Enhancing trucking conditions empowering organic growth: Titanium

The Titanium Transportation Group is taking privilege of the changing business environment that’s conducive to organic growth, as the team continues to assess acquisition opportunities.

Growing organically has been all but unattainable in the trucking industry, generally seeing that of a lack of first-rate drivers. But, Ted Daniel, CEO of Titanium, said on a conference call with experts that he feels the organization’s unique share-purchase plan, presently being taken off, will enable it to conquer that challenge.

“We are the only Canadian trucking company that has this type of plan,” Daniel said. “TSX companies that have this type of plan by far outperform companies that don’t.”

Daniel said organic growth is additionally empowered by an extended sales group working out of a new consolidated head office, and general business flow that is bringing supply and demand into alignment and permitting rate increments. Titanium posted Q2 results this week. Income increments were to a great extent driven by its logistics division, which profited from fortifying market prices. Though Daniel said contract rates are likewise enhancing, however, it takes more time to understand those increases as contracts come up for renewal.

Generally, the contract rate improvements and the spot market face a three-to-six months slack,yet the organization has been fruitful in increasing rates as contracts come up for renewals, Daniel said. To oblige its organic growth, Titanium has ordered 10 new flatbed trailers and 10 Volvo tractors.

Daniel said the company has the ability and resources to make it “comfortably double in size”. In any case, its attention on organic growth doesn’t mean it has deserted its long haul vision to develop through acquisition. It just means there’s not an incredible feeling of direness to do as such, and the organization is being specific about any purchases it seeks after.

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“We’re looking for a good match,” Daniel stressed. “We are looking for companies that are looking for the ability to become a part of the Titanium culture and looking for the next chapter in their lives. We are being rather disciplined in terms of our criteria.”

Titanium has been slower to make bargains over the previous year. To some extent, that is on the grounds that 2016 was a down year and Titanium would not like to make bargains in an indeterminate domain based on past years’ execution. It has additionally turned out to be obvious that many organizations on the square haven’t kept pace with refreshing their armada, requiring an extensive money infusion to convey them a breakthrough. Titanium remains a dynamic purchaser, but deals must be “synergistic and accretive”, Daniel asserted.

“Given the fact we have a very strong organic growth opportunity, we are not in a position where we’re being pressured to do an acquisition to be profitable,” Daniel said. “I feel our profitability has nowhere to go but up over the next one to two years; we are going to continue to grow.”

With regards to finding an acquisition opportunity, Daniel said the organization leans towards an Ontario-based, cross-border, truckload carrier in the van or flatdeck portions. Daniel said he expects local carriers will confront pricing pressures in coming years, as a few drivers surrender running the U.S. in view of the approaching electronic logging gadget (ELD) command for running paper logs locally. For a similar reason, he sees an open door for more grounded cross-border pricing as capacity in the U.S. stiffens.

Daniel was buoyant while examining the trucking business and particularly Titanium’s position inside it. He feels the organization’s interest in its framework and IT will give it preference in an industry that is progressively modern and during the time spent seeing tightening capacity.