DAN EINWECHTER HAS BUILT AN INNOVATIVE PORT RIVERS OF …€¦ · Wilfrid Laurier University....

12 l exchangemagazine.com l JUNE 2006

In three tumultuous

decades, Dan Einwechter

has built quite a reputa-

tion in the trucking industry;

he’s also made a few ene-

mies.

He’s proud and vocal

about the success of Chal-

lenger Motor Freight Inc.

Einwechter is an enthusias-

tic raconteur, overflowing

with stories (liberally laced

with expletives) about his

company and its history.

And he’s utterly unashamed

of the controversies, willing

to vent public criticism of

politicians and bureaucrats –

especially those connected

with his own community,

Cambridge – who he sees as

obstructionist. He has made

headlines with his uncon-

ventional pronouncements.

DAN EINWECHTER

HAS BUILT AN

INNOVATIVE PORT

ON “THE NEW

RIVERS OF TRADE”

BY PAUL KNOWLES

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JUNE 2006 l exchangemagazine.com l 13

MOVER & SHAKER

CHALLENGERtakes on all challenges...and prospers

CHALLENGERtakes on all challenges...and prospers

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He has most recently made a differ-ent kind of headlines for a prestigiousaward honouring the pro-environmentefforts involved in the construction ofthe new, $20-million-plus, 126,000square feet Challenger terminal andheadquarters at 300 Maple GroveRoad, Cambridge (see the LEED Recog-nition story in the Grand Valley Build-ing Excellence Awards feature in thisissue of Exchange magazine). Ein-wechter and Challenger PresidentEugene Moser are both excited aboutthe environmentally responsible waythe new corporate headquarters and

terminal have been built. Moser isbursting with information about recy-cled materials, green products andoverall high environmental standards.

Does this heightened environmentalawareness seem unusual for a compa-ny that is in the trucking business?Well, Einwechter has always followedhis own, unusual path, and he talkswith candor and great humour aboutthe history of Challenger.

He was raised in New Dundee; as ateenager, Einwechter says, “I made myliving working on farms, and loadingand unloading trucks.” He loved trucks.

His step-father was an owner-opera-tor, and the teenager had no doubtabout what he wanted to do: “Twodays after getting my driver’s license,at age 16, I was driving a tractor-trail-er.”

Four years later, Einwechter was inhis second year of university, with$1,500 in the bank. That should beenough, he thought, to start a busi-

“Two days

after getting

my driver’s license,

I was driving a

tractor trailor.”

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ness. There was no doubt what kind ofbusiness he wanted to be involved in.He says that one of his professors men-tored him in those early days. “Shehelped me draft up 100 letters,” whichhe mailed to 100 prospective cus-tomers. He knew that the usualresponse rate to such mailings wasabout 1%. That proved accurate – hereceived one reply. “The guy needed aload of freight moved the next day, toCleveland.”

Against all odds – and possibly aregulation or two – Einwechter made ithappen with a rented truck. D.S.TruckExpress Leasing Service was born.About ten years later, the business wasre-christened as Challenger MotorFreight Inc.

In addition to launching his compa-ny, Einwechter completed his degree -honours business administration - atWilfrid Laurier University.

Truckloads of honours have beenbestowed on Einwechter and Chal-lenger. In December, 2005, the compa-ny was named one of Canada’s BestManaged Companies for the fifth con-secutive year. It has also received theShippers Choice Award three times,and was CITA Carrier of the Year in2002. Einwechter is an Executive Mem-ber of the Board of Directors of boththe Ontario Trucking Association andthe Canadian Trucking Alliance. In2004, he received the “Trailmobile Ser-vice to Industry Award,” in recognitionof his “outstanding contribution to the

development and success of the trucktransportation industry.”

But in 1975, confesses Einwechter, “Ihad absolutely no knowledge of thebusiness.” And it was a very differentbusiness, 30 years ago, from what ithas become. Deregulation completelychanged the corporate geography. Butsome things have not changed, firstamong them Einwechter’s commitment

to carrying through on commitments.The company slogan is “We go the

distance,” and the chairman and CEOmakes sure that is true, every day,every trip. Today, Challenger servicesinclude “Truckload, Team, LTL, Expe-dite, Logistics and Special Commodi-ties/Flatbed.”

Einwechter laughs, often, as he tellsstories about his early days in thetrucking business. By the early 80s, thecompany had begun to prosper. But“we were operating as a lease compa-ny...” Einwechter pauses. “We werereally gypsies. We found convenientavenues around the legislation.”

He decided to apply for the appropri-ate license – as a “single operatingauthority” – in order to stop the needfor “convenient avenues”. That wouldhappen most easily, he thought, if thecompany had a new name. While driv-ing in Ohio, he had a “Eureka” moment– “Since I’m trying to challenge every-body, it’s going to be Challenger Motor

Einwechter and Moser

are excited about

the environmentally

responsible way the new

corporate headquarters

has been built.

The new, $20-million-plus, 126,000 square feet Challenger terminal and headquarters at 300 Maple Grove Road, Cambridge

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Freight.” He explains he opted for“Motor Freight” because that was a USstyle of name, and he wanted US busi-ness. He’s very much a pragmatist: “I’dbecome a very proficient cross-bordercarrier. We’d become pretty good atwhat we did. I wanted my American

clients and potential clients not tothink I was Canadian... so they wouldthink I was one of them.”

“Challenger Motor Freight – I like itbecause it’s aggressive. The name hasstood me in good stead.”

“Aggressive.” Yes, that could also bean apt description of Challenger’sfounder. In 1985, when the newly-

Moser

is bursting with

information about

high environmental

standards.

Eugene Moser, president of Challenger Motor Freight Inc.

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named Challenger applied for a licenseunder the old, regulated regime, thecompany had 51 trucks. Not badprogress for a business that began adecade earlier when a 20-year-old uni-versity student rented a truck for hisfirst contract.

But 51 units seems small potatoes in2006, when Challenger now has 1,450owner-operated and company trucks

on the road, as well as about 3,500trailers, operating under three compa-ny names: Challenger (“the mothership”), Elgin Motor Freight and CamHiltz Trucking, which specializes inwaste haulage. Challenger is also anequal partner in MCX (Motor CityExpress), an American automotivecontract carrier.

Challenger employs 1,750 staff

members, including owner-operators. It has facilities inMontreal, Newmarket (head-quarters for the wastehaulage operations), Lon-don, Vancouver and Detroit(MCX), as well as its innova-tive new main terminalwhich covers 53 acres inCambridge.

When Einwechterrecounts these historicaldetails, his stories come

laced with strong opinions. When hetalks about applying for the officiallicense in 1985, he says he was upagainst “an old boys network.” And helaughs that “we won the battle but lostthe war,” because when Challengerwas licensed, that “helped speed upderegulation.” They had set a prece-dent, and “all the other gypsies” quicklyfollowed suit to become competitors.

He also remembers an entirely coin-cidental controversy about the compa-ny name. Challenger officially cameinto being December 15, 1985; “in Feb-ruary, 1986, the Challenger shuttlewent down.” The same Americanclients Einwechter was courtingaccused him of being insensitive, and “Itook some flak from Americans for thatfor quite some time.”

But Einwechter is nothing if notdetermined. His response to the nam-ing controversy was to keep “going thedistance for our clients, and for eachother,” and the company survived thetragic coincidence of names, and con-tinues to prosper.

Going the distance is no easy chal-lenge, considering that 80% of the com-

pany’s business is “just in time freight,”and a lot of that has to make it, “just intime,” across the American border.

“The border is the great unknown,”says Einwechter. “After 9/11 it becamehellacious. It was bad. But it has sort of

Programs are developed

in close cooperation

with the American

Department of

Homeland Security.

Challenger Motor Freight received the Environment Award at the Greater Kitchener Waterloo Chamber of Commerce 2006 Business Excellence Awards, (l-r) Murray Costello from Union Gas andDan Einwechter, Chairman and CEO of Challenger.

Dwayne Barnett, Driver Training and Development coordinator, with the full-size computerized simulator at challenger.

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levelled off, now. Now, we have FASTcards, technology to get across theborder.”

But that doesn’t mean consistentlysmooth sailing; security concernsmean border crossings are always vul-

nerable to delay. And that can causeproblems, both in delay of delivery, andbecause new regulations governingdrivers permit shifts no longer than 14hours – including hours spent waiting,even sleeping, at a border crossing.

That hasn’t prevented Challengerfrom growing, though. On any givenday, Challenger trucks may be deliver-ing courier packages to Vancouver, carparts to Texas, food products to LosAngeles, and truck parts to North Car-olina. Einwechter says that 54% of thekilometers covered by Challengertrucks are in the U.S., 46% in Canada.Canadian business is actually growing,as the company has seen a recent“shift” to east-west deliveries, from theAtlantic to British Columbia. Since1994, Challenger is also authorized tooperate in Mexico.

Wherever the Challenger trucks go,when they return home, they comeback to one of the finest facilities onthe continent. Challenger moved fromits former home on Groh Avenue inCambridge, in August, 2005. The Grohfacility will be demolished and rede-veloped, says Einwechter. The compa-ny always has use for more space –although the new headquarters covers53 acres, with buildings totalling126,000 square feet, Challenger actu-ally uses 650,000 square feet of ware-housing in Kitchener-Waterloo. Thecompany provides warehousing andinventory control services for a vastarray of clients.

Einwechter is delighted to take timefrom a clearly busy schedule to offer adetailed tour of the new Challengerfacilities. And along the way, he isquick to suggest that the headquarters– which he says is the best in Canada,

“He who has the

drivers, wins. With this

facility, we win.”



among the top five in North America –has been built “in spite of the city ofCambridge.” He is not afraid to makesome political enemies, and has doneso by speaking out on more than oneoccasion, including a recent awardsbanquet. He says, bluntly, “It’s abysmal,the attitude of the bureaucrats.”

The bureaucrats and politicians, ofcourse, make it very clear they do notagree with his assessment. There is lit-tle sign of the dispute ceasing to sim-mer, any time in the near future.

But in the meantime, nothing hasstopped the completion of the creativenew facility. There are intriguing inno-vations around every corner. One roomhouses a state-of-the-art, full-sized,computered and mounted truck cab thatis actually a simulator, used for training.Or, in the case, of Einwechter, for hav-ing a heck of a ride for a few minutes,until he intentionally bounces his virtualrig off the highway and into a field, tothe amusement of the training officerwho programs the simulated runs.

The real trucks can be found, ofcourse, in the massive parking area –756 spaces, all electronically tracked.And in the enormous service bays and

the special indoorfueling and inspec-tion facility thatreceives every truck,fresh from the road,and does a complete analysis of thestate of the rig in a matter of minutes.Einwechter loves that particular facility,because he admits that “as a formerdriver,” he hated long line-ups forinspection “at 2 in the morning.”

The new terminal includes 56,000square feet of corporate office. Thatwas intended to leave room for growth,and that theory is holding on the cor-porate side, where at this point 37,000square feet are occupied. However,Einwechter admits that the parking lotwas completely full on a recentevening – the business is booming, andChallenger has purchased 360 newtrucks in the past year, at about$138,000 each.

But it may be easier to obtain newvehicles than the people to drive them.The CEO suggests that the new facilityis in reality a multi-million dollar perkto attract drivers. “It’s harder and hard-er to attract truck drivers,” says Ein-wechter. “Our thing is, he who has the

drivers, wins.With thisfacility, wewin.”

“The wholesite,” he says, “was designed with thedriver in mind.”

The whole site also took on a life ofits own, as it developed from conceptto reality. Einwechter laughs, with a bitof irony, as he explains that when theidea was first broached, five or sixyears ago, “I thought, $5 million to $8million .... then, $12 million to $14 mil-lion. Now, we’re well over $20 million,”including all the technological ele-ments of the facility. That technologyincludes the “Yard Smart” program,which prohibits anyone except anapproved driver from being on the site.Because of their cross-border business,such programs are developed in closecooperation with the newly famousAmerican Department of HomelandSecurity.

Einwechter acknowledges that he hasspent a lot of money on his new facility –and he is not only CEO, he is owner ofthe private company. But he firmlybelieves it to be a solid investment.

The Challenger terminal and headquarters were built to be driver - friendly.

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“If the economy is going to grow at3% to 5%... trucking will always growmore than the economy because of thereliance on truck transportation. Weare the new rivers of trade.”

And now that Einwechter had metthe latest challenge of building what he

believes is the finest truck terminal inthe country, is he ready to shift into alower gear? Not a chance. He jokesabout a succession plan involving hissons ... who happen to be aged eightand six, not quite ready for the CEO’soffice just yet. Einwechter is definitely

sticking around. “I’m only 51. We havea great team of managers here.” Thatallows some R and R for the boss: “Ican go away and I know they’ll makethe right decisions.”

But he also knows that he will soonbe back in the office, ready to meetwhatever challenge is next on theagenda – battling bureaucrats, solvingborder crossing issues, or squeezing aprofit from “sickeningly low returns”exascerbated by the rising Canadiandollar.

“We have a lot of challenges in anindustry that is tough,” he says, “butthere always have to be successes.

In December, 2005, the

company was named one

of Canada’s Best

Managed Companies for

the fifth consecutive year.

The management team at Challenger with the Canada’s Best Managed Companies Award, (l-r) MikeBradey, Brad Bebbington, Enno Jakobson, Dave Einwechter, Wayne Scott, Dan Einwechter, SylviaBordignon, Eugene Moser, Peter Barr, Kitchener Office Leader from Deloitte & Touche, John Bowey,Regional Managing Partner, Deloitte & Touche, Eveline Gaede and Doug Blair.

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DAN EINWECHTER HAS BUILT AN INNOVATIVE PORT RIVERS OF …€¦ · Wilfrid Laurier University....

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