During these difficult times, motor carriers throughout North America are seeking strategies to navigate through the challenges of declining volumes, excess capacity and very active price competition. Over the past year, some companies such as Bruce R. Smith have faltered and filed for credit protection while others have left the industry. Very recently MacKinnon Transport and L.E. Walker announced that they have joined forces to create synergies and lower their centre of gravity. Most trucking companies are trying to “tough it out” with a combination of revenue maintenance and cost controls.

One such company is a Quebec based trucker, Normandin Transit that has developed a comprehensive “Quebec home-made” plan to maintain its forward momentum. I recently spoke with Eric Raimondo, Vice President of Sales & Marketing, who shared with me some of his company’s initiatives. This is what he had to say.

“Normandin Transit is an asset based motor carrier with 258 Kenworth tractors and 581 trailers, dry box and reefers. We have an enviable employee retention of 95%. The company’s main niche is trans-border transportation, mostly between Quebec and Ontario, Western Canada and the USA. Normandin offers LTL and truck load service, both dry and reefer service.” This carrier’s value proposition consists of its capacity, adaptability and flexibility.

I asked Eric to articulate some of the strategies his company has employed to retain and build its base of business. He commented that “one of the things we've done was to stay very close to existing customers, contacting them daily or weekly. Another was to get our sales force to blitz the market, to expand relationships with existing 3PL’s and to open the door to new ones. Most of all, we have to be perfect, or almost perfect, by keeping the focus on superior service and performance. (We have done this) in order to not give our clients a reason to look somewhere else.

In the last 2 years, Normandin also took advantage of opportunities - - some in construction and some in real estate. We constructed a major addition to an existing terminal (50 thousand square foot warehouse and corporate offices). A few months back, we purchased our neighbour’s (a carpet manufacturer) installations and converted that space into another 50 thousand feet of warehousing capacity.”

I asked Eric to outline some of the challenges that his company has faced. “On the negative side, we did not have a choice. (We had) to bring down our rates in order to retain a portion of our client base. In some cases we understood the situation; in other cases we felt betrayed.” Eric indicated that his company had to lower some of its rates to “obsolete” levels because of “illegitimate competition.” He also mentioned that his company has tried to “maintain a respectable level of fuel surcharges.”

He noted that “on the positive side, the drop in demand pushed us to re-invent ourselves.” Eric indicated that his company found new ways of serving its customer base. This included offering ''carrier convenience'' transit times (economic deliveries) on some lanes. “We also elevated the service and promoted our expedited JIT LTL service.”

Many companies are trying to maintain an aggressive sales posture while employing a tight control on expenses. I asked Eric what Normandin has been up to in the area of cost savings. This is what he had to say.

“In some cases we had to spend and invest. For example, in order to control expenses we installed ‘’freight wings’’ wind deflectors on a part of our fleet. There should be a reasonable fuel economy resulting from this. Our tractors are limited to 105 KM per hour. This contributes to economies. We also optimized our routes.

We created a position in the Continuous Improvement sector. We now have a Director who concentrates on training drivers on such items as fuel economy and idle control. Their performance is monitored weekly.”

Eric highlighted a problem being experienced by carriers across North America, namely slow payment of invoices by shippers. “One of the challenges is in dealing with shippers that are using their economic leverage to bring down the rates, again and again. Unfortunately some carriers are on an 'artificial respiratory system.'' This serves to encourage this practice.“We have to deal with credit issues all the time, even if you do your homework and investigate potential clients through the credit channels. You still never get the realistic picture until you start collecting sums due.

The trend in our industry is 30 days. We all know that this ends up being an average of 45 days before you actually deposit the amounts. Unfortunately some shippers also have their problems and issues. When the time comes to pay the creditors and the sums are insufficient, we truckers do not have many avenues. We are a service industry and do not have a means of recouping these monies. Also, shippers will simply turn their business over to a new and eager-to-please player if we apply too much muscle on their Payables Department.”

Eric explained how this has a snowball effect. Since the shipper has given the business to another carrier, “that can makes things worse. The shipper will naturally hold even more payments in order to start fresh with the other player and show the new carrier the best picture in the first months (of that relationship).

Another example is Claims negotiations. (These are) unhealthy when, for example, a shipper owes you 5000$ and holds it while you have the same amount in unsolved and ambiguous (claims) issues. You often end up at the shallow end of the pool as you will not go through legal procedures for these less important amounts.”

I probed Eric to see how his company is dealing with this thorny issue. “On the never ending rate and fuel surcharge discount request, we deal one by one by choosing where we can accommodate and where we can’t, always taking into consideration which markets we can combine to optimize our revenues.On the (matter of) payables, we have put in place a credit card payment facility. This permits Normandin to organize a transaction within minutes of speaking to an, up until now, unknown shipper.”

To wrap up our discussion, I asked Eric how his company is performing financially and to outline his plans to keep his company on a positive track over the next twelve months. Eric mentioned that his company has been able to retain its revenue base and has maintained its profitability. Looking ahead to the future, he stated that “we will continue to work hard on sales, harder in operations and even harder in receivables. Normandin Transit intends to continue to show its great adaptability and flexibility to the market’s evolving needs.”