The global logistics and transportation market is the backbone of receiving goods – after all, the industry moves consumer goods from one location to the next – and companies such as Titanium Transportation Group (TSX:TTNM) are leading the charge in North America.
Image credit: Titanium Transportation
Globally speaking, the logistics and transportation industry is estimated to have been valued at US$7.98 trillion in 2022 and is projected to reach $18.23 trillion by 2030, growing at a compound annual growth rate of 10.7 per cent during the forecast period.
In North America alone, the logistics market was worth $1.97 trillion in 2022.
Broadly speaking, logistics is the arrangement of transporting goods from the point of origin to the point of consumption and is experiencing a shift in implementing technologies for a more streamlined process such as the Internet of Things (IoT), artificial intelligence (AI), robotics and machine learning to improve efficiency.
So, where does Titanium Transportation Group fit in?
With its headquarters out of Bolton, Ontario, Titanium Transportation provides general truckload, dedicated fleet, cross-border and domestic trucking and logistics services, and warehousing and distribution to more than 1,000 customers.
As the need for effective logistics and transportation services continues to grow – fueled in large part by the e-commerce industry – Titanium Transportation Group has been making technological advancements to drive increased market share to meet demand, making it a company for investors to watch.
Titanium Transportation Group at a glance
Titanium Transportation is a North American-based transportation company with asset-based trucking operations and logistics brokerage services across Canada and the United States.
In an interview with The Market Online Ted Daniel, CEO of Titanium Transportation explained that Titanium is a hybrid business, with approximately 50% of revenue coming from the company’s trucking assets, while 50% come from logistics brokerage, which is asset light.
As it currently stands, the company has roughly 900 power units, 3,000 trailers and 1,300 employees and independent owner/operators servicing its two segments.
Between its truckload, cross-border trucking services, logistics, warehousing and distribution, the company services more than 1,000 customers and owns more than 100,000 square feet of warehouse space.
Daniel also explained the company has 10 terminals that are asset-based – two in the U.S. in Georgia and Alabama – and its main terminal in Bolton and several others across Southern Ontario.
Meanwhile, its logistics brokerage segment is where its technology and people take the freight and arrange it to be moved through digital networks.
In terms of its brokerage locations, Daniel told The Market Online that it has locations in Bolton, Ontario, its largest in Canada, Montreal, Quebec and Windsor, Ontario, with several others across the southeastern United States, including Charlotte, North Carolina; Nashville, Tennessee; Atlanta, Georgia; Jacksonville, Florida; Fayetteville, Arkansas; Denver, Colorado; and Chicago, Illinois. Daniel added that the company is in the process of opening additional brokerage locations.
The Titanium Transportation advantage
One of the key things that makes Titanium Transportation stand out from its peers is its strategic acquisitions.
“[The company] makes sure that a lot of the boxes are checked, and we integrate,” Daniel told The Market Online, adding that the reason for integrating other companies into its culture is to “help people improve their lives.”
Case in point, last year, the company made its first U.S.-based acquisition of Crane Transport, expanding the company’s footprint in North America by adding roughly 200 U.S.-based trucks through the two terminals in Georgia and Alabama.
Since 2011, the company has made 13 acquisitions totaling $186.5 million, while its acquisition of Crane Transport totaled $45.4 million alone.
(Source: Titanium Transportation)
“The acquisition will allow us to expand our presence across the United States through our new strategically located terminals in Georgia and Alabama, expanding our service offerings and enabling us to offer a wide range of services including end-to-end supply chain and freight management solutions to our existing customers,” Daniel said in a statement. “With the addition of Crane Transport, we see multiple near-term opportunities to enhance profitability, as well as longer-term opportunities to optimize equipment and technology towards continued growth and shareholder value creation.”
Titanium Transportation growth strategy and outlook
Since its establishment in 2002, Titanium Transportation has expanded its presence to 18 North American locations and targets expansion to 20 by the end of this year.
In the past 13 years, the company has been recognized as a purchaser of asset-based trucking companies with 13 completed transactions since 2011.
The company also revealed in July 2023 its seventh U.S. brokerage location in Jacksonville that will help the company expand its customer base in the U.S.
“Brokerage services continue to be an attractive driver of our business and we are committed to strategically expanding our footprint. Jacksonville has a strong manufacturing sector with proximity to the I-95 and I-10 corridor, making it an ideal location for expansion. By leveraging our technology and systems, in addition to low start-up costs, our U.S. brokerage expansion will drive strong return on invested capital and organic growth,” Daniel said in a statement.
Moving forward, Daniel told The Market Online that the company hopes to achieve its 10-office goal in its brokerage segment in the U.S. within the next 18 months.
“I believe that’s very achievable,” he explained, “and one of the reasons it’s achievable is it’s a combination of geography and the people to be able to take over that office.”
The executive team
Ted Daniel, CEO
Ted Daniel, CA/CPA founded Titanium Transportation in 2002 and has led the company from start-up to $500 million in revenue, including a U.S. expansion and 13 acquisitions.
Prior to his role with Titanium Transportation, Daniel led a range of turnarounds and restructurings as CFO for more than 10 years. This also included a three-year stint as CFO of a mid-sized transportation company.
Daniel is a chartered accountant and holds a BA in computer science and an Honours BBA from York University.
Lu Galasso, Chairman of the Board of Directors
Lu Galasso, B. Comm., CA, CPA, is a partner with the Zzen Group of Companies in Vaughan, Ontario, that owns and operates companies in land development, real estate, services, hospitality, and manufacturing sectors. Prior to Zzen Group, Galasso was a vice president of Royal Group and a contributing member of the Royal Group’s “going public” transaction and acquisition teams.
Galasso completed the Directors Education Program at the University of Toronto’s Rotman School of Management. He is the president of the Meta Foundation, a charitable organization dedicated to people with special needs, and is a director and fundraiser for the St. Christopher Children’s Home.
David Bradley, non-executive Director
For more than three decades, Bradley was the voice of trucking across Ontario and other regions of Canada until his retirement in 2017 as CEO of the Canadian Trucking Alliance and the Ontario Trucking Association.
Bradley was responsible for leading several key industry policy initiatives including the introduction of mandatory speed limiter activation, a universal ELD mandate and mandatory entry-level training for truck drivers.
Bradley is also a fellow of the Chartered Institute of Logistics and Transportation and serves on the Board of Directors of Hamilton-Oshawa Port Authority, Great Lakes Port Management Inc., and he is past chairman of the Ontario Highway Transport Board. He is a recipient of the Ontario National Transportation Week Person of the Year Award, the Ontario Ministry of Transportation Road User Safety Divisional Partnership Award and the OTA Service to Industry Award.
The investment corner
As of the time of this writing, Titanium Transportation has a market cap of C$99.4 million, a share price of $2.21, 44.77 million shares outstanding and pays a quarterly dividend.
Daniel told The Market Online that with new trucks coming online in the next year or so, this puts the company in a large positive free cash flow and debt repayment position, which means the company’s debt will “come down significantly.”
“We’ll become cash rich, and we’ll have the money to do our next acquisition, which is the goal,” he said.
In other words, the company sees mergers and acquisitions (M&A) as crucial components to its growth trajectory.
With future acquisitions on the horizon, the company has options for inorganic growth and, in turn, solid returns for its investors.
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