Thursday, July 8, 2010

Trucking firm TransForce Inc. signals faith in the West



One of Canada's largest trucking companies has tripled its presence in Calgary, signalling confidence in the city's -- and Western Canada's -- future potential as a major transportation hub.
Montreal-based TransForce Inc. said Wednesday it acquired a 52-door terminal in the city which will substantially increase its subsidiary TST Overland Express's ability to move shipments into and out of the region.
Calgary is a central location for cross-border as well as interprovincial truck traffic.
"We are continuing to invest in our operations in Western Canada because of the region's economic strength and growth potential," said president Alain Bedard. "This new terminal enables TST Overland to deliver expanded services in and out of Calgary, which is a major gateway for shipments within Western Canada as well as to and from the United States."
The subsidiary, headquartered in Mississauga, Ont., has added direct line hauls between Calgary and Dallas, reducing freight handling and transit times. It boasts Canada's largest less-than-truckload network, using terminals such as Calgary to consolidate shipments between destination points.
The estimated $10-million cash acquisition is small for the multibillion-dollar company, but significant as it signals a strategic push to boost capacity in the less-than-truckload traffic in Western Canada, said RBC analyst Walter Spracklin.
"This is a vote of confidence in the future growth potential of the west," Spracklin told the Herald.
"I don't think capacity is tremendously stretched today, but certainly when you go out a few years. . . . You don't want to position yourself for next year, you want to position yourself for the long term, and that's what they've done."
The acquisition gives the company extra capacity to grow in a promising region, Spracklin said.
"It doesn't do anything to the actually level of volume," he said. "What it does is it allows that volume to come in, where as before it was extremely constrained."
TransForce made the deal with cash-strapped YRC, the largest cross-border player in Canada, which has been shedding assets to improve its financial footing.
The company, a merger between the Yellow Transportation and Roadway networks, has extensive global trucking operations, and operates in Canada under YRC Reimer.
"Given the fact that YRC is the largest cross-border player, we consider TransForce, as the No. 2 player, to be in a very enviable position of acquiring assets at what could be very distressed prices," Spracklin noted.
domeara@theherald.canwest.com

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