Yanke Group employs a distinctly different approach to traditional carrier management. President Scott Johnston explains why and how it benefits shippers in an exclusive interview.
CT&L: Your company was one of the first in North America to spec a bulk order of the first electronic engines; one of the first to employ satellite communications; and a leader in embracing multimodalism. Do you view this willingness to go beyond traditional industry practices as a main reason you have been named to the 50 Best Managed Companies list five years in a row?
Johnston: I think it’s more so the fact that we have ensured this corporation is run as a leading company would be in any other industry. We see ourselves as facilitators of commerce. We have a very disciplined and formal approach to how we evaluate the market place, our position in it, and how we need to run the organization. This is not how family-owned transportation companies have been traditionally run. Our company is corporately run as opposed to relying on an entrepreneurial management style. We are very tactical in our decision making. If you see the trucks, trailers and containers you own as merely tools in helping you facilitate commerce for your customers, you don’t have any barriers.
CT&L: How are you evolving your intermodal operations?
Johnston: Our intermodal presence in the market place is continuing to grow. We have a relationship with both Canadian National and Canadian Pacific and we see further complimenting our asset base and capacity this year. In the last six months there has been an evolution with the two major railways with their service offerings no longer being identical. We expect to capitalize on the capabilities and the capacity of both.
CT&L: How do you ensure adequate levels of visibility into each shipment as it switches from road to rail and back again?
Johnston: We do have in place track and trace capability but we actually find there is very little usage. Visibility is perhaps somewhat overrated. What shippers really want is to be confident that their service providers are capable of managing the business; they don’t want to manage our execution of the undertaking. Having to learn to navigate the IT platforms of their multiple service providers is a challenge most shippers do not have the time, energy or interest in pursuing. They believe the onus is on the service provider to provide exception reporting so they are alerted only when there is something wrong.
CT&L: How have shipper expectations for their intermodal service evolved?
Johnston: In the past the main reason for using intermodalism was sheer economics. Today, because shippers have rationalized their product handling systems to drive out cost, they have grown beyond that. They want a greater degree of confidence and reliability in the system along with a greater degree of communication. They expect to be notified pro-actively of a variance in the schedule and they want their service providers to offer contingency plans. One of the benefits to being as diversified as we are is that we have the over-the-road expedited capabilities to put a complete contingency solution into place.
CT&L: I understand you have also broadened your presence in the over-the-road market with some key additions, including a new Toronto terminal.
Johnston: The Golden Horseshoe is the economic heart beat of Canada and east-west distribution. Our new terminal allows us to provide greater equipment capacity to the Mississauga-Brampton and broader Golden Horseshoe area and to be very responsive to the expedited market place we service out of that area to western Canada. We have also broadened our North American coverage to include California, and we are now CSA and FAST approved with over 90% of our operators successfully completing their applications.
CT&L: You’ve made some recent additions to your trailer and tractor fleets. Can you outline what has been added to your capacity and why you were willing to make the investment despite the shaky economy last year?
Johnston: In undertaking our capital budget requirement process we have identified that we will introduce 215 power units and 450 dry van trailers during this calendar year. As a result of the addition of this equipment we will realize a 10% reduction in our overall trailer fleet while maintaining a high degree of on time service performance and capacity availability but reducing the capital deployed in supporting our gross revenue. We will add, as a result beyond the replacements approximately a 10% increase in power unit growth. Although the reduction in the exchange variance between the US and Canadian dollar and the short term negative impact one realizes long term benefit as a result of the capital cost reduction for equipment manufactured in the United States. Furthermore, with interest rates being at their lowest levels in the past ten years we believe it will have a significant reduction to our operating cost while taking on this long term debt and will fuel economic activity which we will be positioned to undertake.
CT&L: The fact you operate a container port in Saskatchewan – a thousand miles from tidewater – certainly stands out. In your own literature you acknowledge many people thought it a crazy idea. Now you also operate a container port in Manitoba. What turned this into not only a sane idea but a necessary service for shipper?
Johnston: It’s interesting the interconnectivity that exists between our service offerings. I can tell you of an example of moving fibre-optic cable by an expedited double team from North Carolina to Saskatoon and from there to India for installation of a new computer network. Our container port logistically managed the storing of the fibre-optic cables in containers, which was a challenging task because the cable footage in each container was pre-determined by the engineering design and each container had to be delivered to the job site in India in the proper sequence. Having these ports means we have the service capability to support shippers and consignees in Manitoba and Saskatchewan and beyond. We undertake steamship line movements and international freight forwarding opportunities out of the US to Europe international ocean and airfreight movement opportunities out of other parts of Canada and the USA to Australia, South America and Europe.
CT&L: How do you see your company continuing to evolve?
Johnston: We will continue to grow our capacity in tune with our Fortune 500 customers who look to increase their market share and want cost-effective transportation solutions. We started a reefer division in March, operating out of Winnipeg and servicing the North American market place. This was done to capitalize on the opportunity we saw due to a lessening of capacity caused by business failures of carriers over the last 24 months. We also intend to grow our rail capabilities not only on an east-west but also on a north-south basis.