Canada’s Freight Transportation Industry Continues to Consolidate

It was sad to read that Meyers Transport, a Canadian motor carrier that has served the needs of shippers in Ontario for 90 years, closed its doors on January 20. Meyer’s Transport has been one of those “salt of the earth” family run businesses that has been a part of the Canadian trucking scene for almost a century. This news caused me to reflect on the changes taking place in the Canadian freight industry.

The Meyers closing comes very shortly after the news that TFI (TransForce International) had acquired National Fast Freight in late December. TFI has been consolidating Canada’s east-west intermodal business through the acquisitions of Clarke Transport, Vitran and the Quiktrax division of QuikX. It should be noted that Clarke Transport and Vitran were the product of various consolidations over the years (i.e. TNT Railfast, CSR and Cottrell Transport in the case of Clarke). While there have been a few new entrants to this segment of the industry over the past 20 years (i.e. Quiktrax, M0 Freightworks), the number of independent players has been shrinking.

If one steps back and looks at the entire LTL sector of the Canadian freight industry, it is clear how much consolidation has taken place during this period. TFI now owns TST Overland Express, Kingsway Transport, QuikX Transportation, Concord, Tripar Transportation in addition to Clarke Transport, NFF, Vitran, Quiktrax and a host of smaller players. In Western Canada, the Mullen Group has acquired the Gardewine Group, Grimshaw Trucking, the Highway 9 Group of Companies, Jay’s Transportation, the Kleysen Group and other smaller companies, each of which has LTL operations. The Manitoulin Group has also been active in acquiring LTL carriers. Over the past few years, it has purchased the LTL business of Penner International, Smooth Freight, Jomac Transport, the LTL division of Highway 13 and Ridsdale Transport.

Of course, there has been consolidation in other segments of the Canadian transportation industry. TFI made big news a few years ago, by acquiring the Contrans Group that it added to its diverse portfolio of purchased truckload carriers. More recently it acquired the truckload operations of XPO logistics. Canada’s other major transportation companies have also been active in acquiring truckload carriers. In the small parcel sector, TFI owns Canpar, Dynamex and Loomis.

There have also been some big changes in Canada’s logistics service provider industry. Radiant Logistics of Bellevue Washington purchased the Wheels Group last year and in December of 2016, Transplace of Dallas Texas acquired Lakeside Logistics. Two of Canada’s leading freight management companies are now under American ownership. Clearly there has been much consolidation in the traditional sectors of Canada’s freight industry - - - small parcel, LTL, truckload and third party logistics.

However, the entire North American transportation industry is currently going through some major changes that will likely redefine and expand the number of business segments. Ecommerce, multi-channel distribution, the internet of things, 3D printing, driverless vehicles, drone deliveries and the application of the uber model in freight transportation are likely to change the structure of the industry. Then there is the potential of the Trump Effect and the possible shift in north/south freight volumes that may occur in the days ahead.

New types of customer requirements (i.e. delivery within one hour) and new types of retail outlets (i.e. Loblaw – Shoppers Drug Mart hybrid stores) could also have profound impacts. Amazon is growing its network of warehouses and transportation capabilities throughout North America. Last mile delivery companies are sprouting up all over North America. TFI recently acquired Hazen Final Mile and World Courier Ground to bolster its operations in rush and final mile delivery. Watch for new industry segments and new companies to transform the Canadian Transportation Industry and watch for Canada’s major transportation companies to bolster their portfolio of carriers in these emerging segments so they can compete with the new players.

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