Half a load is better than none for Vitran, which nets the majority of its revenues from its less-than-truckload (LTL) transportation business. (LTL carriers combine freight from multiple shippers into a single truckload.) Vitran -- the name is short for "vital transportation" -- provides LTL service in Canada and in about 30 US states. Vitran's Supply Chain Operation (SCO) segment offers logistics services in the US and Canada. Overall, the company operates a fleet of more than 9,000 tractors, trailers, containers, and chassis from a network of more than 100 facilities, most of which are located in the US, which generates more than 70% of company revenues.
Vitran has been on a run of bad luck for three years going. Posting another unprofitable year in 2010, the company took a more than $40 million loss in its net income. This comes subsequent to a $4 million loss in 2009 and a whopping $71 million plummet in 2008. The losses are primarily related to non-cash expenses.
The company wound down its Truckload (TL) business, in order to focus on its two core business segments -- LTL and SCO services. In late 2010 Vitran sold selected assets of its TL subsidiary Frontier Transport Corporation to Indiana-based Online Transport for about $5 million. It also sold the majority of its TL rolling stock for about $3 million, but kept 20% of the newest trailing fleet to be used in its LTL business. The sale of Frontier Transport allowed Vitran to pay down its debt, but the discontinued operations did take a $2 million bite out of its net income.
To build on its LTL business, Vitran is making strategic acquisitions to increase its competitive position, particularly in the US inter-regional market segment. The company is expanding its US LTL operations by buying companies that complement its Vitran Express unit. In early 2011 Vitran purchased the LTL business of US-based Milan Express, which includes all of Milan Express' rolling stock and about 20 service center facilities in Central and Southeast US.
Despite its breadth of operations, the economic downturn in the transportation industry eroded Vitran's revenue by more than 13% in 2009 over 2008; however, it rebounded in 2010 with a 13% increase in revenues. The company is concentrating on regaining its footing in transborder LTL service between Canada and the US, coupled with regional, inter-regional, and national services. Vitran intends to replace purchased transportation with company drivers and equipment.
Also vital to its recovery, is the company's SCO services supply chain management (warehousing and distribution) and freight brokerage (matching shippers' cargo with carriers' capacity) operations. The company has 17 SCO facilities, seven in Canada and ten in the US, as well as more than 2 million sq. ft. of warehouse and distribution space. Vitran sees opportunities for its logistics operations to funnel business to its LTL units. – less