President Dan Einwechter discusses Challenger Motor Freight’s continuing expansion plans in an exclusive interview
CT&L: This is the third year in a row you’ve been named to the prestigious list of the 50 Best Managed Companies. What do you see as the major challenges you will have to overcome for your company to stay on this list for another three years?
Einwechter: Dedication and commitment to the winning formula that got you so far. We have to maintain the “We go the Distance” attitude because there are many challenges facing our industry — insurance, hours of service, security, the driver shortage and fuel pricing. We are extremely proud of our designation as one of Canada’s 50 Best but it’s like a report card in school; it tells you how well you’ve done up to that point in time but there is pressure to continue to do well.
CT&L: Last year you expanded your operations in the Vancouver market with 15 tractors and 25 trailers to handle regional hauls from Vancouver to points in the north west U.S. with special permits to run four-axle specially-designed lightweight trailers. Business in that entire area is growing quickly. How are your operations coming along?
Einwechter: We are targeting 15% growth per year, which is the same as our growth expectations for the company overall. There has definitely been a shift in freight patterns. It used to be that there would be a higher rate going in to the west and a much lower rate coming out. That’s definitely not the case anymore. There is a preponderance of freight coming into western ports. The rails can only do so much and trucking provides the safety valve to handle the excess demand. Is the truck capacity there yet to handle all this freight? Probably not. There is still room for expansion. Challenger alone has gone from 50 drivers to over 100 drivers in that area over the last couple of years.
CT&L: You also recently grew into the garbage hauling business through the acquisition of a Toronto company. How is that coming along?
Einwechter: We’ve grown that business from 15 trucks when we bought it a year-and-a-half ago to 65 trucks today. It could easily have reached 90, but there was some uncertainty initially about the long-term willingness of Michigan State to accept waste hauls from Ontario. We have a greater sense of comfort with that now.
CT&L: I understand your warehousing operations are also growing rapidly?
Einwechter: We started off with 100,000 sq ft and now we are up to in excess of 300,000 sq ft of warehousing at different locations. We expect that will continue to grow. In today’s market our customers want a partner who is flexible in meeting their requirements. We can offer inventory management, warehousing and transportation services – all with the technology to support it.
CT&L: The market seems to be ripe for acquisitions. Are you actively looking to add to your capacity and menu of options?
Einwechter: Any acquisitions we look at have to add to and complement what we already have. We don’t want to take over operations that would require a tremendous amount of time and effort to fix. We are looking at some dedicated operations. I think the dedicated market is going to increase dramatically because of the hours of service implications and the need for shippers to guarantee access to service.
CT&L: Tell me about your plans for a new building. What’s the status and how will the new building help you better serve clients?
Einwechter: We are planning on breaking ground in June. Our maintenance facility should be up and running by the end of December and our corporate office in February. It will be a big site – 53 acres with close access to the 401. The maintenance facility footprint will be 50,000 sq ft with seven drive-through tractor bays, six trailer bays, and multiple mechanic pits to work underneath the trucks and trailers. The corporate office will be 55,000 sq ft and there are plans to include a driving simulator to help drivers enhance their safe driving techniques and improve their fuel management capabilities. The new facility has been designed to reduce the turnaround time for our trucks and improve our yard management. We would like to include an enclosed fuelling station with mechanic pits right outside our secured area. Our trucks would pull up to one of the drive-through bays and, while the driver gets his paper work done and the truck is refuelled, a mechanic would conduct the safety inspection. This will create a dramatic improvement in time savings for us, the driver and ultimately the customer. We are also investigating the use of transponder technology to identify the driver, truck and trailer. Additionally, it will provide specific instructions as to what needs to be done after the fuelling and safety inspection are completed and the driver enters the secured part of the facility. Being able to quickly identify where to drop off the trailer and pick up the next one will improve efficiencies and provide considerable time savings, which is particularly important in light of the new hours of service regulations and delays at the border.