Best Managed Companies

Cando Rail Services: Canada’s Best Managed Companies 2017

Canada’s Best Managed Companies

Gord Peters wanted a way out of the oilpatch. On a lark, with no experience or equipment, he and friend Rick Hammond bid on two contracts to dismantle some of the small abandoned Canadian Pacific Railway (CPR) lines in Manitoba. To their surprise, they won—and secured a loan from Peters’ father to buy equipment and start Cando Contracting Ltd.

Thirty years after that haphazard launch, CEO Brian Cornick says there’s a lot more strategy in play. He joined the newly rebranded Cando Rail Services in 2015 to lead the company’s shift into rail optimization, a catch-all term for services that help rail lines and their clients move goods more efficiently.

“Network optimization problems are all the same,” Cornick says. “It doesn’t matter if it’s an IT or a rail network. [The problems involve] not enough throughputs, not enough bandwidth, delays, holding periods.”

Cando Rail Services’ manufacturing facility

Cando Rail Services’ railcar repair facility. (Janine Kropla)

Cando exists to clear the clogs. One example: Mining outfit Mosaic’s Esterhazy potash site in Saskatchewan traditionally paid CPR a premium to travel 35 kilometres off its main line to pick up minerals bound for Vancouver, leaving Mosaic with high shipping costs and at the behest of CPR’s schedules.

Enter Cando. The company leased sole running rights to the track from CPR and starting hauling loads to the nearest CPR pickup location. Mosaic’s goods move faster; CPR can focus on more profitable runs. The railway and Mosaic split the cost of Cando’s fees.

Cando has brokered deals like this across the country with CPR and Canadian National Railway (CN), and it now owns three short-line railways. In 2016, the firm hauled $19.7 billion in goods, including potash, paper, oil and cars.

It’s the kind of work that depends on employees who love solving problems—and feel comfortable pitching new ideas. In fact, Cando’s idea to introduce a suite of complementary logistics services (including warehousing, loading services, and railcar storage and repair) came not from Cornick but from an employee. “We hire a lot of ex-CN and ex-CPR people who know the problems that exist in the industry,” Cornick says. “All we do is come up with better ways to handle them.”

Such a democratic approach stems in part from the way the business is structured—current and retired employees own 60% of Cando, making its fate very personal—but also from Cornick’s open-door leadership (he encourages all employees to email him anytime about anything). “Everyone has a voice in this company,” he says. “We encourage things to percolate right up.”