SPECIAL REPORT: Anatomy of a fleet resurrection

WINNIPEG — Prairie hauler Winnipeg Motor Express has been given a new lease on life.

Speaking with todaystrucking.com this morning, company President Brian Page confirmed that the carrier has survived the last six months under creditor protection and is now gearing up to resume operations as normal.

Page is part of an ownership consortium—gathered together by a local private equity firm—that won a bidding process to buy the company from a former group, of which Page and another executive were also large stakeholders in.

Since filing under the Companies’ Creditors Arrangement Act last May, WME successfully completed a restructuring and refinancing plan overseen by Ernst & Young in Winnipeg.

WME is now about 30 percent smaller than the 243-truck (80 owner-ops), 420-trailer fleet it was at the start of the year.

Despite the optics of returning the formerly-struggling company back to its original owner, a Manitoba judge agreed with Page that giving him and his new partners the company back was the best move considering most of the other competing bids were "liquidation-style" offers.

"It simply made a lot of sense for the company, the community and the province to continue this business — to keep it going," Page told us.

Flexibility in the key to trucking, says WME’s Brian Page

Page says that without a loyal customer base, the overhaul would never have worked. The carrier, which hauls agri-products, western manufactured products to the U.S., and general goods across Canada, was able to diversify—never sinking more than 6 percent of revenue into any one customer.

Its yielding model and lane reselection was predicated more on customer base than general economic trends. North-south lanes, for example, weren’t categorically scrapped strictly because of the volatility in southbound trade. As a result, very few customers left.

"Of course," adds Page, "there were some customers, through lane selection, that we decided didn’t fit into the new model, which allowed us to reengineer our network.

"We figured that if we reduced capacity from the point which the trucks begin to the point which they get home, then the route that the driver travels needs to be profitable. If 30 percent dropped off, which accounts would we need to be able to do business?"

The company now emerges with fresh legs heading into a shaky New Year. While Page agrees steering the company through the next 12 months or so will be difficult, he’s confident he’ll weather the storm since the company is now carrying little debt.

(Incidentally, the new company will assume some of the prior lease financing debt. And while unsecured creditors won’t get paid yet, Page says a number of them have agreed to continue working with the company going forward).

"We believe tougher times will continue through 2009. But we took that into account when we did our modeling. We did not put any growth into our forecast. In fact we basically shrunk below what our optimum level was to make sure that if we had to shrink some more the ability would be there to do so.

"Flexibility in this business environment is probably the primary key to success."

It’s a lesson the company learned the hard way, Page admits. "What happened to us before is that we weren’t able to flex down fast enough and you get stuck with such things as leases you can’t get out of and it becomes unmanageable."

Leaner and more efficient, WME has no problem flying under the radar for a while. After all, sometimes it’s the smaller items that are left unscathed when a storm touches down.