Buying a tanker and bulk carrier in Canada

Someone weighing a tanker or bulk carrier is buying a set of trailers and the right to keep operating them. Check that its registrations are in good standing, its drivers are qualified and its equipment meets the rules for the product it carries. This guide covers what a sound carrier looks like, what a seller may not volunteer and what you must qualify for yourself.

What a sound carrier looks like

A sound carrier can show its work. The safety record is on file and explainable, and the trailers have documented testing and compliance status. Customers are spread across more than one plant, or a single large customer has a contract that survives a change of owner. In Ontario the safety rating is public, and the province states that an “Unsatisfactory” rating suspends or cancels operating privileges throughout Canada, so a carrier with a clean rating has one fewer thing to explain. Ask to see all of it before you discuss price.

What a seller may not volunteer

Ask the seller what the sale materials leave out. Ask about releases or near misses and who reported them, since the Transportation of Dangerous Goods Act imposes a duty to report certain releases on the person with charge, management or control of the means of containment. Ask which trailers are due for testing and when. Ask who actually holds the product certifications and whether they sit with the company or with individual drivers. Ask what happens to the largest contract if the owner changes.

What you must qualify for yourself

Check your own position before you negotiate. Ontario’s CVOR program reviews business ownership structure and tells operators to notify the Ministry of Transportation immediately of changes such as changes in corporate officers, so ask the regulator what it will want to know about you as the new owner. Ask the same of Alberta, which says changes in operating status may bring different requirements, and of Transport Canada if the carrier crosses provincial or international lines. Under the Transportation of Dangerous Goods Act, the regulations can set requirements for training and registration, so read those regulations for the product you will haul.

Reading the safety record as a buyer

In Ontario the safety rating is available to the public, and the province reviews information such as the carrier’s safety rating, interventions such as audits and sanctions, and business ownership structure. Ontario assigns every operator one of four ratings based on safety performance: Satisfactory, Satisfactory—unaudited, Conditional and Unsatisfactory. Read the record for patterns, not only the current rating: repeated inspection findings, a facility audit that found problems, or convictions against the operator or its drivers. Ask the seller what was done about each one and ask for the documents that show it.

In Alberta, the province notes that changes to a carrier’s operating status may require compliance with different regulatory requirements. Ask the regulator in the carrier’s home province how its audit and rating system works, and what a new owner starts with.

Drivers and people

Dangerous-goods training is a requirement that regulations can attach to people, not a feature of the business. Ask how many drivers hold current training, when each expires and what the carrier has done to bring new drivers up to the standard. A buyer who closes without a plan for this can own trailers that nobody is qualified to run. Ask also whether key drivers and the dispatcher intend to stay, and what the customer thinks of them.

• Get the safety record from the regulator, not only from the seller
• Ask for trailer testing dates and the product each trailer is cleared for
• Confirm who holds each product certification
• Read any customer contract for consent, approved-carrier and termination terms
• Confirm your own eligibility to hold the registration before you sign

Equipment and yard

Visit the yard before you form a view. Look at how trailers are stored, cleaned and maintained, and whether the maintenance records match what you see. A clean, well-run yard does not prove compliance, but a neglected one is a reason to look harder. Ask who services the trailers and whether those shops hold records of their work, since the Transportation of Dangerous Goods Act applies to those who repair, test or equip a means of containment.

Customers and contracts

Ask for the three or four largest customer relationships in detail: how long each has run, how it was won, who at the customer deals with the carrier and what the contract says about assignment and termination. A customer that must approve a new carrier can hold up a closing, so ask the seller to introduce you early, and ask your lawyer how to do that without breaching confidentiality. If one plant is most of the revenue, treat that plant as a party to your decision.

For the wider trucking checklist, see buying a trucking business.