From the Ground Up - McCain Foods Limited

TOP: Joe Palmer, president of
Day & Ross, 1972.
BOTTOM: John Doucet,
president and CEO, Day &
Ross Transportation Group,
1999.
had to make certain that Day & Ross stayed in business because somebody’s trucks
had to get McCain products from New Brunswick to the rest of the continent.
Decisions based on necessity sometimes turn out better than ones based on a
grand strategy. As we shall see in the next chapter, McCain got into appetizers almost
by accident when it ended up owning an appetizer business as a result of a
french fry acquisition. Appetizers have turned out to be a huge win, and so has Day
& Ross. From a struggling regional transport firm, it has grown into a major trucking
operation with 2006 sales of $600 million and recognition as one of Canada’s
fifty best-managed companies, an award sponsored by the national accounting firm
Deloitte, CIBC Commercial Banking, the National Post, and the Queen’s University
School of Business. As of 2007, only about 10 percent of Day & Ross’s business was
with McCain Foods. McCain has big plans for Day & Ross. “Our ultimate goal,” says
Day & Ross CEO John Doucet, “is to be the brand name in transport that McCain is
in french fries.”
Elbert Day and Walter Ross founded Day & Ross in 1950 in Hartland, New
Brunswick. At a time when the railroads dominated the transport business, they were
pioneers. Their trucks hauled anything that needed hauling, from potatoes and roofing
materials to fertilizer and manufactured goods. Joe Palmer, a Hartland potato
farmer, was a customer and eventually bought control of the company, which he expanded
rapidly, although not always profitably. McCain gradually bought Palmer out
during the 1960s.
Palmer stayed on as president and, in 1977, hired Terry Bird as senior vice-
president. “The company was a basket case,” says Bird. Things were so bad financially
that Day & Ross was delaying mailing out cheques it had already printed.
Palmer was a boss with a style of his own. While Bird was deciding whether to
take the job, he and his wife went to meet Palmer at his home. “It was 10 am on a
weekday,” Bird recounts. “He interviewed me in his bedroom. He was still half asleep.
Afterward, my wife said, ‘If you join this organization, you have to be crazier than I
thought you were.’”
He did join and discovered that, although Palmer was no early riser, he was a hard
worker. “He would work all afternoon, play cards all evening, and then come back
and work on central dispatch through the middle of the night.”
Under Palmer, Day & Ross had become one of the largest transport companies
in eastern Canada. However, when the economy weakened in the early 1970s, the
company got into financial trouble. It was dependent on a small number of large customers
that provided small profit margins. Bird decided that targeting small shippers
was the way to boost profits, and so Day & Ross became an LTL (less than truckload)
specialist. An LTL transporter moves smaller shipments between terminals. At the
terminal, the shipments are transferred to another truck for local delivery.
Day & Ross’s rapid growth during a booming economy had hidden underlying
weaknesses, including a lack of qualified managers. Bird went to the universities to
recruit a stronger middle-management team. He initiated the creation of a procedural
manual covering all aspects of the company’s operations. He worked to improve
relations with the owner-operators who drive the trucks
and to improve the company’s accident record, thereby
lowering insurance costs.
Still, the company wasn’t making money. “Day & Ross
was haemorrhaging,” says Bird. Harrison would call me
every week. One time I told him what I planned to do
and he said, ‘I don’t agree, but you’re the boss, and if
that’s what you want to do, go ahead and do it.’ Never
once did he ever come back to me and say, ‘See, I told
you.’ One of the things Harrison and Wallace did well
was know when to give you a compliment and when to tell you to do a bit better.
And it was never when you thought it would be. They were constantly motivating
you to do better.”
There was certainly room for improvement. When David Sanchez arrived in 1991
as CFO, he found, he says, a disaster. Day & Ross lost $20 million that year largely
because of an acquisition that didn’t work out, of a company in California.
In 1992, McCain hired a new CEO, John Schiller, whose mandate was to make Day
& Ross profitable. He hired John Doucet, an experienced trucking executive as chief
operating officer. When Schiller left in 1998, Doucet became CEO. “Transport is not
that complicated,” he observes. “We’re only moving boxes around when you get right
down to it.”
The important thing is to get the boxes to their destination intact and on time. In
the previous twelve months, Day & Ross’s on-time delivery rate was only 60 percent.
To improve on that, Doucet introduced what he calls pro-active tracking. This meant
that, if a delivery was going to be late, the local terminal manager had to call the
customer between 8 and 10 am and inform him. “The terminal managers soon got
the message that if they didn’t want to spend the morning on the telephone, they had
better get the freight delivered on time.”
Doucet offered improved service for higher prices and said goodbye to the
152 f rom the Ground up
the home front 153
TOP: Day & Ross has Canada
covered coast to coast.
BOTTOM: Terry Bird, 1982,
then president and CEO
of Day & Ross.