SGT 2000 keeps on trucking
Entrepreneur rode cross-border NAFTA trade growth

When Denis Coderre disagreed with how his father was running the family trucking business, he didn't just sit in the corner and sulk like many boss's kids are prone to. Nor did he go to a bar and pontificate about how out of touch the old man was with modern trucking methods. Instead, he quit and started his own company.

So far, it looks like he made the right move. SGT 2000, the company Coderre founded during the late 1980s with one vehicle, is now one of the largest full-load trucking and logistics firms in the province, with almost 700 employees, 1,200 cabs and trailers and 11 offices across North America.

"My parents taught me almost everything I know and they gave a good chance to learn the business," Coderre said. "But they wanted to operate a small transportation firm, with maybe two dozen units. I wanted to do something a little more ambitious."

Coderre has been pushing the boundaries all his life. At 13, when he could barely look over the dashboard, he was already running grain from the loading docks at the Port of Montreal. By 15 he was driving full loads across the U.S.

"It was different back then," said Coderre, as though he was talking about another century. "There were almost no cops on the road, and you rarely got stopped. Today they are all over the place."

But Coderre doesn't just drive trucks. He also drives himself. By the time he was 18, he'd saved enough money to pay for his first car in cash. At 24 he was married, and that year his wife bore him the first of his four kids.

Business-wise the turning point came in November 1988 when he delivered SGT 2000's first shipment. Since then he hasn't stopped. Working seven days a week, Coderre had ten trucks on the road by the end of the next year and close to 100, a few years later.

Coderre's timing couldn't have been better. The founding of SGT 2000 coincided with the implementation of the Canada-U.S. free trade accord. Shortly after the deal was signed cross-border traffic exploded and the trucking industry was one of the biggest winners. Shortly thereafter through NAFTA, Mexico joined the club, and Coderre stretched his tentacles even further south.

During 2002, two way Canada-U.S. trade alone hit $564 billion, close to two thirds of which was shipped by truck, and cross border shipments now account for more than 60 per cent of SGT 2000's revenues.

But Coderre did a lot more than just go along for the ride. He consistently outpaced industry growth. This year alone, SGT 2000 is on track to hit $85 million in sales, which would represent an 11.3 per cent jump from the $75 million the company recorded last year.

But it's a tough industry to do business in said one expert. "Operation costs, insurance, fuel and the equipment are constantly increasing," said Marc Cadieux, vice-president at the Association du Cammionage du Québec. "And customers are not willing to increase their rates. It's hard for trucking firms to make a good living.

According to Cadieux, staff turnover is one of the key challenges facing the industry. "Young people don't want to come into the profession anymore. The pay is good, but many people would rather make a little less money at another job and have more time at home with their families," Cadieux said. "It's a quality of life issue."

To keep up with heavy price competition in the industry, Coderre is careful to keep operating costs down to the bone. All his trucks have computer devices installed on them to monitor their average speeds, travel and idle time. Coderre has an employee working full-time whose sole responsibility is checking the logs to make sure that drivers are operating as efficiently as possible.

All trucks are modified so they can not travel faster than 62 miles per hour. Surprisingly this restriction actually saves time Coderre said.

"We've studied this closely. Drivers that drive faster spend less time on the road. But because they are so stressed, their break times are longer," Coderre said. "By keeping their speeds down, they drive safer, and are more efficient."

Coderre is weathering the industry's challenges well said another observer. "He is highly ambitious and totally committed to his company," said Jean-Guy Mailloux, editor of Transport Magazine. "The fact that he grew up in the business, gives him a big advantage over other industry managers, because any problem that comes up, he's already seen it."

"He is also modest enough to admit it when he doesn't know something, and has surrounded himself with a smart group of people, particularly in his finance department" Mailloux said.

For the time being Coderre plans to maintain SGT 2000's long-term pattern of slow and steady internally generated growth. But its not going to be easy. SGT 2000 is now a big player on the Canadian scene.

According to Transport Canada there were close to 254,000 heavy trucks on the road last year with a weight of more than 15,000 kilograms, and for larger players like SGT 2000, major market share gains are going to be a lot harder to come by.

But Coderre seems unconcerned. "I don't have any competition," he said, brushing aside the statistics with a smile. "We do the best job we can, and we don't worry about the rest. Look at me, I'm a relaxed guy."

Sidebar: Getting ahead

o Denis Coderre founded SGT 2000 after having worked in his father's trucking company since he was 15 year old.
o The company made its first shipments in 1988, and grew steadily in ensuing years as trans-border shipments exploded in the wake of the implementation of the Canada U.S. free trade accord and NAFTA.
o The trucking industry is highly competitive with close to 254,000 trucks in the 15,000+ kilogram category on Canada's roads, which compete for close to $15 billion of domestic and trans-border contracts.
o The industry remains beset by challenges ranging from increasing insurance, regulatory and fuels costs. Younger truckers, reluctant to endure the tough life on the road, are increasingly harder to recruit and train.
o Coderre credits his success to long hours at work, his industry knowledge stemming from long years in the trade and his ability to surround himself with experts in the fields that he knows little or nothing about.

 

 

Photo Caption: According to Denis Coderre, the increased flow of goods from free trade and NAFTA are in large part responsible for his company's growth into the U.S. and Mexico.

peter@peterdiekmeyer.com

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