Why some companies don’t just survive but thrive during hard times

When you call Alliance World Transport you don’t get voice mail; within two rings someone answers. E-mail the company and your message will be read within 10 minutes. “That’s our policy,” says Hayley Warner, Alliance’s general manager and co-owner. “We provide effective customer service, and we don’t just pay lip service.”

Strong customer service is one reason Alliance is weathering the economic storm when many other transport companies are getting slammed by declining exports. Warner believes prompt service is one of the things selling Alliance to customers. The Halifax company does very little marketing, instead relying on word of mouth. “It’s a grassroots approach,” says Warner. “It’s nothing fancy.”

It may not be fancy but it means Alliance, while not growing last year, did not lose ground in its highly competitive industry—and that was unusual. Mary Brooks, a professor in Dalhousie University’s School of Business Administration and a Fulbright scholar, says the transport industry is in “total chaos.” Brooks points to air cargo’s 20% decline and the large number of container ships now docked. She adds that transportation is dependent on demand for trade—and demand for trade doesn’t happen unless people are buying and selling things. “Without the underlying trade in the global marketplace picking up,” says Brooks, “this industry is in dire straits.”

Stephen Dempsey, the chair of the Halifax Gateway Council, agrees with Brooks’ assessment. He calls the transport industry a “leading indicator” and says that when consumers stop spending money, factories stop making goods. “That tends to hit the transport sector hard and quickly,” says Dempsey. “They certainly saw the impact of the recession before economists statistically declared it was one.”

So what does this mean for the Atlantic Canadian transport industry? Warner says Alliance prepared in advance. When she began running the company in 1995, she looked for ways to diversify Alliance so it wouldn’t rely on one market or product. Seafood is historically a major export from Halifax, but Warner didn’t want it to be the company’s only one. Instead, Alliance looked at all of the primary sectors shipping from the Port of Halifax and tried to “get a little piece of each one.”

Shortly after taking over the running of the company, Warner started diversifying by shipping other products, such as potatoes, seaweed, prefabricated homes, and vehicles. At the same time, Alliance remained true to its niche; it did not try to expand into other modes of transportation but stuck with ocean export. With five full-time employees and annual revenues in the six figures, Alliance experienced 15% to 30% growth every year until 2008, when the capelin and mackerel catches weren’t as high as expected.

What about the transport companies that didn’t have Alliance’s foresight? Can they climb out of the recession? Stephen Dempsey says the federal government’s Build Canada Fund and similar economic-stimulus packages contain some incentives for gateway associations, most of which are dedicated to promoting trade and transport. “We’re optimistic that this is the time to build for the future,” says Dempsey.

Brooks believes it’s an opportunity for transportation planners to “rejig” their networks in preparation for the return of trade. For example, now would be the time to remove bottlenecks such as delays caused by security processes at the Canadian and American borders.  Another infrastructure issue that needs work is the stretch of the Trans-Canada Highway between Woodstock, N.B., and Riviere du Loup, Que. Brooks says it’s difficult to talk about a national highway system if parts of the major trade corridor don’t handle traffic efficiently.

Dempsey points to the recent opening of Armour Transportation Systems’ new multi-dock loading facility in Dartmouth. Despite the downturn, he says, the company still chose to expand, adding that Armour will be ready to better serve existing customers and capture new ones when the economy becomes stronger. “Companies tend to look at the longer-term view,” he says, “and that’s what Armour has done.” 

Patrick Brannon, a research analyst at the Atlantic Provinces Economic Council, agrees the downturn is a prime time for companies to look forward. He believes Halifax can serve as a gateway or stopping point for exports being transported to eastern North America. Today’s economic climate means those plans may be delayed. “Some companies will struggle and fail during the recession, but the economy is resilient,” says Brannon. “We have to look long-term to make sure we’re positioned to capitalize on global opportunities.”