued them throughout much of the past two decades. In such a climate, retention will be of primary significance. The Canadian Trucking Human Resources Council has conducted research to better understand why truck drivers quit their jobs and if there are differences evident among the different types of fleets. When asked about three most common reasons for the quitting of Class 1/A drivers, 50% of companies overall reported truck drivers wanting better pay, while another three in 10 companies cited drivers wanting shorter hours and that the job did not meet drivers’ expectations. Those reasons were pretty well identical among for-hire and private fleets, but there are differences evident as one works their way down the list of reasons. The research conducted by CTHRC also indicates that the majority of carriers are satisfied with the skill levels of their driver employees (although more than 20% are not) and that about a third have made their hiring criteria more stringent than in years past.

Saskatchewan Trucking Association www.sasktrucking.com

British Columbia Trucking Association www.bctrucking.com

Manitoba Trucking Association www.trucking.mb.ca

Camo-route www.camo-route.com

Or Contact the Canadian Trucking Human Resources Council, info@cthrc.com or 613 244 4800 january/february 2010 11

TakingCareofBusiness

you and your banker Establishing a renewed relationship for your transportation company.

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ccording to the Canadian Bankers Association, the number of small and medium-sized companies that have approached their banks in the last year to refinance or renegotiate their borrowing facilities has risen by more than 47%.

Unfortunately, many of the Chartered Banks and other financial institutions have been less than willing to engage in discussions. Why? I interviewed a number of these midsized companies and discovered that many of them were not prepared for these discussions. Most, if not all of them, did not have the necessary information available for their clients. Since many circumstances have changed over the course of the last year, the information required can not be assumed by the borrower.

Here is what is important to your bank if you want to engage them in a serious and new dialogue: 1. Capacity The capacity of the borrower to repay is the most critical consideration in any banking relationship. The prospective lender will want to know exactly how you intend to repay the loan. The lender will consider the cash flow from the business, the timing of the repayment, and the probability of successful repayment of the loan. Payment history on existing credit relationships – personal or commercial – is considered an indicator of future payment performance.

Prospective lenders will also want to know about your contingent sources of repayment.

2. Capital Capital is the money you personally have invested in the business and is an indication of how much you have at risk should the business fail. Prospective lenders and investors will expect you to have contributed from your own assets and to have undertaken personal financial risk to establish the business before asking them to commit any funding.

3. Collateral Collateral, or guarantees, are additional forms of security you can provide the lender. Giving a lender collateral means that you pledge an asset you own, such as your home, to the lender with the agreement that it will be the repayment source in case you can’t repay the loan. A guarantee, on the other hand, is just that – someone else signs a guarantee document promising to repay the loan if you can’t. Some lenders may require such a guarantee in addition to collateral as security for a loan.

4. Conditions Establish the focus and intended purpose of the loan. Will the money be used for working capital, additional equipment, or inventory? The lender also will consider the local economic climate and conditions

Mark Borkowski is president of Mercantile Mergers and Acquisitions Corporation. Mercantile is a mid-market M&A advisory firm focused on the sale of privately-owned business.

Mark can be contacted at (416) 368-8466 ext. 232 or mark@mercantilema.com.

both within your industry and in other industries that could affect your business.

5. Character Character is the general impression you make on the potential lender or investor.

The lender will form a subjective opinion as to whether or not you are sufficiently trustworthy to repay the loan or generate a return on funds invested in your company.

Your educational background and experience in business and in your industry will be reviewed. The quality of your references and the background and experience levels of your employees also will be taken into consideration. mt @ARTICLECATEGORY:3361;

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M A X I M I Z I N G P R O F I TA B I L I T Y W O R K S H O P Toronto, May 26th 2010 - Airport Marriott

Positioning your Trucking Company for the Economic Recovery

Canadian trucking companies are recovering from the worst economic downturn in 70 years. Many truck fleets experienced a sharp turn downward in business volumes and shippers took advantage of the situation to reduce freight rates to often unsustainable levels. We are now moving to what some experts have labelled a “reset economy.” The expectation is for a slow, bumpy recovery. During this period we will see permanent, fundamental changes to how businesses will operate.

If you are looking for some proven strategies from industry leaders that may help guide you and your trucking company through this economic “reset,” mark this one day conference in your calendar. In addition to being able to learn some useful techniques and strategies, in an informal interactive setting, you will also have an opportunity to network with other fleet owners and executives.

AGENDA 7:30 AM – 8:00 AM – Registration 8:00 AM – 8:30 AM – Breakfast 8:30 AM – 9:00 AM – The Major Factors Affecting the Freight Environment in 2010-2011, Carlos Gomes, Senior Economist, Scotiabank

12:00 – 1:00 PM – Lunch 1:00 AM – 1:45 AM – Carrier/Participant Recovery Strategies - Panel led by Lou Smyrlis, Editorial Director, Transportation Media Participants: Dan Einwechter, President, Challenger Motor Freight, Peter Di Tecco, President, Armbro Transport, Doug Munro, President, Maritime-Ontario Freight Lines Limited

9:00 – 9:30 AM – Reigniting your Company’s Sales Engine, Dan Goodwill, President, Dan Goodwill & Associates Inc.

1:45 PM – 2:15 PM – Effective Workforce Management Strategies, Kevin Snobel, General Manager, Caravan Logistics

9:30 – 10:00 AM – Creating an accurate Freight Costing Model, Kenneth M. Manning, President, Transportation Costing Group Inc.

2:15 PM – 2:45 PM – You survived 2009. Now what?, Rebuilding the Value of your Trucking Business, Elian Terner, Director, Investment Banking, Scotia Capital

10:00 AM – 10:15 AM – Refreshments and Networking 10:15 AM – 10:45 AM – Real Estate Strategies for 2010, Mark Cascagnette, Vice President, Industrial Global Supply Chain Solutions, Cushman & Wakefield Ltd.

2:45 PM – 3:00 PM - Refreshments and Networking

10:45 AM – 11:15 AM – The Packaging Revolution, Jack Ampuja, President, Supply Chain Optimizers

3:00 PM – 3:30 PM – Results from Research Study on Transportation Management Software Systems for Trucking Companies, Jim Papineau, Director, Supply Chain Systems & Automation, Dan Goodwill & Associates Inc.

11:15 AM – 12:00 AM – Shipper/Participant Expectations in a Recovering Economy – Panel led by Lou Smyrlis, Editorial Director, Transportation Media

3:30 PM – 4:15 PM - Small Group Workshops Business Development – led by Dan Goodwill Freight Costing Models – led by Ken Manning

Participants: Mark Gallant, Director, Canadian Transportation, Home Depot of Canada Inc., Mike Owens, Vice President of Physical Logistics, Nestle Canada Inc., Ginnie Venslovaitis, Manager, Transportation Services, Unilever Canada and Unilever Foodsolutions

4:15 PM – 5:00 PM - Small Group Workshops Real Estate Strategies – led by Mark Cascagnette Trucking Company Computer Systems – led by Jim Papineau

Cost: $399.00 includes CD with conference material Early Bird Special Rate: $299.00 (Must book attendance by April 26th) Please go to www.trucknews.com to register!

For more information please contact Dan Goodwill at 416-932-9701

5:00 Networking/Cash Bar

S P O N S O R E D B Y:

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Fleet Executive

EquipmentWatch

SAF-Holland looking to advance evolution of integrated systems

By Lou Smyrlis Systems such as kingpins and couplings, landing gear, suspensions, bumper tubes and liftgates make up about 15% of total trailer costs.

Whether such systems are sold directly to trailer manufacturers or to fleets and owner/operators in the aftermarket, it’s a critical part of the North American trucking sector to be in, and one that has been moving towards integrated systems. Back in 2006, The Holland Group and Germany-based Otto Sauer Achsenfabrik GmbH – commonly known as SAF – merged operations with a vision to advance their position, direction and impact on the heavy-duty market, employing a strategy of “global reach, but local touch” in introducing new integrated technologies. This January, the new entity, SAF-Holland, brought magazine editors together in Warrenton, Mo. to go over its considerable progress to date towards this lofty goal. Warrenton is home to the company’s axle and suspension plant, which opened in February 2009 and marked a milestone for the company in terms of integrating new technologies and expanding its footprint in North America.

SAF-Holland’s Steffen Schewerda illustrated the company’s evolution with the example of an air suspension system. Before moving to a “systems” focus, its air suspension NS-400 offering was a basic product with the slider purchased from a competitor and no axle or braking systems offered. That evolved to the CB400 product, which had a focus on axle integration and increased system content. The axle, however, was still non-dressed and was available only with a drum brake. Significant add-ons were required: hubs, drums, slacks and brake actuator, bearings, oils and seals, tires and rims, and pneumatic control. The latest offering, the CBX40, however, shows how far the company has come in terms of axle integration and system content. The CBX40 comes with a fully dressed axle and purchasers have a choice of either drum or disc brakes. The CBX40 also has complete brake hardware and requires limited add-ons (basically the tires, rims and brake control valves).

“All the (part) interfaces are controlled by our expertise and it all works together,” said Schewerda, adding that such integration makes for improved performance and lower cost of ownership for trailer buyers.

SAF-Holland is also banking on leveraging its global experience to migrate advanced axle and braking systems into the 14

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North American market. Outside of North America, it has a manufacturing presence in Brazil, Germany, India, Japan, China, Thailand and Malaysia.

But SAF-Holland’s Sam Martin cautioned that his company has no intention of taking a “one-size-fits-all-across-the-world” approach and understands that while integrated systems is the preferred offering of the trailer industry today, OEMs still want various levels of integration and customization to meet their specific needs.

“Regional markets are regional markets. You have to pay attention to that. You can’t be successful otherwise,” he emphasized, adding that SAF-Holland is making localized investments in manufacturing facilities, such as Warrenton, around the globe. The company’s global design centres focus on the needs of regional representatives who have direct ties to customer requirements.

The 100,000-sq. ft. Warrenton plant has the capacity to produce 80,000 axles per year and is basically capable of producing an axle every three minutes. Its axle production processes are based on lean manufacturing (the plant averages about 14 inventory turns per year with customers typically receiving their orders in three weeks or faster, if necessary), with a one-piece flow process. All data is bar code driven, ensuring each part is made to the correct spec’s.

SAF-Holland holds particularly high hopes for disc brake technology.

“SAF-Holland has an installed base of over one million suspension systems with disc brakes in Europe. You get a lot of feedback from your customers and we’ve had 10 years to learn how parts work together best,” Schewerda pointed out. “We will play a key role in managing the North American transition from drum to disc brake technology.”

Although the SAF-Holland merger that is making such new product technology possible is relatively new, both companies were very mature names in the heavy-duty market in their respective sides of the Atlantic and shared similar beginnings.

Holland began in 1910 as the Safety Release Clevis Company and shifted its focus to the heavy truck industry at the start of the Second World War. SAF dates back to 1881 and the invention of the “Zill’sche two-way plough.” It transitioned into manufacturing axles for heavy-duty trucks by 1950.

The product synergies between the two companies at the time of the merger meant the two companies didn’t need to focus their initial efforts on closing redundant plants and terminating superfluous products, as is often the case with megamergers, and could concentrate on designing new technologies, said Schewerda.

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GreentoGold Lack of leadership, sustainability hamper green efforts in supply chain, study says B y

J u l i a

K u z e l j e v i c h

F

or several years now, motor carriers who have rolled out green programs have complained that while shippers may talk a good line about sustainability, it’s not truly a priority for them and they’re certainly not willing to pay for it. As Scott Smith, president of J.D. Smith & Sons recently said: “Customers have switched from sustainability plans to how much less green can they give you.”

A recent study proves motor carriers have reason to complain.

Operations, logistics and supply chain executives need a better understanding of how to go green and save green across increasingly complex, global, and multi-tiered supply and distribution networks, according to the study.

The study, released in July, called Acceleration of ECOOperation: Achieving Success & Sustainability in the Supply Chain, was put together by the Business Performance Management (BPM) Forum, which seeks to advance performance accountability and compliance in global organizations, and E2open, a provider of integrated demand-supply network solutions.

“ECO-Operation” describes a new management mantra aimed at bringing business gain to the value chain through enhanced trading partner visibility, flexibility and new levels of verifiable sustainability across the entire demand and supply ecosystem of global corporations.

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programs include more environmental responsibility, better sustainability compliance, more efficient product manufacturing, and better customer responsiveness, but 42% do not consider their carbon and energy footprint as including their entire extended supply chain, and only 55% say their customers would agree.

The study, conducted in second-quarter 2009, surveyed more than 125 supply chain, operations, finance, and executive professionals around the world across multiple industries. While 90% of supply chain and operations professionals said their management subscribes to enhanced trading partner visibility, flexibility and sustainability across the entire supply and demand chain, nearly two-thirds have marginal or no visibility across all tiers and levels of their value chain.

In fact, 78% of companies rated the level of synergy and accountability in their global trading network as sub-optimal.

A lack of leadership, visibility and standardized sustainability

GreentoGold metrics are holding companies back from achieving bottom line benefits, even while companies say their customers will continue to put more green pressure on their providers. Some 76% of respondents say their customers have not requested information on carbon and emissions containment, but two-thirds expect customers to demand this in the next year.

“We were surprised at the heightened awareness of the management buy-in to the need to become more sustainable. What’s disturbing is seeing the lack of vision, leadership, and standardized sustainable metrics,” said Derek Kober, senior vice-president and program director of the BPM Forum.

On the positive side, he noted, 85% of respondents are involved in new programs, and the second top initiative respondents are undertaking is changes to logistics and transportation practices.

However, many challenges in synchronizing supply chain operations remain. Among these are the following: • There is no single, universally accessible solution for visibility across the value chain.

• Partners are unwilling or unable to provide necessary information.

• Companies don’t have access and visibility into second- or third-tier trading partners.

• Only 20% currently use a single, hosted platform that integrates, coordinates and controls every aspect of their value chain network. (Of those that use one, 58% have seen an impact on value chain performance).

• Less than a third have a goal of carbon neutrality in supplier operations and/or customer product use. (Of those that do, 71% will achieve that goal in four years or less).

Rich Becks, senior vice-president of strategic supply-demand solutions at E2open, told Motortruck Fleet Executive that with respect to sustainability, most of the progress has been made on the operations side, specifically in the quality area, in terms of adhering to country directives, for example.

“Does the ‘C’ level understand the impact (of sustainable practices)? I think at an abstract level they do, but they are concerned about competitiveness, top line productivity, and market brand. If you can translate the value that transport and logistics brings into a strategic framework, that has more impact,” said Becks.

He added that the BPM study does a good job in terms of linking sustainability and profitability.

“What that means is that this is an opportunity for them to think about this in a new way.

“If you’re not profitable, you’re not sustainable, and you’re not competitive. Customers are asking if companies have their eyes on the things that are driving their costs, and when you’re hunting carbon dioxide and fuel in the supply chain, you’re hunting costs,” said Becks.

“From BPM Forum’s standpoint, we feel that the move to become more environmentally (sustainable) will go beyond just regulation and special environmental groups to a much more mainstream issue,” said Kober.

And if you’re going at sustainability from the idea that it and profitability are inextricably linked, then energy costs doubling in the supply chain is a huge risk you’d want to know about.

“Accuracy versus precision will be the next frontier in sustainability,” said Becks.

In terms of cracking the problem of accessing data across multiple tiers, the technology has progressed considerably, he added.

“There is technology out there that allows server-to-server participation, or Web user interface and uploading of data, and that info is used to orchestrate the end-to-end process from customer order to supplier, shipping it through the logistics process to the customer dock, through the inventory process and all the way to the end customer and to consumption. Most people are still stuck in a mindset of functions by software. There’s a loss of fidelity and timeliness that way. If we put this info into a platform that resides in the network and everyone can interact with it, visibility and collaboration go up,” he said.

Such technology, he added, is on a cost par with any TMS or WMS. “The message that I hope came across is that there is an additional area we need to consider, to holistically manage supply networks, and to organize the flow of goods around world through multiple tiers of partners working together. These are networks and you should be able to manage your carriers through a platform with a consolidated view. Some products are moving around the world several times because they’re looking for demand – we have to get a lot better managing supply and demand,” said Becks.

“Supply chain executives understand the benefits of better managing collaboration and sustainability in the value chain – now they just have to make it happen.” mt @ARTICLECATEGORY:3361;

JANUARY/FEBRUARY 2010

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A Taxing Tale A difference of interpretation on owner/operator contracts sends trucking company on a wild ride through the courts

BY JULIA KUZELJEVICH

W

hen it comes to taxes, and the collection and remittance thereof, very few companies and individuals can avoid wincing.

But for Brampton-based Maritime-Ontario Freight Lines, a well-known carrier engaged in the transportation of general freight and mail, after two years spent fighting the Canada Revenue Agency on the issue of GST remittance, wincing doesn’t even cover it.

Following a 2007 audit at MaritimeOntario’s facilities, Canada Revenue Agency brought a case forward against the company, saying that Maritime-Ontario had failed to collect the goods and services tax (GST) from independent contractors who performed services for it in relation to the transportation of goods.

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Two amounts were in question: $1,792,157 as net tax and $71,739 as a 4% penalty.

The case shed a lot of light on the issue of tax collection between trucking companies and owner/operators, and makes the need for effective and transparent contracts a salient issue.

During an appeal heard Dec. 15 and 16, 2008, and Feb. 5, 2009 in Toronto, the courts eventually ruled in favour of MaritimeOntario, reducing the net tax owed (by the total amount), and vacating the $71,739 penalty. The company was also awarded costs, but the protracted battle took two years to conclude.

Maritime-Ontario president Doug Munro shared the details of the case with Motortruck Fleet Executive, saying the issues could be of great interest to companies who may have been similarly assessed.

“We’d never been audited before. I think they came in looking for GST issues. (The auditor) satisfied himself there was no dishonesty and then he went right to the fuel. He’d write down any other names of companies we were dealing with,” he said.

“We spent approximately $250,000 on legal fees to fight the case, and ultimately won, although we were forced to pay the assessment in the interim and will now be entitled to a refund plus our costs and interest,” he said.

“Also, with the harmonized sales tax of 13% that will be implemented in 2010, transactions in the manner we structured them to be tax effective will be needed more given owner/ operator and trucking company cash flow constraints,” said Munro.

Following a trilogy of cases involving trucking companies and GST remittance and claims issues, (Vanex Truck Service Ltd. v.

The Queen, in 2001, Libra Transport (B.C.) Ltd. v. The Queen, in 2002, and Fedderly Transportation Ltd. v. The Queen, in 2000), it

is possible that the Canada Revenue Agency had heightened concerns regarding the GST and the structure of trucking company contracts with owner/operators.

The Crown took the position in these cases that the amounts charged back to owner/operators were subject to GST, so that when the trucking companies remitted the amount, they were supposed to charge the owner/operators.

The Vanex case facts come closest to Maritime-Ontario’s, with the exception being that not only were the contractual terms different, but with Vanex, the contractors actually paid the GST to Vanex, and Vanex failed to remit it to the government.

CRA’s main arguments against MaritimeOntario fell under the interline settlement rules in the Excise Tax Act, (Part 7, Schedule 6) which said that fuel was part of the interline settlement on goods or services. In 1990-91, Parliament recognized multiple ways of interaction – with interline settlement rules that the single system did not.

“When the GST came into effect in 1989/90, trucking companies said this would be a nightmare,” noted lawyer David Robertson, who argued Maritime-Ontario’s case before the courts.

“We argued that fuel was zero-rated. The CRA was trying to take a more narrow interpretation of it. They were looking at it not as one transaction, but as two. We saw it as one transaction with fuel as one of the component costs.The interline settlement provisions in the Act should have applied, as these were supportive of what we were doing,” said Munro.

“CRA was hell-bent to do it,” he added about the subsequent court battle. “It was just bureaucracy. In their mind, they were lumping it all into one category. In Vanex’s case, the government was actually out the GST. In our case, there was no tax lost. They took this as two transactions versus one.”

Profitability Back in 1990, Munro told Fleet Executive that Ernst and Young set up a billing structure for Maritime-Ontario that would handle the GST transactions in the following way: when a company paid GST on an invoice, Maritime-Ontario would bill customers the GST on the freight moved for them. Certain types of customers, i.e. interlines, were not billed. If they were owner/operators providing a service, they were exempt. When the end customer was billed, the GST was applicable.

During the court case, the argument was presented that the standard form agreement used to affect this result was “rather badly drafted,” with “a number of internal inconsistencies in the document and the nature of the relationship between Maritime-Ontario and the contractors not clearly set out.”

The intent was that the fuel purchased with credit cards be purchased by Maritime-Ontario on its own behalf and not on behalf of the contractors. The plan was that the contractors would not have to pay GST because they were not acquiring the fuel.

“When we’re buying things, we’re paying GST. If we collect five million, that’s $250,000 in GST we collect, and then we take the GST we paid out (our input credits) and we remit the net difference to the government. Any GST we pay out to bills and different accounts payable is collected. That’s how the system is designed. Any GST we pay, we ultimately get back,” said Munro.

But this was kind of the root of the problem that led to CRA’s issue, he added.

Because owner/operators are exempt and they don’t bill GST, “We designed the transaction with them so that the fuel component was part of the overall service, so we could either provide the fuel or they could.

The owner/operators would have a revenue that they would receive from us, and they would have different expenses that would be netted off and they’d receive a cheque for the net amount.

“When the government audited us in 2007, they took the position on the fuel transaction that we were reselling fuel to the owner/ operators and should have charged them GST on the so-called fuel ‘purchases.’ We said we’re not reselling, it’s a calculation that deducts fuel from revenue. We took the position that no GST was payable and that the government wasn’t out any tax. They assessed us almost two million dollars in tax. We wouldn’t have had any way to make the owner/ operators pay it to us. Some smaller trucking companies may not have the wherewithal to fight something similar,” said Munro.

Munro’s concern, and the company’s in general, was not to exacerbate a cash flow problem for the owner/operators.

“These owner/operators are having a hard time and what (CRA) is saying is, trucking companies should invoice GST on fuel consumed, but owner/operators don’t collect GST for their services, so when they want us to charge them GST on fuel that would be a cash flow loss to them. Owner/operators, on the other hand, are usually on a quarterly or annual remittance to the government. So the problem is they have to put in the input credits they have and wait for the money to come back, and they’re out the cash flow,” he added.

David Robertson, Maritime-Ontario’s legal counsel for the case, had also argued the Vanex case and so came to know both sides of the issue.

“With Vanex and Fedderley, GST became a recoverable tax, meaning that if you’ve issued fuel cards to all your owner/operators, which Vanex and Fedderley had done, the trucking companies would get the statements on a monthly basis from the fuel companies, with fuel plus

GST charges. What was happening was the trucking company was claiming the GST as an input tax credit.

“What then happened was the trucking company then turned around in the Vanex and Fedderley cases, totalled up the fuel used by owner/operators in the trucks, and in determining the amount payable to the owner/operators, they were deducting the cost of the fuel inclusive of the GST. Essentially for GST purposes, we refer to this as a double-dip,” said Robertson.

They got a receipt from the cardlock that printed out how much tax was charged, and so in that case, the government took the position that for GST purposes the fuel and any chargebacks by the company to the owner/operators is subject to GST as a “separate supply.”

“In Maritime Ontario’s circumstances, the big difference was that they were paying the fuel companies, claiming back the GST, but determining the amount payable to the owner/operators on a monthly basis. That, practically speaking, made a big difference to the court.

You didn’t have the trucking company double-dipping. The court did eventually agree that this was a single transaction of fee paid based on formula,” said Robertson.

Another key difference between Vanex and Maritime-Ontario was that in order for the owner/operator to claim tax back, there are some specific requirements in the legislation.

You need a statement that has the supplier’s GST number, you need to know the amount of GST the supplier has charged, and the invoice has to have not only the supplier’s name, but the purchaser’s. In the Vanex and Fedderley cases, they had the printout from the cardlocks, they had the amount of GST, and the fuel supplier’s GST number.

In Maritime-Ontario’s case, the printouts from the cardlocks didn’t have that information, so what was on the printouts was the card number, the fuel company and the amount/type of fuel dispensed. It had no financial info.

“We were able to point out that the owner/operators did not have the documentation necessary therefore to claim the input tax credits.

What came out in trial – though we had tried to settle this in advance – was that the auditor said that he had tried to contact 10 of the owner/

january/february 2010

19

Profitability operators, could only get a small number of those, and that one of the owner/operators was claiming the fuel.When we asked, did you reassess that owner/operator when he said he didn’t have the information, the auditor said no,” added Peterson.

“It was frustrating in the sense that we went to the CRA and said Maritime-Ontario is coming to the court with clean hands. We offered that if they vacated the $1.7 million assessment, we’d conform to the administrative policy to treat the fuel as something that should be treated as taxable supply. We asked that they walk away from the assessment because they were not out of the money.They basically rejected that because the easiest thing for the bureaucrat to do is say no,” said Robertson.

He said the ruling will create some confusion in the trucking industry, because it gives Maritime-Ontario a significant advantage to companies that are charging GST, and this will become more complicated when the HST comes into effect.

“With the HST, it just becomes that much more of a complicated issue. For the driver, cash is king. You’ve got financing costs and the more cash in pocket, the better off you are. With the introduction of HST, you will have added 13% to those deductions in determining your paycheck every four weeks. If the owner/operator is seeing tax being deducted as part of what they’re paying, it’s in their best interest to file more frequently,” noted Robertson.

While Maritime-Ontario has not changed anything with its contractor relationships, said Munro, “Under the proposed HST, we’ll have to bill a lot more of our customers, and we’ll have to bill 13% instead of 5%, and this will be more troublesome. We’ll have to pay the GST sooner

than we can collect it. In our owner/operators’ cases, a lot of trucking companies are structured where they bill the owner/operators GST or HST on fuel because of what the government’s been doing.”

Ultimately, stressed Robertson, the GST should only be cash flow for everyone involved.

“It becomes so complex when you have to go line item by line item in an owner/operator’s statement or see if this or that is subject to GST. My view of the (interline settlement) legislation was that it was designed to get out of the detail and focus in on the payment to the owner/operators. In my view, the legislation is clear and that’s the result. But CRA’s policy is the exact opposite of that, and they say that all of those factors were subject to GST,” he said.

His advice to trucking companies that want to get into the position Maritime-Ontario is in is to carefully craft their contract so that for GST purposes, it’s viewed as a single supply of freight transport services from the owner/operator to the freight transportation company, in exchange for the net amount calculated based on a formula rather than two separate transactions of “provision of driving services” and “trucking companies selling fuel and supplies to the owner/operators.”

“My recommendation to the trucking associations is, we now have four decisions and four separate results from the courts on this issue, all of them turning on different interpretations of contracts. You need a really good contract reviewed from a GST perspective. You had better make sure that when you’re deducting amounts make sure they are net of GST, not including the GST. In other words, you can’t double-dip.” mt

Cash flow is king with advent of harmonized taxes Julia Kuzeljevich Trucking companies always need to be cognizant about the rules on taxes such as the GST, but owner/operators also have a role to play in ensuring they run a proper business to keep a healthy cash flow.

“Cash flow and owner/operators; this is a huge issue,” said Ray Haight, CEO of financial service provider ATBS Canada.

“One of the first things we do at ATBS is try to educate on what cash flow is, how it’s not the enemy and it’s not nuclear science.

We have a process whereby owner/operators can figure out what their cash flow needs are on a monthly basis. Once you have it on a spreadsheet, it’s an eye opener,” said Haight.

“I encourage trucking companies to screen new owner/operators on where they need to break even. If they’re just breaking even, and they have one breakdown, they’ll probably be borrowing from the trucking companies,” he said.

In Ontario and British Columbia, the 20

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path is now clear for the implementation of the harmonized sales tax, called “long overdue” by the Ontario Trucking Association.

The federal HST bill passed by a vote of 253-37 in December, enabling the provinces to harmonize their sales taxes with the federal GST. Both Ontario and B.C. plan to combine their provincial sales taxes with the federal goods and services tax on July 1.

“Moving to harmonize the provincial sales tax (PST) and the Multi-Jurisdictional Tax (MJVT) with the GST has been a key recommendation of virtually every OTA pre-budget submission since the early 1990’s,” said OTA president David Bradley.

The Canadian Federation of Independent Businesses says harmonization will save business $100 million a year. Businesses could save a further $500-million a year on the costs of administering a single tax instead of two.

While the HST tax is zero-rated, mean-

ing it can be claimed back by owner/operators, with a higher tax rate, both trucking companies and owner/operators will need to ensure that transactions don’t create cash flow constraints.

“As far as I’m concerned, the education should happen before anyone buys a truck, with regard to the credit risk they’re taking on, the business plan and the cash flow, and being aligned with a company that will produce monthly profit and loss for them,” said Haight.

“If you think about a company driver, there is motivation to get as many miles in as possible. The owner/operator has the same motivation in terms of getting miles in, but also controls all the expenses on the trucks.

They could drive all the efficiencies out of that unit. The owner/operator has a closer relationship with the expenses of that truck, and so much opportunity to save money,” he said. mt

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Your annual in-depth report on capabilities and insights of the

O

the capacity, nation’s largest carriers.

ur fifth annual Top Tier report, offering a comprehensive look at the nation’s largest for-hire carriers, finds an industry in the midst of painful transition. The freight recession started long before the economic recession and operating in the cutthroat environment of the past year has humbled even the proudest and most progressive of motor carriers.

As you work your way through this year’s list, you will no doubt notice some familiar names no longer present. Our trucking industry hasn’t been hit as hard as the one across the border, but there have been fatalities and there will likely be more. There’s a new phrase in trucking circles these days: phantom trucking. It refers to companies who by all rights should be bankrupt but remain alive only because their equipment asset values are not worth bothering with right now. Soon as the economy starts to improve and equipment values start to rise, the banks will move more aggressively to cull the herd – there is general agreement about this within the trucking industry.

Working through the list you will also likely notice reduced equipment counts, a byproduct of the lingering freight recession. And yet our research shows that shippers still consider the TL and LTL markets in Canada to be in over capacity.

Many trucking CEOs say they’ve learned their lesson about capacity; they swear they won’t get overzealous about growing their fleets in the future, which would have clear implications on the future availability of truck service and influence rates upwards. I wonder if that will prove true, however. My impression over the past 20 years covering the transportation industry is that lessons learned during hard times start to fade as economic fortunes improve. Or as Rob Penner of Bison Transport points out, the lesson on capacity may not have been learned at all: “If we can go through the toughest period in our era and still have excess capacity, I’m not sure we have learned our lesson.”

There is also a great deal of self-examination going on about rates.

While many motor carriers point the finger at overly aggressive shippers for reducing rates to non-profitable levels, one remark from George Ledson of Cavalier Transportation made at the latest Ontario Trucking Association annual conference sticks with me. Ledson has been around longer than most trucking execs and he believes truckers should look in the mirror before pointing fingers: “We’re our own worst enemies. Why do people feel their product doesn’t need to be properly paid for?… Soon as the shipper says he can get a better rate down the street, we back off the rate.”

This is a volatile time for trucking companies. But it is also a time for opportunity. There is a culling of the herd going on right now that will make the future advantageous for those who have been willing to hit the “reset” button in the ways they handle key aspects of their business. It is our hope that the leading carriers included in this prestigious list lead the way.

To help you keep up with the latest developments, in the following pages, you will find detailed and up-to-date information about the capacity and capabilities of the 100 largest for-hire motor carriers in Canada and the Next 25. This exclusive data is from annual research conducted on behalf of our sister company, BIG Transportation Media Research.

An additional feature is a report on the fleets owned by three of the largest and most aggressive acquirers in recent years, Transforce, Contrans and Day & Ross.

And once again this year, some of the industry’s most influential executives share their insights on the current situation and the issues they will face in the future. This comprehensive guide is not intended as a mere tally of vehicle counts. In fact, we have chosen not to list the top 100 carriers by size. The top 100 carriers are listed in alphabetical order because we believe that after a certain threshold, optimum fleet size is a reflection of the different markets these fleets are meant to serve.

I would also like to thank the sponsors of our Top Tier report, Peoplenet Communications, Mack Canada and Castrol who continue with their support. Their involvement is instrumental in helping us deliver such a comprehensive report.

Lou Smyrlis Editorial Director

january/february 2009

23

Company Name Apex Motor Express Armour Transportation Systems Arnold Bros. Transport Arrow Transportation B&R Eckel’s Transport Big Freight Systems Inc. Bison Transport Inc. BLM Group Bruce R. Smith Limited Byers Transport (TransForce) Canada Cartage System Canadian Freightways (TransForce) Canpar (TransForce) Caron Transportation Systems CAT Inc. Celadon Canada Challenger Motor Freight Clarke Road Transport Inc. Clarke Transport Inc. CN TL Consolidated Fastfrate Inc. Contrans Income Fund Cooney Group of Companies Day and Ross (Day and Ross)

Headquarters

North York, ON Moncton, NB Winnipeg, MB Richmond, BC Bonnyville, AB Steinbach, MB Winnipeg, MB Kitchener, ON Simcoe, ON Edmonton, AB Toronto, ON Calgary, AB Mississauga, ON Sherwood Park, AB Coteau du Lac, QC Kitchener, ON Cambridge, ON Halifax, NS Concord, ON Concord, ON Woodbridge, ON Woodstock, ON Belleville, ON Hartland, NB Day and Ross Dedicated Logistics (Day and Ross) Brampton, ON Day and Ross Transportation Group Hartland, NB DCT Chambers Trucking Vernon, BC Erb Group of Companies New Hamburg, ON Fastrax (Day and Ross) Florenceville, NB Fluke Transportation Group Hamilton, ON Gibson Energy Ltd. Calgary, AB Grant Transport New Hamburg, ON Grégoire (TransForce) Plessisville, QC Groupe Boutin Plessisville, QC Groupe Guilbault Ltee.

Ste-Foy, QC Groupe Thibodeau (TransForce) Portneuf, QC H & R Transport Limited Lethbridge, AB hbc Logistics Mississauga, ON Highland Transport (TransForce) Markham, ON Hyndman Transport Wroxeter, ON JC Germain (TransForce) Trois-Rivieres, QC Kindersley - Siemens Transportation Group Saskatoon, SK Kingsway (TransForce) Mississauga, ON Kleysen Transport Winnipeg, MB Kriska Prescott, ON Laidlaw Carriers Van LP (Contrans) Guelph, ON Landtran Systems Inc. Edmonton, AB Mackie Moving Systems Oshawa, ON MacKinnon Transport Guelph, ON Manitoulin Transport Group Gore Bay, ON Maritime-Ontario Freight Lines Brampton, ON Meyers Transport Ltd. Belleville, ON Midland Transport Ltd. Dieppe, NB Muir’s Cartage (Calyx) Concord, ON Mullen Trucking LP Aldersyde, Alta.

Musket/Melburn Group Mississauga, ON Nesel Fast Freight Bolton, ON Normandin Transit Napierville, QC Northern Industrial Carriers Edmonton, AB Paul’s Hauling Ltd. Winnipeg, MB Penner International Steinbach, MB Purolator Courier Mississauga, ON QuikX Group of Companies Mississauga, ON Reimer Express Lines Ltd. Winnipeg, MB Robert Transport (1973) Ltd. Rougemont, QC Rosedale Transport Mississauga, ON Rosenau Transport Edmonton, AB Sameday Worldwide (Day and Ross) Mississauga, ON Schneider National Carriers Guelph, ON Seaboard Harmac North York, ON SGT 2000 St-Germain-de-Grantham, QC

Customer Line

Web Address

Operating Area

800-895-APEX 506-857-0205 800-665-8085 604.324.1333 780-826-3889 800-665-0415 800-GO-BISON 800-265-2743 888-277-6484 800-661-6953 800-268-2228 604-420-4044 905-276-3700 780-449-6688 800-363-5313 800-265-6467 800-265-6358 866-425-2753 800-387-3558 888-MOVINCN 800-268-1564 800-819-5259 613-962-6666 866-DAY-ROSS 905-799-6500 866-DAY-ROSS 250-549-2157 800-665-2653 506-392-2600 800-263-4843 403-206-4000 800-668-4481 819-362-8813 800-267-4509 800-361-2093 800-463-3875 403-328-2345 416-644-2700 800-268-1729 800-265-3071 819-370-3422 800-667-8556 800-856-5559 888-488-6878 800-461-8000 800-263-8267 780-468-4300 800-565-4646 800-265-0444 800-461-1168 905-792-6100 800-565-3708 888-MIDLAND 800-646-2013 800-661-1469 905-823-7800 800-387-1288 800-667-8780 780-465-0341 204-633-4330 866-729-7134 888-744-7123 800-461-8023 877-330-3321 800-361-8281 877-588-0057 800-371-6895 905-676-3750 800-461-3168 416-642-0515 800-363-4216

www.apexltl.com/ www.armour.ca www.arnoldbros.com www.arrowtransportation.com www.breckels.com www.bigfreight.com www.bisontransport.com www.blm.com www.brsmith.com www.byerstransport.com www.canadacartage.com www.cfmcmt.com www.canpar.com www.carontransport.ca www.cat.ca www.celadoncanada.com www.challenger.com www.clarkeroad.com www.clarkelink.com www.cn.ca www.fastfrate.com www.contrans.ca www.cooney.ca www.dayross.ca www.dayross.ca/dedicated www.dayrossgroup.com www.dctchambers.com www.erbgroup.com www.fastrax.ca www.fluke.ca www.gibsons.com www.granttransport.com www.transportgregoire.com www.boutinexpress.com www.groupeguilbault.com www.groupe-thibodeau.com www.hrtrans.com www.hbc.com www.highlandtransport.com www.hyndman.ca www.transforce.ca www.siemenstransport.com www.kingswaytransport.com www.kleysen.com www.kriska.com www.contrans.ca www.landtran.com www.mackiegroup.com www.mackinnontransport.com www.manitoulintransport.com www.m-o.com www.shipmts.com www.midlandtransport.com www.muirscartage.com www.mullentrucking.com www.musket.ca www.nesel.com www.normandintransit.com www.nictrucking.com www.paulshauling.com www.penner.ca www.purolator.ca www.quikx.com www.reimerexpress.com www.robert.ca www.rosedalegroup.com www.rosenau.org www.sameday.ca www.schneider.com www.harmactransportation.com www.sgt2000.com

Multi-Regional Multi-Regional, North America, International Multi-Regional, North America North America Multi-Regional North America North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America, International North America Multi-Regional, North America Multi-Regional, International International International North America Multi-Regional North America North America North America Multi-Regional, North America North America North America International Multi-Regional, North America Multi-Regional, North America North America North America Multi-Regional, North America North America North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America International Multi-Regional, North America Multi-Regional, North America North America North America North America Multi-Regional North America Multi-Regional, North America North America International North America North America International Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America North America Multi-regional, North America Multi-regional North America North America Multi-Regional, North America North America International North America Multi-Regional, North America, International Multi-Regional, North America Multi-Regional, North America Multi-Regional North America International North America North America, Mexico

LEGEND: THE TOP 100 were chosen according to vehicle counts which included straight trucks, tractors, trailers and intermodal containers domiciled in or controlled from Canada. Top 100 carriers are listed in alphabetical order. Both parent company and holdings shown if large enough. Companies not reporting new capacity figures for more than 2 years are removed from the list.

A capacity and capability guide for the country’s largest motor carriers Primary Service

Straight Trucks

D,LTL,TC,TL 86 D,E,F,I,L,LB,LTL,P,TC,TL 150 D,E,F,L,P,TC,TL 3 TL D,DB,E,F,I,L,LB,LTL,TC,TL 70 F,L,TL E,L,L,TC,TL D,E,F,LTL,TC,TL 0 D,F,TC,TL E,F,LTL,TL 25 D,DB,E,F,HG,L,LB,LTL,TL 374 E,F,I,L,LTL,TL 42 P 811 D,DB,F,L,LB,TL 1 D,DB,E,F,I,LTL,TC,TL,VC D,TL D,DB,E,F,I,L,LTL,TC,TL 2 D,FB,I,TL D,F,I,L,LTL,TC,TL 32 D,E,F,HG,I,L,TC,TL,VC D,E,I,LTL,P,TC,TL 35

D,DB,F,I,TL LTL,TC,TL 0 D,L 108 D,E,F,L,LTL,P,TC,TL,VC 108 D,DB,F,LB,TL D,E,L,LTL,TC,TL 150 F,I,TC,TL,VC 0 D,DB,E,F,L,LTL,TC,TL 18 DB,LB 70 D,F,L,LTL,TC,TL 1 TL D,F,I,L,LTL,TC,TL 5 D,I,L,LTL,TC,TL 3 D,E,F,HG,I,L,LTL,P,TC,TL 7 I,L,TC,TL D,I,TL DC,E,I,L,TC,TL TL TL E,F,HG,I,L,LTL,P,TC,TL 43 LTL 7 DB,F,I,L,LTL,TC,TL L,TC,TL TL D,E,F,L,LTL,TC,TL 18 D,E,HG,I,L,LTL,TL,VC 20 D,E,F,I,LTL,TL D,E,F,I,L,LB,LTL,P,TC,TL 108 D,DB,E,F,I,L,LB,LTL,TC,TL 142 D,E,L,LTL,TC,TL 11 D,E,I,LTL,P,TC,TL 100 D,DB,F,I,L,TC,TL 5 D,E,F,L,LTL,TL 0 D,I,TL E,LTL,TL 6 E, F,L,LTL,TC,TL,VC 3 D,E,I,TL D,DB,E,L,LB,TL D,E,LTL,TL D,E,LTL,TL 100 E,I,L,LTL,TL 75 D,E,LTL,TL 35 D,DB,E,F,I,L,LB,LTL,TC,TL 10 D,L,LTL,TL 50 D,DB,E,F,I,LB,LTL,P,TC,TL 50 E,HG,L,LTL,P,TC 320 D,DB,E,I,L,LB,TL D,LB 8 DB,E,F,I,L,LTL,TC,TL

Tractors 160 810 350 315 210 200 1050 125 379 158 1450 254 87 215 378 325 1500 210 310 775 221 1,167 250 1750 311 3228 280 500 300 200 600 129 284 245 360 270 650 225 225 209 182 741 300 250 400 277 267 225 300 688 381 265 789 150 153 210 200 250 150 244 375 425 550 475 1000 325 220 535 500 350 367

Trailers

Containers

324 2625 300 850 315 785 10 400 3000 200 400 1456 665 2116 913 309 500 1262 900 0 3450 300 380 120 942 375 5200 6000 763 2,228 1000 2164 354 4746 0 710 925 585 85 500 2000 435 876 650 7 1165 88 763 975 550 1400 575 522 576 1960 24 810 500 600 1200 692 395 420 740 1407 825 342 801 52 1550 175 1100 411 85 650 568 568 1200 625 800 1000 1100 200 1281 2850 1013 770 10 150 1400 200 480 1248 163

Terminals

Web

13 V 25 V, R 5 V,R,C 18 R 14 V,R 6 V,R,C 6 V, R, C 2 V 8 V 22 V,R 26 V,R,C 38 V,R,C 55 V 6 V 7 V,C 1 V,R,C 6 V,R,C 4 V,R,C 19 V,R,C 16 V, R 17 V,R,C 20 7 36 V,R,C 15 V,R,C 71 V,R,C 5 V,R 10 V, R 6 V,R,C 2 V 15 2 2 7 13 V,R,C 12 V 10 V,R,C 9 C 4 V 2 V 3 18 V 16 V,R,C 5 V,C 2 V,R,C 2 16 V,R,C 4 V,R,C 3 V,R,C 64 V,R,C 22 V,R 10 V,R,C 23 V, R, C 2 V,R,C 2 V 3 V,R,C 3 V, R, C 1 V 4 4 V,R,C 8 V, R, C 100 V, R 17 V,R,C 21 V,R,C 16 V,R,C 13 V, R 16 V,R,C 36 V,R,C 1 V, R, C 5 8 V

CODES. Operating Area: Regional – One province/state; Multi-regional – Selected provinces/states; North America – Canada, U.S.; International – Canada, U.S., Mexico/Other; Types of Service: D – Dedicated Contract; DB – Dry Bulk; E – Expedited; HG – Household Goods; I – Intermodal; L – Logistics; LB – Liquid Bulk; TL – Less than Truckload; P – Package; TC – Temperature Controlled TL – Truckload; VC – Vehicle Carrier; Web Services: Web Visibility (V); Web Reports (R); Web Custom (C); * 2008 figures ** Holding company

Company Name Headquarters Shadow Lines Transportation Group Langley, BC Simard Transport Lachine, QC SLH Transport Kingston, ON Sokil Transportation Group Edmonton, AB Speedy Transport Brampton, ON Sunbury Transport Ltd. Fredericton, NB System 55 Transport Oakville, ON Thomson Terminals Ltd. Rexdale, ON Totalline Transport (Calyx) Vaughan, ON TransForce Inc Montreal, QC TransFreight Kitchener, ON Transport Couture et fils (TransForce) Saint-Éphrem-de-Beauce, QC Transport Gregoire Plessisville, QC Transport Morneau Ste-Arsene, QC Transport Thibodeau Portneuf, QC TransX Group of Companies Winnipeg, MB Travelers Transportation Brampton, ON Trimac Transportation Services Inc. Calgary, AB TST Overland Express (TransForce) Mississauga, ON UPS Freight Mississauga, ON V.A. Inc. – Transport-Logistix Laurier Station, QC Van Kam Freightways Surrey, BC Verspeeten Cartage Ingersoll, ON Vitran Express Canada Toronto, ON Warren Gibson Alliston, ON Williams Moving and Storage Coquitlam, BC Wilson’s Truck Lines Ltd. Etobicoke, ON XTL Transport Toronto, ON Yanke Group of Companies Saskatoon, SK

The next 25 Company Name Besner (TransForce) Empire Transportation Epic Express (TransForce) Golden International (TransForce) Hercules Freight ICS Courier (TransForce) International Freight Systems Kingsway Bulk (TransForce) Laidlaw Carriers Bulk LP (Contrans) Laidlaw Carriers Flatbed LP (Contrans) Laidlaw Carriers Tank LP (Contrans) McArthur Express (TransForce) McKevitt Trucking Mill Creek Motors Muskoka Transport Papineau International (TransForce) Select / Daily (TransForce) Services Matrec (TransForce) Trans4 Logistics (TransForce) Transport Fortier Boostway Transport Herve Lemieux Tri-Line Carriers LP (Contrans) TVM Ltd. Westfreight Systems (TransForce)

Headquarters Saint-Nicolas, QC Grimsby, ON Toronto, ON Bois-des-Filion, QC North York, ON Toronto, ON Tilbury, ON Saint-Romuald, QC Woodstock, ON Hagersville, ON Woodstock, ON Cambridge, ON Thunder Bay, ON Ayr, ON Bracebridge, ON Oakville, ON Saint-Jerome, QC Montreal, QC Boucherville, QC Toronto, ON Quebec City, QC St-Laurent, QC Rocky View, AB Cottam, ON Calgary, AB

Company Name Contrans Income Fund Brookville Carriers Flatbed LP (Contrans) Cornerstone Logistics LP (Contrans) ECL Carriers LP (Contrans) Glen Tay Transportation LP (Contrans) Hopefield Trucking LP (Contrans) L. A. Dalton Systems LP (Contrans) Laidlaw Carriers Bulk LP (Contrans) Laidlaw Carriers Flatbed LP (Contrans) Laidlaw Carriers PCS LP (Contrans) Laidlaw Carriers Tank LP (Contrans) Laidlaw Carriers Van LP (Contrans) Tri-Line Carriers LP (Contrans) Tripar Transportation LP (Contrans)

Headquarters Woodstock, ON Truro, NS Oakville, ON London, ON Perth, ON Mississauga, ON Caledonia, ON Woodstock, ON Hagersville, ON Beloeil, PQ Woodstock, ON Guelph, ON Rocky View, AB Oakville, ON

P&W Intermodal / MTMX Logistics (TransForce)

Customer Line 800-663-1421 514-636-9411 800-661-2146 800-661-9923 905-455-8005 800-786-2879 800-268-5070 800-771-7487 800-565-3556 514-331-4000 859-372-5935 418-484-2104 1-800-461-8813 800-465-2727 800-463-3874 800-665-7392 800-265-8789 403-298-5100 888-878-9229 800-PICKUPS 800-363-8175 888-229-9889 800-265-6701 800-263-9588 800-461-4374 877-410-9411 416-621-9020 800-361-5576 800-667-7988

Web Address www.shadowlines.com www.simard.ca www.slh.ca www.sokil.com www.speedy.ca www.sunbury.ca www.system55.com www.thomsongroup.com www.totalline.com www.transforce.ca www.transfreight.com www.tcfl.com www.transportgregoire.com www.groupemorneau.com www.groupe-thibodeau.com www.transx.com www.travelers.ca www.trimac.com www.tstoverland.com www.ups.com www.vatransport.com www.vankam.com www.verspeeten.com www.vitran.com www.warrengibson.com www.williamsmoving.com www.wilsonlogistics.ca www.xtl.com www.yanke.ca

Operating Area North America Multi-Regional North America North America Multi-Regional North America Multi-Regional, North America Multi-Regional, North America International North America International North America Multi-Regional, North America Multi-Regional Multi-Regional, North America International North America International Multi-Regional, North America, International International Multi-Regional Multi-Regional, North America Multi-Regional, North America North America Multi-Regional, North America International Multi-Regional, North America North America North America

Customer Line Web Address Operating Area 418-831-5444 www.transforce.ca Multi-Regional, North America 800-263-0240 www.empiretrans.com Multi-Regional, North America, International 888-868-7923 www.cfmvmt.com Multi-Regional, North America 877-628-8444 www.transforce.ca North America 416-412-7855 www.herculesfreight.com North America 888-427-8729 www.ics-canada.net Multi-Regional 519-682-3544 www.international-freight.com Multi-Regional, North America 800-263-3642 www.transforce.ca North America 888-209-3867 www.contrans.ca North America 800-263-8383 www.contrans.ca North America 800-465-8265 www.contrans.ca North America 800-668-9691 www.mcarthurexpress.com Multi-Regional, North America, International 807-623-0054 www.mckevitt-trucking.com North America 800-265-7868 www.millcreek.on.ca International 800-461-5808 www.muskoka-transport.com Multi-Regional, North America 905-815-9412 www.transforce.ca Multi-Regional, North America 800-363-3666 www.transforce.ca Multi-Regional, North America 514-333-0041 www.selectdaily.ca Multi-Regional, North America 450-641-3070 www.matrec.ca Multi-Regional 905-454-1117 www.trans4.com International 888-566-6294 www.fortierboostway.com North America 514-337-2203 www.transportlemieux.com Regional 800-661-9191 www.triline.ca Multi-Regional, North America 800-749-6960 www.ramcarriers.com Multi-Regional, North America 403-279-8388 www.westfreight.com North America

Contrans – Owned companies Customer Line 800-819-5259 800-565-7554 877-388-2888 800-265-0934 x 234 800-450-9483 800-265-5430 800-363-5912 888-209-3867 800-263-8383 800-363-9412 800-465-8265 800-263-8267 800-661-9191 800-387-7210

Web Address www.contrans.ca www.brookville.ca www.cornerstonelogistics.com www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.contrans.ca www.triline.ca www.tripartrans.com

Operating Area North America North America North America North America North America North America North America North America North America North America North America North America Multi-Regional, North America North America

LEGEND: THE TOP 100 were chosen according to vehicle counts which included straight trucks, tractors, trailers and intermodal containers domiciled in or controlled from Canada. Top 100 carriers are listed in alphabetical order. Both parent company and holdings shown if large enough. Companies not reporting new capacity figures for more than 2 years are removed from the list.

Primary Service Straight Trucks D,E,I,LTL,TL I,L,LTL,TL 60 D,E,L,LTL,TL D,E,F,I,L,LTL,P,TC,TL 80 LTL,TC 61 DB,E,F,L,TC,TL D,F,L,TL 4 D,E,F,L,TC,TL 2 DB,E,F,HG,I,L,LTL,TC,TL 47 D,I,L,LTL,P,TL D,E,I,L,LTL,TL F,I,LTL,TL 3 D,E,L,LTL,TL D,LTL,TL 29 D,E,F,L,LTL,TC,TL 27 D,E,F,I,L,LTL,TC,TL 210 D,E,F, L,LTL,TC,TL 3 D,DB,I,L,LB,TC,TL D,E,I,L,LTL,P,TC,TL 15 E,I,L,LTL,P,TC,TL 2026 D,L,LTL,P,TL 10 D,E,F,HG,I,L,LTL,P,TC,TL 10 D,I,TL E,I,L,LTL,TC,TL 115 F,I,TL D,DB,E,F,HG,I,L,LTL,TL,VC 50 D,L,TC,TL D,LTL,TL. 0 D,E,I,TL

Tractors 285 275 550 150 192 302 128 250 206 6,634 210 128 256 295 406 1500 250 948 314 102 230 350 365 405 350 40 400 355 281

Trailers Containers 900 270 470 2900 580 616 741 410 800 322 12,040 2067 390 18 688 695 1045 3150 850 688 2347 980 363 820 700 800 1280 675 1400 50 300 250 794 1250 631 249

Terminals Web 6 R,C 7 V,R,C 15 V 4 V, R, C 6 V,R,C 4 V,R,C 1 C 3 V,R,C 11 V 253 12 V,R,C 2 V,R,C 3 V 14 V, R, C 14 V,R,C 12 V,R,C 5 V,C 42 V,R,C 24 V,R,C 215 V,R,C 6 V,R 7 V,C, online pickup request.

1 V,R,C 21 V,R,C 2 V 16 V,R,C 2 V 5 V,R,C 8 V,R

Primary Service Straight Trucks Tractors Trailers Containers Terminals Web TC,TL 112 311 2 D,E,F,TL 1 80 320 1 E,F,I,L,LTL,TC,TL 6 76 186 4 V,R,C F,L,TL 90 207 1 LTL,TL 35 142 261 24 V,R P 400 1 3 33 V,R,C D,E,F,TL 175 175 2 DB,LB,TL 134 284 4 TL 128 189 1 TL 109 182 2 TL 190 331 2 D,E,L,LB,LTL,TC,TL 75 350 1 V D,F,L,LTL,TC,TL 3 150 300 4 D,L,TL 100 221 1 V,R,C F,L,TL 3 140 350 2 C F,I,LB,TC 80 200 2 V,R,C L,LTL,TC,TL 75 212 1 D,E,LTL,TL 37 65 193 4 V,R,C D (waste trucks) 235 53 13 D,I,L,LTL,TC,TL 120 245 1 V D,F,L,LTL 2 95 200 2 V D,F,I,TC,TL 35 225 225 1 D,LTL,TL 102 159 2 D,E,I,L,TL 1 138 385 2 D,F,LTL,TL 2 97 157 5

Primary Service Straight Trucks Tractors Trailers Containers

1,167 2,228 TL 83 135 L TL 68 112 TL 49 101 TL 40 105 TL 44 62 TL 128 189 TL 109 182 TL 33 57 TL 190 331 TL 277 692 D, TL, LTL 102 159 TL 44 103

Terminals Web 20 1 2 1 2 1 1 1 2 1 2 2 2 2

CODES. Operating Area: Regional – One province/state; Multi-regional – Selected provinces/states; North America – Canada, U.S.; International – Canada, U.S., Mexico/Other; Types of Service: D – Dedicated Contract; DB – Dry Bulk; E – Expedited; HG – Household Goods; I – Intermodal; L – Logistics; LB – Liquid Bulk; TL – Less than Truckload; P – Package; TC – Temperature Controlled TL – Truckload; VC – Vehicle Carrier; Web Services: Web Visibility (V); Web Reports (R); Web Custom (C); * 2008 figures ** Holding company

Day & Ross Company Name Day and Ross Transportation Group Sameday Worldwide (Day and Ross) Day and Ross (Day and Ross) Fastrax (Day and Ross)

–

Owned compa

–

Owned compa

Headquarters Customer Line Web Address Operating Area Hartland, NB 866-DAY-ROSS www.dayrossgroup.com International Mississauga, ON 905-676-3750 www.sameday.ca North America Hartland, NB 866-DAY-ROSS www.dayross.ca North America Florenceville, NB 506-392-2600 www.fastrax.ca North America Day and Ross Dedicated Logistics (Day and Ross) Brampton, ON 905-799-6500 www.dayross.ca/dedicated North America Sable Warehousing and Distribution (Day and Ross) Halifax, NS 902-468-8933 Regional

Transforce Company Name

Headquarters

Customer Line

Web Address

TransForce Inc. A&M International (TransForce) ATS Retail Solutions (TransForce) Bergeron-Maybois (TransForce) Besner (TransForce) Byers Transport (TransForce) Canadian Freightways (TransForce) Canpar (TransForce) Transport Couture et fils (TransForce) D. Donnelly (TransForce) Durocher International (TransForce) Epic Express (TransForce) Excellent Specialized (TransForce) Ganeca (TransForce) GHL Transport (TransForce) Golden International (TransForce) Grégoire (TransForce) Highland Transport (TransForce) Howard’s Transport Services (TransForce) ICS Courier (TransForce) JC Germain (TransForce) Kingsway (TransForce) Kingsway Bulk (TransForce) Kos Oilfield Transportation (TransForce) Lacaille International (TransForce) Landry (TransForce) Lapalme (TransForce) Legal Freight Services (TransForce) Location Mirabel Malex (TransForce) Martrans (TransForce) McArthur Express (TransForce) McGill Air (TransForce) McMurray Serv-U Expediting (TransForce) Transport Nordique (TransForce) P&W Intermodal / MTMX Logistics (TransForce) Papineau International (TransForce) Rebel Transport (TransForce) Select / Daily (TransForce) Services Matrec (TransForce) St-Lambert (TransForce) Thibault (TransForce) Groupe Thibodeau (TransForce) TLS Trailer Leasing Services (TransForce) Trans4 Logistics (TransForce) TST Expedited Services/TST Air (TransForce) TST Overland Express (TransForce) TST Truckload Express (TransForce) Universal Contract Logistics (TransForce) UTL Transportation Services - East (TransForce) UTL Transportation Services - West (TransForce) Transport Watson (TransForce) Westfreight Systems (TransForce) Winalta (TransForce)

Montreal, QC East Angus, QC Toronto, ON Amos, QC Saint-Nicolas, QC Edmonton, AB Calgary, AB Mississauga, ON Saint-Éphrem-de-Beauce, QC Vaudreuil-Dorion, QC St-Felix-de-Kingsey, QC Toronto, ON Bois-des-Filion, QC Saint-Hyacinthe, QC Lavaltrie, QC Bois-des-Filion, QC Plessisville, QC Markham, ON Stony Plain, AB Mississauga, ON Trois-Rivieres, QC Mississauga, ON Saint-Romuald, QC Drayton Valley, AB Carignan, QC Saint-Noel, QC Granby, QC Edmonton, AB Montreal, QC Gatineau, QC Montreal, QC Cambridge, ON Montreal, QC Fort McMurray, AB Saint-Jerome, QC Oakville, ON Saint-Jerome, QC Edmonton, AB Montreal, QC Boucherville, QC Saint-Romuald, QC Sainte-Cécile-de-Milton, QC Portneuf, QC Montreal, QC Toronto, ON Windsor, ON Mississauga, ON Mississauga, ON Toronto, ON Mississauga, ON Edmonton, AB Montreal, QC Calgary, AB Edmonton, AB

514-331-4000 819-832-4936 416-679-7969 819-727-9404 418-831-5444 800-661-6953 604-420-4044 905-276-3700 418-484-2104 800-363-8762 800-267-2042 888-868-7923 450-966-4444 800-561-7444 450-586-3236 877-628-8444 819-362-8813 800-268-1729 780-968-8555 888-427-8729 819-370-3422 800-856-5559 800-263-3642 800-357-6773 800-561-0929 800-929-9285 800-871-5969 780-452-7221 514-353-2025 819-778-5237 514-595-4444 800-668-9691 514-856-7567 780-791-3530 800-363-3666 905-815-9412 800-363-3666 888-282-2423 514-333-0041 450-641-3070 888-338-3381 450-372-2399 800-463-3875 866-351-7575 905-454-1117 888-486-8911 888-878-9229 905-602-7323 877-496-9818 905-238-6855 800-663-8477 450-467-7352 403-279-8388 780-447-3521

www.transforce.ca www.transforce.ca www.ats.ca www.transforce.ca www.transforce.ca www.byerstransport.com www.cfmcmt.com www.canpar.com www.tcfl.com www.transforce.ca www.durochertransit.com www.cfmvmt.com www.transforce.ca www.ganeca.ca www.camionnageghl.com www.transforce.ca www.transportgregoire.com www.highlandtransport.com www.cfmcmt.com www.ics-canada.net www.transforce.ca www.kingswaytransport.com www.transforce.ca www.kosoilfield.com www.transforce.ca www.transforce.ca www.transforce.ca www.legalfreight.com www.transforce.ca www.malex.ca www.transforce.ca www.mcarthurexpress.com www.mcgillair.com www.mcmurrayservu.com www.transforce.ca www.transforce.ca www.transforce.ca www.rebeltransport.ca www.selectdaily.ca www.matrec.ca www.transforce.ca www.transforce.ca www.groupe-thibodeau.com www.tlsleasing.com www.trans4.com www.tst911.com www.tstoverland.com www.tsttruckloadexpress.com www.u-c-l.com www.cfmvmt.com www.cfmvmt.com www.transportwatson.com www.westfreight.com www.winaltatransport.com

Operating Area North America Multi-Regional, North America Multi-Regional Multi-Regional Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America, International North America North America Multi-Regional, North America Multi-Regional Multi-Regional, North America North America Multi-Regional, North America Multi-Regional, North America North America North America Multi-Regional, North America Multi-Regional Multi-Regional North America Multi-Regional North America Multi-Regional Multi-Regional, North America Multi-Regional Multi-Regional, North America Multi-Regional Regional Multi-Regional Multi-Regional Multi-regional, North America, International North America Multi-Regional North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional, North America Multi-Regional Multi-Regional, North America Regional Multi-Regional, North America Multi-Regional International Multi-Regional, North America, International Multi-Regional, North America, International Multi-Regional, North America Multi-Regional Multi-Regional, North America, International Multi-Regional, North America Multi-Regional, North America, International North America Multi-Regional

LEGEND: THE TOP 100 were chosen according to vehicle counts which included straight trucks, tractors, trailers and intermodal containers domiciled in or controlled from Canada. Top 100 carriers are listed in alphabetical order. Both parent company and holdings shown if large enough. Companies not reporting new capacity figures for more than 2 years are removed from the list.

anies Primary Service D,E,F,L,LTL,P,TC,TL,VC E,H,L,LTL,P,TC LTL,TC,TL F,I,TC,TL,VC D,L LTL,TL

Straight Trucks 0 320 0 0 108 1

Tractors 646 535 1750 300 311 5

Trailers Containers 1342 0 150 2164 585 85 354 8

Terminals Web 9 V,R,C 36 V,R,C 36 V,R,C 6 V,R,C 15 V,R,C 3

anies Primary Service

Straight Trucks

D,I,L,LTL,P,TL HG,L,LTL,TL E,L,LTL,P,TL 51 TL TC,TL E,F,LTL,TL 25 E,F,I,L,LTL,TC,TL 42 P 811 F,I,LTL,TL 3 DB,F,I,L,TL F E,F,I,L,LTL,TC,TL 6 F,L,TL L,LTL,TL LB 6 F,L,TL TL DC,E,I,L,TC,TL E,F,TL P 400 TL LTL 7 DB,LB,TL DC,F,TL DC,F,I,L,LTL,TL F HG,LTL,TL F,LTL,TC,TL DC DB I,TC,TL 1 DC,E,L,LB,LTL,TC,TL DC,E,LTL,TC,TL E,F,L,LTL,TC,TL 30 F,LB,TL 2 F,I,LB,TC L,LTL,TC,TL DC,E,F,TL DC,E,LTL,TL 37 DC (waste trucks) F,LTL,TL DB D,E,F,HG,I,L,LTL,P,TC,TL 7 (Equipment leasing) 1 D,I,LTL,L,TC,TL DC,E 158 DC,E,I,L,LTL,P,TC,TL 15 DC,E,TL DC,L,LB,TC 40 E,F,I,TC,TL D,DC,E,L,TL DC,E,F,HG,LTL,TL,VC DC,F,LTL,TL 2 F

Tractors 6,634 34 25 58 112 158 254 87 128 16 70 76 20 39 48 90 284 225 25 1 182 300 134 96 44 26 16 47 26 33 20 75 13 4 48 80 75 25 65 235 31 6 270 12 120 20 314 103 50 52 53 29 97 17

Trailers

Containers

Terminals

Web

12,040 253 130 1 149 14 V 126 3 311 2 665 22 V,R 913 38 V,R,C 309 55 V 390 18 2 V,R,C 42 1 150 1 R,C 186 4 V,R,C 40 1 103 1 85 1 207 1 876 2 575 4 V 41 1 3 33 V,R,C 576 3 810 16 V,R,C 284 4 148 5 103 56 1 62 1 29 1 49 2 98 2 3 2 120 1 350 1 V 20 1 2 1 100 10 2 200 2 V,R,C 212 1 46 2 193 4 V,R,C 53 13 49 1 2 1 763 12 V 1,800 3 245 1 V 22 2 V,R 980 24 V,R,C 111 2 140 9 V 89

1 103 7 130 1 157 5 39 3

CODES. Operating Area: Regional – One province/state; Multi-regional – Selected provinces/states; North America – Canada, U.S.; International – Canada, U.S., Mexico/Other; Types of Service: D – Dedicated Contract; DB – Dry Bulk; E – Expedited; HG – Household Goods; I – Intermodal; L – Logistics; LB – Liquid Bulk; TL – Less than Truckload; P – Package; TC – Temperature Controlled TL – Truckload; VC – Vehicle Carrier; Web Services: Web Visibility (V); Web Reports (R); Web Custom (C); * 2008 figures ** Holding company

long road to recovery The trucking industry is in the midst of very challenging times, having taken it on the chin more than most during the recession. At the recent Ontario Trucking Association convention, association president David Bradley brought together carriers from across the country to discuss current market conditions, lessons learned and what needs to be done to get back in the driver’s seat of their operations. Here’s what they had to say:

By Julia Kuzeljevich & Lou Smyrlis

Q: We have carriers on the panel from across Canada, from TL and LTL, large and small. Looking at the economy, have we hit bottom?

Bruno Muller, Caron Transport: It’s fair to say it has stabilized.

In Western Canada, the peaks and valleys are not as big as they were. Sales month-to-month were down as much as 42% compared to last year, but that has come up. It will take a while to get excess capacity out of the system though.

better than the commoditized general freight mess. The local construction market in the Atlantic is doing well, but forestry and mining are horrible. The rates have got to get back to covering the full cost of the service. We all know that 2 + 2 = 4 but we all seem to be willing to settle for 3. And you know, trucks are an evil thing. We should hate them. At best they are a necessary evil. We get paid to move freight around and we should do it in the most efficient way possible. To get excited and go and buy 20 trucks every time something good happens is irresponsible.

Eric Gignac, Guilbault Transport: In Quebec, TL rates are still down. LTL is feeling an increase in volume, but there are still shippers asking for rate decreases.

Q: Has the recession permanently changed the way we do business?

If so, what lessons have we learned?

Vaughn Sturgeon, Warren Transport: We probably never

Mike McCarron, MSM Transportation: If you haven’t

bottom out in the Atlantic because we never boom either. There is still a great deal of uncertainty. The volumes seem to have stabilized, but rates are still falling.

Mark Seymour, Kriska Transportation:

I think we’ve hit bottom because I can’t imagine how much further we can go. We are skimming off the bottom.

learned you wouldn’t be sitting here. What we should have learned, is how much we devalue our service to customers and how little customers know about what we do behind the scenes.

I was amazed to see how much we do for our customers behind the scenes.

Mark Seymour, Kriska Transportation:

We’ve gained efficiencies by having our back against the wall and finding cost reductions that don’t compromise safety. We’ve become more efficient than we used to be. There are things such as wage cuts that are not permanent but slowing trucks down, I doubt we will go back to the Wild West.

Mike McCarron, MSM Transportation:

I’m not sure we’ll hit bottom until the banks pull the plug on the operators who are on the ropes.

Q: We all know the devastation that has occurred in the southbound US market and the capacity that has shifted from there to the Toronto-Montreal market, for example. Scott Smith, your company is a regional carrier that does not cross either provincial or international borders all that often. What has the market been like for your company? Vaughn Sturgeon, your company is a regional carrier focusing on the Atlantic provinces along with some OntarioMaritime traffic. How is that market looking?

“I’m not sure we’ll hit bottom until the banks pull the plug on the operators who are on the ropes.”

– Mike McCarron, MSM Transportation

Scott Smith, JD Smith & Sons: There is desperation in the

local marketplace as much as anywhere else. It’s like nothing I’ve ever seen. We had legacy structures and plans. We’ve had to really look at things that we hadn’t changed for a long time. It has been a very cleansing opportunity to be able to hit a reset button.

Vaughn Sturgeon, Warren Transport: Our company does

about 30% of its business southbound. The regional market held 30

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Q: It’s quality revenue and return on investment that matter. Have we forgotten that lesson about profitability?

George Ledson, Cavalier Transportation: We’re our own worst enemies. Why do

people feel their product doesn’t need to be properly paid for? It boggles the mind. Soon as the shipper says he can get a better rate down the street, we back off the rate.

Q: During the recession, the industry continued to be plagued by excess capacity. Volume was decreasing at a faster rate than carriers could shed capacity. Is capacity now adjusting and getting tighter? What message would you like to send to the industry in terms of capacity?

Dave Pogue, E.G. Gray Transport: It’s not all about who

has the biggest fleet. If you’re lucky enough to have a mixture of equipment, it’s not as big a deal to leave some of it on the fence. If it has a certain amount of life left and rates are low, don’t be afraid to park a few trucks until things settle out. Moving into the first quarter, we are going to see volumes drop again. If you can’t fill your trucks, don’t fill them with low-paying freight. Park them.

Rob Penner, Bison Transport: If we can go through the

toughest period in our era and still have excess capacity, I’m not sure we have learned our lesson about capacity. We should have proper escape plans so we can manage capacity. You should have a plan to flex your fleet and it should not be done on the backs of owner/operators. We are seeing a lot of that being done. We have reduced our capacity by about 15% by removing fleet trucks.

into compliance zones.

Scott Smith, J.D. Smith and Sons: We’re up front in our

quotes on accessorials. We talk with our customers and focus on key performance indicators and overall performance, not just on one-off transactions. The client often views the thousand-dollar fines as insignificant. It’s not easy. We see it getting worse in terms of the retailers being illogical in some ways, i.e. expecting drivers waiting in line to run up to a gatehouse when there’s a line-up (to say that they’re backed up in line). The customers used to say phone ahead and we can avoid this. It’s getting more contentious.

Park it till the economy improves. It’s easier to park a tractor that is paid for though.

Q: Over the last few years there appears to have been a change in thinking taking place in the industry with regard to the role of enforcement and regulation. At one time, it was probably inconceivable that you would have carriers supporting such things as mandatory activation of speed limiters or a universal mandate on EOBRs (electronic on-board recorders). Why the change in thinking?

Mike McCarron, MSM Transportation:

Julie Tanguay, MacKinnon Transport:

George Ledson, Cavalier Transportation: We can’t be giving it away all the time.

There are shippers who are willing to use (lowprice) carriers till they go out of business. They may be desperate too and they don’t care.

Bruno Muller, Caron Transport: It drives

me crazy to hear this. It never gets brought up; the reason we have extra capacity is because we had finance companies willing to take risks they should not have. There were people buying trucks without putting down a nickel. I wonder if we would be in the mess we are in if the finance companies were not acting that way.

Julie Tanguay, MacKinnon Transport:

“We’ve gained efficiencies by having our back against the wall and finding cost reductions that don’t compromise safety.”

– Mark Seymour, Kriska Transportation

The reason shippers can do this is because they have no accountability. They’re not the ones risking it every day; it’s us. And it’s not going to change until we as carriers do more self-policing.

Q: One of the more objectionable things to have come along in recent years is compliance fines, usually levied on a shipper by a consignee, but which some end up trying to pass along to carriers even when there is no contractual obligation for the carrier to do so. What is your company’s position on paying these fines and what advice do you have for other carriers?

Dave Pogue, E.G. Gray Transportation: Carriers can take

a number of steps not to get fined. Pay the driver extra hours so he takes the right amount of time to get there. We also put a couple of extra keys in a box to make sure if one of the trucks doesn’t start, another one will. Our dispatchers will come in early to check driver progress when there are early appointments. If you take on customers who fine for non-compliance on deliveries, and you have satellite communications, use them. If you’ve got that backup, you may be able to get the fine reversed. Take extra steps to avoid entering into contracts with clients whose freight goes 32

motortruck

The change in thinking comes from the realization that this industry has excess capacity because of literally no barriers to entry. Those who self-police also seem to be the ones parking their trucks. The quality of the equipment on the roads is not the same you used to see a couple of years ago. The government is not going to level the playing field for us. We can’t wait for the government; we have to actively push for EOBRs to create a level playing field. We would like to think there’s enough ethics in company leadership, but we have no choice but to push this and push it as much as possible.

Brian Taylor, Liberty Linehaul: For the most

part, shippers care about price. The way we’ll differentiate ourselves is by doing other things to make efficiencies and to meet customer demand even if we can’t do it through Hours-ofService. EOBRs will force carriers to compete on a different level.

The way we would differentiate ourselves is on real service initiatives rather than on fastest time.

Rob Penner, Bison Transport: We are not getting paid for

what we do, so getting more miles in is not going to help us. EOBRs and speed limiters are cost-saving measures. Our window of opportunity to have lots of carriers behind us on these initiatives probably ebbs and flows with the economy. As a group who is trying to manage responsibly, we have to look at things that level the playing field.

Q: For some time now, environmental considerations and regulations have become much more important issues having an impact on the industry. How much do the customers at this point really care, and what would be the tangible benefits of becoming green?

Rob Penner, Bison Transport: Right now it’s just price and

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we recognize it’s just price. We have deferred most of our 2010 purchases because we can’t find shippers willing to pay us 10-15% more for our zero emissions.

Scott Smith, J.D. Smith and Sons: Our customers have

switched from sustainability plans to ‘how much less green can they give you.’ The last year has been about nothing but price. We do have someone on staff who has taken on the responsibility of taking on environmental assessments, not because shippers want it, but because it can provide cost savings – is there a benefit to us, i.e. running slower, in-house energy savings, etc.? It’s hard to have enthusiasm for that stuff when you’re living day-to-day.

Q: As you know, Ontario is now piloting the use of LCVs. Some have suggested that this means further downward pressure on freight rates – two-for-one specials, if you will. Some of you have a lot of experience with LCV operations. How do you respond to this?

Eric Gignac, Guilbault Transport: LCVs are one of the best

ways to reduce your costs, and improve your bottom line. But the savings shouldn’t automatically be passed on to the customer. I never heard a customer or carrier in Quebec, where we’ve been doing LCVs for 20 years, ask for the LCV price. What I’m hearing here in Ontario scares me. You need a shipper who gives you two truckloads at the same time at the same place with the same appointment time with legal weight. If you have that in Ontario, you’re lucky. We don’t have that in Quebec. You have savings, but you also have extra costs: permits, and paying more for the driver.

Rob Penner, Bison Transport: If you have them (LCVs) you

love them, and if you don’t, the rate situation skews your opinion.

There are lots of costs: training, monitoring, increased tractor to trailer ratios, etc. But the positive is that it’s a much more specialized market. If you are going to get into that market you have to be willing to invest and manage your business very responsibly. For our organization, if we didn’t have LCVs we probably wouldn’t have half the freight we do.

Q: Drivers have been paid on a productivity basis for most of the industry’s history. This is a reflection of the difficulties associated with monitoring a remote work force. However, with GPs and possibly EOBRs, you really can get a handle in terms of the driver’s performance. Is it time to pay drivers by the hour?

Vaughn Sturgeon, Warren Transport: If you think the driving

time. I don’t think there is any way to soften this. I believe drivers are underpaid not 5% or 10%, I think drastic numbers. And that carries through to the owner/operators. When the economy picks up, we haven’t got a chance of competing with other industries, especially when you look at Alberta and the oil situation. And there will never come a day when we have a computer driving a truck. Take it to heart; we have a problem: Our people don’t get paid enough and it’s going to hurt us big time down the road.

Brian Taylor, Liberty Linehaul: It’s the inability to properly

manage relationships with shippers that leads carriers to try to squeeze drivers. Drivers may help us manage our own capacity.

Given a chance, I think we can compete with carriers of any size by looking at that human element more and more.

Q: How do carriers get back in the driver’s seat?

Mark Seymour, Kriska Transport: You do what you have

to do if you feel it’s the right decision at the right time for your organization. We’re in a crisis, and we’ve met past crises head-on in the past with solutions: the driver shortage, HR, drugs and alcohol, and other burning issues. All of these things seem secondary now because now we’re looking at a financial crisis. Our customers continue to take because we continue to give. We give because we feel that’s right. We have to stop that. We have to stop giving.

We have given too much. We have to stop giving and start getting back. Everything we had to give has been given. We have to deal with this very aggressively, in small doses and collectively. The only people going to fix the financial crisis are those in the industry who control price. You can’t blame it on customers; customers will inevitably pay what they need to based on what the market will allow. Our quality of revenue plummeted 18% at Kriska the last 12 months. Grab a point, grab three till you start getting it back. It may take five years, but it has to start coming back. This is the hot button right now. It’s a revenue issue now, not a cost one.

All the low-hanging fruit has been taken.

Mike McCarron, MSM Transportation: We’re all desper-

ate, and we have to stop blaming everyone else. Start saying no to customers, and stop devaluing service. We have to park the trucks and walk away from deals that won’t make sense. We can’t cut any more without drastically affecting the service. We have to start taking control, and taking control of the third parties. This is the worst crisis we’ve had, but we are in the driver’s seat.

force is going to continue on without demanding changes, you are fooling yourselves. Canada is approaching 70% of its population in the current workforce. We have a demographic tsunami heading our way. We are going to need to attract new people who are not used to our pay practices. They are just not going to put up with it.

Rob Penner, Bison Transport: There’s an art in knowing

Bruno Muller, Caron Transportation: The whole discus-

of losing a piece of business, and you know you need a certain increase to have a certain type of margin, the only time it’s difficult to ask for this is if you’re trying to be greedy. If you aren’t making any money on the account, let it go. That’s the basic fundamentals of business. I have literally kicked million-dollar per year accounts out the door because they wouldn’t agree to an increase.

MT

sion in this industry is how much more can we squeeze out of the driver. We are in for a crash down the road. There’s no new blood coming into this industry If you are totally honest and account for what the driver gets paid for the total amount of hours he puts in, the guy is basically working for minimum wage most of the 34

motortruck

when to say no, and you have to always balance it. For decades, we’ve called ourselves a service industry and not a commodity.

The evidence suggests we are a commodity.

Bruno Muller, Caron Transportation: If you’re in danger

Tire Management Strategies

OPEN HIGHWAY Long-haul tire spec’ing is evolving B y

C a r r o l l

M c C o r m i c k

T

he endless highway remains endless, but the cost of fuel, environmental laws, tire technology and the economy have changed. This new order has redefined long-haul tire spec’ing.

“There have been big changes in the industry,” says John Overing, PLNA segment manager, heavy truck, with Michelin Tire. He observes that trade with Asia has increased, with more goods heading inland by rail from ports before trucks distribute them. “We are seeing more hub and spoke, a change from purely long-haul to quasi-long-haul/regional applications in Canada.

“If you are only looking at the tire mileage records and not at how the fleet operation has changed, a tire manager could overlook a change in application from, for example, purely long-haul to more regional driving,” Overing suggests.

While the Michelin XZA3 is fine for purely long-haul driving, a fleet finding itself logging more regional kilometres might want to switch to an XZE regional tire. “It is a little more scrub-resistant, which reduces wear.

The long-haul tire, if used for regional travel, will wear more quickly,” Overing says.

With their crowned roads and curves, regional highways put more stress on steering tires. Accelerated wear on shoulder areas and chipping and tearing are indicative of a change to more regional roads, as is a decrease in tire life. If you are a Bridgestone man and your regional kilometres are creeping upward, you might consider switching from the R287, more suited for line-haul applications, to the R280. This more multi-purpose tire is a good compromise between long-haul and local usage, according to Brian Rennie, director of engineering for Bridgestone Canada.

As the battle heats up to reduce greenhouse gases, so evolves the regulatory environment. For example, in 2004, the US Environmental Protection Agency launched SmartWay, which “identifies products and services that reduce transportation-related emissions,” including a recommended list of fuel-efficient tires and aerodynamic products JANUARY/FEBRUARY 2010

35

Tire Management Strategies

for trucks. This January, California became the first state to make SmartWay law for trucks.

Tire managers with trucks heading for the Golden State should arm themselves with copies of the SmartWay tire list and the relevant California Environmental Protection Agency law. In short, as of Jan. 1, all 2011 trucks with 53-ft. trailers or longer have to be spec’d with tires on the SmartWay list.

Older trucks will be captured by additional kick-in dates such as July 1, Jan. 1, 2012 and Jan. 1, 2013.

Oregon will soon adopt SmartWay as law.

Other states will likely follow. In time, it will probably become impossible to do a longhaul trip in the US without passing through a state with such laws, according to Overing.

Fuel-efficient tire talk is the rage and SmartWay helps narrow the choices. To be on its list, a tire has to give “an estimated fuel savings of 3% or greater, relative to the ‘best selling’ new tires for line-haul trucks, when used on all five axles on long-haul Class 8 trucks.” As of mid-January, the list included close to 50 steer, drive and trailer tire types by eight tire manufacturers, including wide-base tires, also known as super singles.

These magnificent tires, one of which replaces a dual pair, are typically hailed as fuel savers. Controlled track tests have yielded savings nearing 10%, although Michelin promotes fuel savings from its wide-base tires in the 4% range. In a recent test with a fleet in western Canada, it compared its XDN2 dual and X One DN2 wide-base tire. Aside from the dual/wide-base difference, the two tires are otherwise identical in tread depth, similar in tread design and have a similar rubber compound. The X One DN2 delivered 4% better fuel economy.

According to Overing, wide-base tires help tire managers wriggle out of the corner in which the California Air Resources Board (CARB) regulations have painted them: how to select a low-rolling resistance tire that also delivers the traction necessary for Canadian operations. “With the new-generation designs, we have been able to reduce rolling resistance and maintain all other aspects of the tire’s performance; for example, traction and removal mileage. The X One DN2 is 36

motortruck

the only tire on the SmartWay list that is designed for winter traction, but which also meets CARB regulations.”

Rennie has a different take on the benefits of wide-base tires, which Bridgestone sells for drive and trailer positions under its Greatec model name. “If fuel savings is your only consideration, wide-base is not the optimum choice. We have fuel-saving duals that are equal to or better than the wide-base. Casing durability, and therefore retreadability, is still better on dual tires. Wide-base is not the beall and end-all for SmartWay applications to save fuel.”

Greatec tires are more suitable for reducing weight, Rennie counsels: “If you can replace the weight, saved by the lighter wide-base tires and aluminum wheels, with revenue-earning payload, go wide, but fuel savings can be done with duals. Duals have less tread wear and less inconvenience [more availability] if a tire fails. If you are grossing out with weight, you can save weight with wide-base, but this is not an advantage in Canada outside of Ontario and Quebec.”

Rennie cautions against racing after fuel savings if driving fast is a value-added part of a fleet’s business. “A fuel-efficient tire’s advantages are decreased by about half by the overriding air resistance at higher speeds.”

Still, trucks running fuel-efficient tires at 120 km/h still burn less fuel than trucks without them.

Mississauga-based Larry Hardy is the national manager of commercial sales for OK Tire Stores. He observes that the weight of the loads a fleet hauls and the application are important considerations when spec’ing tires, and that this is a fairly complex point of discussion. “We ask clients what they will be hauling. For example, 80,000 lbs. or a heavier haul like 120,000 lbs. GVW. Are they operating 100% loaded or running empty half the time? There could be 20 to 30 applications for what they are pulling. For example, a B-train might call for a high tread-depth tire that won’t wear out that quickly on multiaxle trailers that squirm. A dry van will want a shallower tread, [possibly a] fuel-efficient tire tri-axle application tire. A lowboy will

Tire Management Strategies

want something different again.”

Rennie adds: “You could [be running] a close-spaced tandem trailer and use an R195 with an 11/32 tread depth, giving the advantage of lowrolling resistance and less irregular wear. But with a multi-axle with more spread and frequent turning at each end of a long-haul, there would be a requirement for a deeper tire and better resistance to side load scrubbing.

The R195 would not be appropriate.

I recommend the R196 with a 16/32 depth and a solid shoulder.”

He also notes that new regulations and equipment necessary to meet EnviroTruck, SmartWay and CARB requirements are pushing the loads on the front steer axle of a typical long-haul tractor closer to and beyond those recommended for standard tire size load limits at the maximum recommended speed of 120 km/h.

Consequently, tire selection requires ever more care. “Exceeding the maximum speed rating under full load can impose not only faster and more irregular wear, but also internal structural damage to a tire. Bridgestone now offers higher ply ratings on the four main steer tire sizes,” Rennie counsels.

There are new tire families to consider.

For example, Yokohama introduced its Zen Environment family of tires about a year ago.

Increased toughness, lower-rolling resistance and better control of casing shape after long service are some of this family’s features, according to Greg Cressman, director of technical services with Yokohama. “The tires are oriented to ultimate fuel efficiency and increased retreadability.”

Those who spec’ tires with a view to retreadability and cost per kilometre should take note of Yokohama’s performance guarantees: “Our Zen tires have a seven-year warranty, during which we will cover casings used on paved surfaces for as many retreads as can be put on them; our normal warranty is four years and one retread. We have also affixed a higher casing value to this tire: a $125 credit. Our other tires have lesser amounts,” Cressman explains.

Since May, Cressman adds, “We also guarantee on-the-road performance with the Zen tire line. Based on the cost per kilometre, we guarantee that our Zen tires will cost 15% less per kilometre than the last tire on your truck. If not, we will pay the difference.”

Setting and maintaining appropriate tire pressure is critical for making sure the tires

you have spec’d perform well. Tire managers will eventually have to consider tires with pressure monitoring technologies built into them. “The Tire Pressure Monitoring System (TPMS) is not that far away,” Hardy says. “I’m talking only a year or two out. You will be able to buy a tire (or rim assembly) with a TPMS chip or some sort of monitoring system.” MT

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37

inside the numbers

CTL Gui

Share of transportation budget dedicated to road and rail inside the numbers

Internal Truck External Operations Railroads 16% Share of transportation budget 16%

InsidetheNumbers dedicated to road and rail

inside the numbers

36% 36% 36%

36% That’s the percentage of transportation professionals who expect the rails to 36% retain the greatest That’s thepower percentage pricing upon of transportation the economic recovery, 36%who professionals followed by TL carriers That’s expect the railsthe to percentage (30% of respondents) of transportation retain the greatest and LTL carriers (19%), professionals pricing power upon who according to the research expect rails to the economic recovery, conducted by CITT greatest followedretain

by TLthe carriers and National power upon (30% ofpricing respondents) Bank Financial. the economic and LTL carriers (19%),recovery,

Expected shifts in share of transportation spend in 2010 for rail

Increase

22% Expected shifts in share of transportation spend in 2010 for rail

Share of transportation budget Internal dedicatedTruck to road and rail

Expected shifts in share of transportation spend in 2010 for rail No Change

External External Operations Railroads Truck Carriers 16% 16% 68% Internal Truck External Operations Railroads 16% 16%

Increase 75% 22%

No Change

No Change 75%

according to research Bank Financial. conducted Improving 22%by CITT and National Shipper perceptions on Bank Financial. railroad service performance Deteriorating 26%

Increase Expected shifts in share of 16% transportation spend in 2010 for internal truck

Expected shifts in share of No Change transportation spend in 2010 for Decrease 61% external truck 16% Increase 23%

No Change 61%

No Change 61%

Increase Decrease23% 16%

Decrease 3%

75%shifts in share of Expected transportation spend in 2010 for internal truck

External Truck Carriers 68%

followed

by TL carriers according to research (30% of respondents) conducted CITT Shipperby perceptions on and service LTL carriers (19%), andrailroad National performance

Decrease 3%

Increase 22%

External Expected shifts in share of Truck Carriers transportation 68% spend in 2010 for external truck

Expected shifts in share of Increase transportation spend in 2010 23%for external truck

Decrease 3%

Decrease 6%

Expected shifts in share of transportation spend in 2010 for Increasetruck Decrease internal 16% No Change 78%

Increase 16%

6%

Decrease 6%

No Change 78%

Decrease ROAD VERSUS RAIL: HOW DO THEY MEASURE UP? 16%

No Change Market research recently published by CITT and National Bank Financial about road and rail use among Canadian78% shippers shows that external trucking controls more than two-thirds of the modal spend.

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Tr ROAD VERSUS RAIL: HOW DO THEY MEASURE UP? various modes of transportation.

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Bank Financial thetheir business they giveNational to trucking inbelieves The research also shows thatexternal aamongst majority of various respondents 0 10 20 30 40 50 60 expect toaverage. m of transportation.

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on railroad service performance

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