Selling a tanker and bulk carrier in Canada

An owner who has decided to sell a tanker or bulk carrier can gather the records a buyer may ask for: trailer records, driver certificates and the carrier’s safety history. Anything missing or out of date is something a buyer can ask about. This guide sets out the sequence, what the safety regulators need, how to keep the sale quiet and what buyers may request.

Sequence: file first, market second

Pull your own safety record before anyone else does. In Ontario, the province describes a CVOR abstract as a summary of a carrier’s safety performance, including collisions, convictions and inspections. Read it as a buyer would and fix what can be fixed. Then gather trailer records, contracts and driver files. Only then decide on structure and approach buyers.

What the regulator needs from you

Start with the safety regulator in your home province and ask what applies to your registration. Ontario’s CVOR program tells operators to notify the Ministry of Transportation immediately about changes such as changes in corporate officers, and it reviews information including business ownership structure. In Alberta, the province says changes to a carrier’s operating status may require compliance with different regulatory requirements. If your trucks cross provincial or international lines, Transport Canada notes that federally regulated extra-provincial carriers need a safety fitness certificate. Ask the regulator, before signing, what a change of ownership triggers. Ontario also tells operators to keep their CVOR information up to date and to carry the certificate, or a copy, in each commercial motor vehicle operated under it.

Share sale or asset sale

The structure decides what moves and what stays. A share sale transfers the company; an asset sale transfers the assets the parties agree on. Ask the regulator what each structure means for your registration, including whether a buyer would need to apply for its own and whether a registration can transfer at all. The asset purchase agreement entry explains how an asset deal is documented. Ontario repealed its Bulk Sales Act on March 22, 2017. Ask your lawyer whether any bulk sales rules apply in the other provinces where you operate.

Confidentiality

Think about how drivers, customers and the plant that supplies your loads would hear of a sale. Use a non-disclosure agreement before sharing names, contracts or the safety file. Consider releasing customer identities late, and only to a buyer who has shown it can close. For a dangerous-goods carrier, a customer’s own approval process may be triggered by learning about a sale, so decide who tells which customer, and when.

Getting trailers and equipment ready

A buyer may look at each trailer as an asset with a history. Gather identification, the product each unit is cleared for, the dates of its last tests and any repairs, and who performed them. The Transportation of Dangerous Goods Act applies to those who design, manufacture, repair, test or equip a means of containment, so a repair shop’s records are part of your file. Fix small gaps now, such as missing certificates or unsigned inspection records, because a gap you correct before listing is a question you will not have to answer under time pressure.

If any trailer is near a test date, decide before listing whether to do the work or to disclose it and let the price absorb it. Either choice is fair, but a surprise is not.

Customers, drivers and timing

Read your largest customer contracts for assignment, change-of-control and approved-carrier terms, and decide how you will approach each customer. Prepare driver files showing the training each driver holds. A seller who knows which drivers will stay, and can say so, may give a buyer something to rely on. Plan the timing of the sale around your own renewal dates, test schedules and any pending audit, so that the buyer sees a stable file instead of a moving one. Ask your lawyer how long a regulator may take to process a change, and build that time into the closing date.

What buyers may ask for

• Your safety record and any audits, interventions or sanctions in it
• Trailer records showing the testing and compliance status of each unit
• Evidence that the dangerous-goods requirements that apply to your loads are met, including any emergency response assistance plan the Act requires for your loads
• Customer contracts and any consent or approved-carrier terms
• Driver certification and training files

Telling the right people at the right time

Decide the order in which people hear about the sale. Decide whether and when to tell your lender and insurer, since either may have a role in the closing. Ask your lawyer which customers and regulators must be told before closing and which can be told after, and write the plan down. Drivers may hear of a sale from someone else if the owner does not tell them first.

A general trucking sale raises overlapping questions, covered in selling a trucking business.