Buying a refrigerated carrier in Canada

Buying a refrigerated carrier means taking over a regulated trucking operation that other people’s food depends on. Two questions come before price. First, what do you personally or through your company have to hold to operate, and does any of it fail to transfer from the seller? Second, does the business have the record and equipment that its revenue assumes? A buyer evaluating a general carrier can find a starting point in buying a trucking business in Canada. A reefer carrier adds the cold-chain side.

What you must qualify for yourself

Carrier rules depend on whether the carrier is extra-provincial. Transport Canada says the federal government only has authority over extra-provincial truck and bus carriers, and that provincial and territorial regulations otherwise govern the industry. Under the Motor Vehicle Transport Act, an extra-provincial truck undertaking is one, for the transport of goods by motor vehicle other than a bus, that connects a province with another province or extends beyond a province’s limits. Find out which applies to the business you are buying, then ask the regulator what your company must hold. Alberta, for example, lists insurance coverage required by the Commercial Vehicle Certificate and Insurance Regulation among the information needed to renew a Safety Fitness Certificate. Confirm that a certificate will not lapse on closing. If the deal is an asset purchase, ask the regulator whether your company needs its own certificate before it runs a load, how long that takes and whether the seller’s records can support the application.

Whether a food licence is in play

The Canadian Food Inspection Agency says certain food businesses need a licence under the Safe Food for Canadians Regulations. The Regulations say they do not apply to a person who conveys a food commodity if their sole concern is its conveyance, subject to exceptions. So ask the seller, in writing, whether the carrier holds a licence, what activities it covers, and why. If the carrier stores or handles food rather than only moving it, ask the Canadian Food Inspection Agency whether your own application or a licence amendment would be needed before you can run the same business, and how changes are made, and do not close on the assumption that a licence can be sorted out afterwards.

What a good one looks like

Ask the seller to show the cold-chain record in documents rather than by assurance. Look for temperature data kept for loads, claims closed with a clear cause, and reefer units serviced on a schedule. The Regulations require an operator to run its establishment so that any conveyance used to convey a food to or from it, and loaded or unloaded there, is capable of maintaining temperature and humidity at levels appropriate for the food and, if necessary to prevent contamination of the food, equipped with instruments that control, indicate and record them. Ask whether the fleet meets that standard for any shipper’s establishment where it applies. Where the standard does not apply, ask for the shipper contracts and read the temperature clauses. A clause that makes the carrier liable for the full value of a load is a different exposure from one that caps liability, and it is better to learn which you have before closing than after the first claim.

What the seller may not volunteer

Ask the seller to walk through the weakest year, any informal rate promise, and any shipper audit that came close to failing. Ask how much revenue comes from the top account, whether any shipper has ever put the carrier on notice, and whether any trailer has been run past its planned service. Ask which drivers hold the shipper relationships personally. Ask also how long the dispatch and maintenance leads have been in place and whether any of them has said they would leave after a sale. A driver who is the only contact for a grocery account is a retention question that sits outside the fleet list. Ask too how the carrier handles a breakdown with a loaded trailer: who is called, how quickly a replacement unit can be dispatched, and whether that has ever failed. Ask to ride along on a few routes or sit in the dispatch office for a day if the seller will allow it.

• Confirm with the regulator what certificates and insurance your own company must hold at closing.
• Ask in writing whether a food licence is held, its scope and its conditions.
• Request temperature records and closed-claim files for a meaningful period, not a summary.
• Get age, service history and remaining life for each reefer unit.
• Ask which shippers require approved-carrier status and whether it survives a change of owner.