When Jeff McCaig talks trucking, folks sit up and take notice.

It’s always been that way with the McCaigs.

Jeff McCaig, CEO of Trimac Corporation, was weaned on the trucking industry.

His grandfather, Jack McCaig, was a trucking pioneer in Western Canada and founded the Moose Jaw, Sask., company that would become Trimac.

Larry MacDougal photos, Business Edge
Trimac CEO and president Jeff McCaig says taking the company private was an uphill battle, but was worth it.

His father, long-time Calgary entrepreneur Bud McCaig, followed in his father’s footsteps as CEO of Trimac, establishing the company as one of North America’s largest bulk-products trucking companies. Bud remains Trimac’s chairman.

Yet, Harvard grad Jeff McCaig carved out his own niche en route to the trucking industry, honing his business skills in his law firm before entering the Calgary-based business in 1983 to work under his father.

And it was Jeff McCaig’s background as a lawyer that helped him engineer his family’s $170- million buyout of the public company in 2000. 1. How were you influenced by your grandfather (Jack McCaig), who founded the company that today is called Trimac?

“My grandfather was a pioneer who immigrated from Scotland to Canada when he was, I think, 14 years old. I admire his pioneering spirit and entrepreneurial attitude. He started out farming and then saw the very early uses of trucks. In my mind, he was really a pioneer in the tank-truck industry back when the only kinds of trucks were flatbeds. But he started thinking that the storage containers could be turned sideways and strapped to the flatbed for moving the product. He was also just wonderful with people and it was obvious to me that he developed a very loyal following because he treated people so well.”

2. Can you also talk about the influence of your father (Bud McCaig), who, like you, followed in his father’s footsteps in the trucking business?

“My father is also an amazing individual. I think he left school when he was in Grade 10 and went to work with his father. Before long, he had his own fleet of trucks and became a partner with my grandfather. In the early ’50s, he took what was really a small business and developed it into a major Canadian enterprise. He, too, was very good with people. In life, the source of most of your problems is people, but the source of almost all of your successes is also people. I’m not sure if my father said that exactly, but that’s what he believed in.”

3. While attending Harvard College, did you see yourself eventually running the family business?



“It was probably in the back of my mind. I took economics as an undergraduate and really enjoyed it. I had an opportunity to work as a White House intern one summer (under the Richard Nixon administration) and that was pretty exciting stuff for a 20-year-old guy.

"It was the summer of ’72 – the summer that Watergate happened – although I didn’t know about that until later. My father advised me not to come into the business directly as he had done, but to work on my own. It was very good advice because it gave you a basis for developing confidence in your own skills without being part of a family enterprise where you don’t know if you’re there because you’re part of the family or if it’s because of your skills. After graduating, I articled with a Calgary law firm (MacKimmie Matthews). Then, I established my own firm and practised on my own for another two or three years. I think law is a good training for business. It helps you establish good mental and intellectual disciplines and self-confidence.”

4. So what eventually led you to join Trimac?

“My father (then Trimac CEO) had an illness that caused him to rethink what he wanted to do in the early ’80s. He thought I was ready to come into the business at that time (1984) and I felt I was ready too. I sold my practice, I went back to school (to complete a master of science in management degree in the Stanford Sloan program in California). Fortunately, my father recovered from that illness and he and I have been able to work together for a long time.”

5. What was the motivation for your family taking Trimac private in 2000?

“My style is consensus and we had the consensus that it was the right thing to do. At the time we went public, it was about the time the dot-com (stock market) bubble was starting to go in the other direction, but we were lumped into a category of companies called ‘old economy.’ At that time, those companies had low (price-earnings) multiples and some difficulty accessing capital markets sufficiently, notwithstanding what dot-com companies could get with barely a business plan. So our timing was good in that sense.”

6. How difficult was it to complete such a large deal?

“Our securities regulations and all the institutional infrastructure around that are designed for taking companies public, so in going the other direction of becoming private you really experience the sense of swimming upstream. Even the regulators take a view that if there are insiders trying to buy the stock of the company, they somehow have an advantage and the public has to be protected. With the safeguards in place, it was almost like we were dealing with widows and orphans. But it was anything but that, in our case. Our largest shareholders were very large sophisticated financial institutions and much larger and more sophisticated financially than we were. It was a very uphill battle for us, but we negotiated through it successfully.”

7. How much of the company do you personally own?

“It’s a little more complicated than me kind of flopping out a number. The easiest way to put it is that my father and I together own about 50 per cent.”

8. What have been the advantages of being private?

“You spend a lot less time on regulatory issues like the sales, marketing and promotion of the company to the public markets, to the analysts, and to the institutional and retail buyers. That’s necessary and, in the case of regulatory compliance, it’s required. But it doesn’t add any value to your actual business. So (being private) eliminates a whole layer of activity and those resources are freed up to focus on more value-added activities.”

9. How has Trimac fared during the economic downturn of recent years?

“We’re obviously very much affected by levels of activity in the economy and we serve a number of industrial sectors of the economy such as large chemical producers, large integrated petroleum companies and basic materials companies like cement, mining and forestry companies. So we went through some pretty lean years after the privatization, particularly in the year 2001. But we’re just now seeing some of our key industrial customers coming out of that and returning to some levels of growth. We started to see signs (of economic recovery) in the fourth quarter (2003).

“Now that we’re part way through the first quarter, it seems to be a little more sustained, so we’re hopeful that it is the sign of a more long-lasting upturn in the industrial side of the economy. Our industry is not a leading indicator (of the economy), but it is a contemporaneous indicator of economic activity.”

10. What’s your outlook for your business this year (2003 revenue was approximately $650 million)?

“We’re budgeting for about five-per-cent growth this year so we’re targeting about $670 million or $680 million (in revenue). In terms of our segment of the industry, the tank segment or bulk segment, we’re either the largest or the second-largest company (in North America), depending on where the dollar is trading (the other company is Florida-based Quality Distribution). Our major opportunity is through consolidation in the industry and we’re always looking for acquisitions.”

11. How has the surging Canadian dollar affected your business?

“That’s been a problem for us as it has been for most Canadian-based companies, in part because we keep our accounts in Canadian dollars. The value of our U.S.-value business, which is about half our business, is smaller in terms of Canadian dollars. The Canadian dollar was perennially weak, so in the past we put things in place for a declining Canadian dollar.”

12. So how do you counter the prospect of the Canadian dollar becoming even stronger against the U.S. dollar?

“If we have Canadian costs, we make sure our revenues are denominated in Canadian dollars and vice versa. If it’s U.S. dollar revenues, we make sure our costs are also in U.S. dollars. For example, if there’s a point that can be served from (neighbouring cities) Detroit or from Windsor, we serve it in a U.S. dollar account from Detroit rather than Windsor.”

13. Geographically, what was your hot market in 2003?

“Western Canada was by far our best market last year and in large part that was because of the strength of the oilpatch. The oilpatch was our best market from both a revenue and profit perspective last year. Our business in B.C. struggled last year. Our primary customers are the forestry industry and mining industries. Up until the fourth quarter, both those industries were struggling.”

14. What’s the trucking industry’s most difficult challenge in the future?

“There’s no question that it’s the shortage of qualified people, primarily drivers and independent contractors that own their own trucks. The industry has been through a real difficult period in terms of the difficult economy and the competition with the railroads, pipelines and other modes of shipping. So we just haven’t been attracting new people to the industry. Now, as we’re starting to grow again, we just don’t have the people. We are going to experience a severe shortage of qualified people.”

15. How serious is the problem?

“I don’t tend to want to cry wolf at this point, because if you do that too often, people won’t pay attention. I certainly don’t see it getting better any time soon. There’s not much we can do individually. People costs are our largest cost segment by far and, if we get our people costs above market, we’re just plain not competitive. Rates of pay have to go up to attract people and that means rates in transportation have to go up and those rates have been in a depression for quite a while. It’s going to take a major sea change to get rates going back in the other direction and to get some of those increased rates flowing to better compensation for the people doing the tough jobs out there.”

16. What’s your best advice for a young entrepreneur?

“Hard work, I guess. Just keep at it. You have to pick yourself up after every setback and be very focused.”

17. How important is money to you?

“It’s a scorekeeper and a facilitator of other things. That’s all it is. I’m not a very material-oriented guy. I don’t have jewelry or cars. I’m not at all extravagant.”

18. Do you think any of your children might one day continue the family tradition by following in your footsteps as CEO?

“That’s a possibility. I’ve considered it a real privilege to work with my father and it would be a wonderful thing for me if I could work with one or all of my (three) children at some point in their careers. It’s a very rewarding experience for a parent.”

19. How long do you plan to remain CEO?

“Not forever, that’s for sure. I think you make a very large percentage of the contribution and value-adding in the relatively early years of your tenure. I believe you need to make way for younger people and fresh ideas at some point. I’d say 10 years is kind of a maximum. Before I step down, I would like to see Trimac recognized as the standard by which customers and competitors measure safety, service and financial performance in the industry.”

20. What’s your most important goal beyond business?

“It’s family, and to make sure I’ve got the time and energy to do what I need to do to help my family succeed in their goals. I love the outdoors and fitness is a big issue with me, so I’d want to spend a lot of time outdoors. Any free time I have, I like to spend it at or around the mountains.”

IN PROFILE: Jeff McCaig
* Title: President/CEO/part owner, Trimac Corporation.
* Born/raised/age: Moose Jaw, Sask.; 52.
* Education: Canadian Junior College (Lausanne, Switzerland); Harvard College (Cambridge, Mass.), BA (cum laude), economics; Osgoode Hall Law School (Toronto), LLB; master of science, Stanford Sloan Program (Stanford, Calif.).
* Career: McCaig began his career with Trimac in 1983 as vice-president of planning and corporate development, and held various senior management positions within the company until being named president and CEO in 2001. Prior to joining Trimac, he was owner of the law firm Jeffrey J. McCaig Professional Corp.
* Pastimes: Fitness, mountains.

THE COMPANY: Trimac Corp.
* Brass: Jeff McCaig, president/CEO; Bud McCaig, chairman; Terry Owen, executive vice-president; Edward Malysa, chief financial officer.
* Profile: Trimac is one of North America's largest bulk-products trucking companies, operating 3,100 tractors and 5,700 trailers through Trimac Transportation Systems. The privately held company also provides supply-chain management and services through its subsidiary, Trimac Logistics Services.
* 2003 Revenue: Approx. $650 million.
* Accolades: Trimac is a seven-time winner of the National Tank Truck Carriers safety award.
* Website/e-mail: www.trimac.com ; info@trimac.com
* Head Office: P.O. Box 3500, 2100,-800 5th Ave. S.W., Calgary, T2P 2P9.
* Phone/Fax: 403-298-5100/ 403-298-5146.