What if the courier company I’m buying depends on one big carrier contract?
Treat the contract as the business. Read its assignment, change-of-control, renewal and termination terms, look at how the rates have changed, ask the carrier early about its view of a new owner, and talk to your lawyer about conditions or a structure that shares the risk.
Some courier companies are, in effect, a set of routes run for one national carrier or postal contract. That can be steady work. It also means a single document and a single customer decide the future of the business. If you are looking at one, the question is less about trucks and drivers and more about what the contract allows and what the carrier will do.
Read the contract itself
Ask for the full agreement and every amendment. Look for what it says about assigning the contract, a change in who owns the company, renewal, and ending it with notice. Do not rely on the seller’s summary or on how things have worked in practice. Your lawyer should read it, because the exact wording decides what is possible.
Look at rate history and the relationship
Ask how the carrier’s rates have changed over the years, how rate changes were communicated, and whether any routes were reduced or moved. Find out who at the carrier manages the relationship and whether it depends on the current owner personally. A relationship that lives in one person’s phone does not transfer on its own.
Ask the carrier early, and plan for the risk
The carrier may need to consent, so raise it early and with the seller’s agreement. Ask your lawyer whether to make consent a condition of closing. Others discuss with their lawyer a structure where part of the payment depends on the contract continuing. Neither is a promise of protection, and no carrier’s terms should be assumed.
For the wider picture, see what to know before buying a logistics or courier business.
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Financing
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Transport CanadaGovernmentMotor carriers, commercial vehicles and drivers
- 04Government of Canada (Department of Justice)GovernmentMotor Vehicle Transport Act (R.S.C., 1985, c. 29 (3rd Supp.))
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