Big Freight buys warehouser
Nabs Paramount; expands its scope
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Hey there, time traveller!
This article was published 13/07/2011 (4093 days ago), so information in it may no longer be current.
Big Freight System has acquired Paramount Storage in Winnipeg, enhancing the Steinbach trucking firm’s goal of getting into the supply-chain-management business.
Big Freight’s CEO, Gary Coleman, said management has been re-engineering the company for some time with a focus on doing more than just picking up and dropping off freight for its customers.
“We have been focused on developing supply-chain-management solutions and this warehousing opportunity was one thing we had identified a number of years ago,” Coleman said. “It is a strategic piece of our long-term vision.”
Paramount Storage has close to 400,000 square feet of warehousing space in three different buildings, all within a three-block radius in Inkster Industrial Park.
Big Freight had already been using Paramount’s warehouses as a third-party provider of certain services to its customers.
Coleman said Big Freight will have that much more of an attractive package, now that it will be also be the owner and operator of the warehouse as well.
Bob Dolyniuk, executive director of the Manitoba Trucking Association, said Big Freight’s move into a greater service offering is part of a trend in the industry.
“There are a number of companies that provide that kind of supply-chain-management service and there are more companies getting into it,” he said.
Part of the re-engineering of the company Coleman spoke of is a concentration on investment in information technology.
All of Big Freight’s 600 pieces of equipment have satellite technology installed that allows shippers to be able to track their freight online at all times.
“Today we can provide clients with key performance metrics — information that they couldn’t or wouldn’t be able to produce themselves,” he said. “They can provide that to their sales team and have a better understanding of what’s happening in their markets.”
The Paramount deal closed days after the Coleman family-owned Big Freight celebrated its 63rd year in business.
The company started as a trucking firm that worked exclusively between Steinbach and Winnipeg. Now the company operates across Canada and in and out of the United States.
Coleman said it does significant business with manufacturers in the southeastern United States who are moving product into Western Canada.
Big Freight started negotiating with Paramount earlier in the year and subsequently the company’s trucking division was placed in receivership.
As well, Paramount’s former owner, industry veteran Edgar Thiessen, passed away in the midst of negotiations. That extended the process of closing the acquisition.
“It was very unfortunate,” Coleman said. “He was a very good man.”
The purchase price was not disclosed. Paramount Storage has 25 employees who will now all work for Big Freight.
End of the line for Paramount Truck Lines
PARAMOUNT Truck Lines was shut down and placed in receivership last month, likely a victim of the aftermath of the recent recession.
The company had 72 tractors and 137 trailers and its closing meant the loss of about 105 jobs.
According to court documents that are part of the receivership proceedings, Paramount was caught with too much debt at a time when revenue per mile decreased and debt and fuel expenses were going up.
Joe Healey of Ernst & Young, Paramount’s receiver, said after the company’s fleet has been marshalled into its Winnipeg yards, the process of liquidating the assets will begin.
Bob Dolyniuk of the Manitoba Trucking Association said the company’s demise was likely the culmination of a number of events.
“We’ve just gone through a recession and we said then that there may be companies that will fall out when things start improving,” he said. “Many companies were not prepared for the upswing. If you wait too long to replace capital, sometimes what you are faced with is insurmountable.”
The company owed about $2.5 million to GE Capital and amounts yet to be determined to several other leasing companies.
Healey said the liquidation will likely produce a shortfall for the secured lenders and there will not be any distributions for unsecured creditors.
That group includes a number of local tire companies that are owed tens of thousands of dollars each.
Beaver Truck Centre is the largest of the unsecured group. Paramount owes it $252,163.99.
— Martin Cash
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.