What is a refrigerated carrier worth?

A refrigerated carrier hauls freight that has to stay at a set temperature, so a buyer has more to check than trucks and lanes. Ask whether the business can show that cold freight arrived in condition, load after load, and whether the equipment and people that kept it cold will still be there after closing. A general freight carrier is covered in what a trucking business is worth. This page looks at what to examine in a reefer fleet, how earnings get recast, and what to compare between carriers. It gives no price and no multiple.

What a buyer is paying for

Start with the cold-chain record: ask for the history of loads delivered at the right temperature and any excursion claims on file. Then look at the reefer units themselves, the drivers who handle set-points and pre-trip checks, and the lanes the trailers run. If any of the carrier’s accounts are food shippers that audit carriers before they can bid, the carrier’s approved status with them is part of what is being bought. Ask the owner which accounts require an audit and when each was last passed. Those answers show how much of the revenue depends on the carrier staying approved with those shippers.

The record that holds the value

Check how each claim for spoiled freight was resolved and whether it points to a pattern. Safety records matter too. In Ontario, a carrier’s public CVOR abstract summarizes its record for a two-year period, and the carrier-only version gives detailed collision, conviction and inspection data for a five-year period, according to the Government of Ontario. Elsewhere, ask what record the carrier’s own province holds; Alberta, for example, issues Safety Fitness Certificates for carriers. Ask for the cold-chain file and the safety record both.

Reefer units and the cost of keeping them cold

Check the condition of the refrigeration units on every trailer. The Heating, Refrigeration and Air Conditioning Institute of Canada advocates that refrigeration processes be designed, installed and serviced by qualified professionals, so ask whether each unit has a documented service history from one. Ask for the age of every unit, not a fleet average. If many compressors will reach overhaul in the same window, that is a capital cost to price into any offer. Ask whether the fleet runs on a maintenance and monitoring program or is run until a unit fails.

How earnings get recast

A seller’s reported profit is a starting point. Recasting asks what the business earns under a new owner. Look at owner pay against what a hired manager would cost, claims paid in the period and whether they will recur, and maintenance that was deferred to flatter a year. Check whether the freight rates in the books cover current fuel and the extra cost of running refrigeration units, since a contract signed under different conditions can look better than it is. Where a claim was paid, find out whether it was a one-off or a symptom, because the recast treats those two differently. Ask the accountant who prepared the statements to show how each adjustment was reached, so you can test it against the underlying invoices rather than accept it on trust.

What to compare between carriers

Customer concentration is one point to compare: ask how much revenue depends on one food distributor or grocery account. Scope of operation is another. Transport Canada says the federal government only has authority over extra-provincial truck and bus carriers that carry goods or passengers across a provincial or international boundary, and that provincial and territorial regulations otherwise govern the industry (the Motor Vehicle Transport Act lets provinces and territories regulate extra-provincial carriers on the federal government’s behalf), so a carrier crossing those lines is also subject to the federal rules for extra-provincial carriers. Then there is whether the business only hauls food or also handles it. The Safe Food for Canadians Regulations do not apply to a person whose sole concern is conveying a food commodity, subject to exceptions, but a carrier that does more may be treated differently, so ask the Canadian Food Inspection Agency.

• Ask for the claims file for the past several years and the status of every open claim, not a summary.
• List each reefer unit with its age, last service date and who serviced it.
• Request the CVOR or provincial safety record the carrier holds, and read it before you read the financials.
• Split revenue by customer and by lane, then ask which shipper audits the carrier has passed and when.
• Recast owner pay, fuel, deferred maintenance and one-off claims line by line.