From regional paper hauler to national transportation, logistics and distribution brand
XTL Group is celebrating its 40th anniversary March 18, having grown from humble roots hauling paper rolls to establishing itself as the 24th largest Canadian trucking company with strong supporting logistics and distribution operations.
And it got there the old-fashioned way, mostly through organic growth. Craig Germain, the company’s chief operating officer, has been there for 38 of those 40 years and recalled the early years in a recent interview with TruckNews.com.
XTL was borne from the Glengarry Transport Group, founded by present-day owner Serge Gagnon, who “put himself in a position to buy the company out from the previous owner,” Germain explained.
It started out as a regional carrier in Ontario and Quebec, that found its niche hauling paper products on multi-axle trailers from Northern Ontario and Quebec to Montreal and Toronto, where they were transloaded for delivery into the U.S. on tandem trailers.
“XTL was lean, even sustainable, in the early days,” Germain said. “Our ability to use multi-axle equipment and then get it as close to its ultimate destination as possible, transload it and put it on tandems to comply with U.S. requirements was really a key to XTL’s early growth.”
XTL would bring consumer products back north and as the paper industry declined, its consumer goods business thrived.
Today, it operates 500 power units, 1,300 trailers and has more than 2.5 million square feet of warehousing space across the country. It has achieved that scale having done only two acquisitions – both in 2021, when it added Quebec-based Savoie Express, a small regional reefer fleet – and a Georgia-based logistics company, CBT, giving it a U.S. footprint.
Much of XTL’s growth has come during challenging times for the industry, including the past five years or so when it has added major distribution centers to its network, in B.C. (2019), Balzac, Alta., (2022), and most recently, a 375,000 sq.-ft. DC in Valleyfield, Que., last year.
“Each step has been a deliberate move to broaden our capabilities and fuel long-term success,” said Gagnon.
The move west was key, because it was done at the request of a long-time customer, Germain noted.
Customer steers XTL west
“In 2007, just before the financial crisis in the U.S., our largest customer – a big box retailer we were servicing in the province of Quebec – wanted us to expand our horizons and move west for them,” he said. “We initially rejected that opportunity, citing we’re a regional Eastern-based company and very good at that, and not prepared to move west. They asked us a couple more times to the point we said, why not? And the timing was really good because our U.S. cross-border business was impacted hard by the financial crisis and we were able to redeploy some equipment, get better utilization and expand our footprint.”
XTL had similar success – and fortuitous timing — when it branched out previously to add a third-party logistics offering in 2002.
“Our fleet was, for lack of a better term, oversold at that time,” Germain recalled. “We maximized our assets the best we could, but we were missing opportunities to expand and customers wanted us to do more. You can’t increase your fleet as quickly as you can manage transportation beyond your fleet, and that was the start of XTL Logistics. Fast-forward 23 years and it’s grown to be a strong complimentary entity of the XTL Group.”
3 pillars of XTL Group
The company’s three pillars – trucking, logistics and distribution – are all in growth mode, though growth looks different for each entity. Since 2018 it’s the distribution business that has led XTL’s growth. While Germain sees further growth for each of the three segments, he admitted the transport business XTL was built on is the most challenged, due to reasons beyond its control.
“We will grow modestly on the transport side, but the trust level of the current transport market is of concern,” he said, specifying the Driver Inc. crisis — a broad term covering the misclassification of drivers — as a challenge that needs to be addressed.
“Definitely, the transport industry has to get back to a level of strength, of safety, of proper accounting and payroll practices,” he said. “We’ve got to clean up the transport industry.”
Asked if XTL’s brokerage business utilizes Driver Inc. carriers, Germain said “Absolutely not. We do a good job of vetting and qualifying our carriers and we want to maintain that discipline and standard.”
Driver misclassification isn’t the only current challenge keeping XTL management on its toes. The morning of our visit, the company lost cross-border shipments from a Canadian customer who chose to go domestic only due to the threat of tariffs against its products.
Germain said at such times, XTL’s ability to quickly pivot is a benefit. About 30% of its business is now cross-border. While that’s a sizeable portion of a 500-truck fleet, Germain said “One thing that XTL has done successfully on the fleet side is, we’ve continued to grow and expand our dedicated and local domestic operations. At the end of the day we’ll decide where we can best utilize our fleet, and that distribution business has really helped leverage and grow that local and dedicated component.”
‘Our people are everything’
As it looks to write the next chapters in its story, Germain is confident XTL has the right people in place to drive future growth and weather any looming storms. Gagnon is still very much involved in the business, his son Eric oversees its Ontario distribution center network and daughter Stephanie runs the B.C. and Alberta operations from Vancouver.
Many other employees – from the front lines to the executive suites – have been with the company for decades, Germain added.
“Our people are everything,” he said. “I’m so proud of the people that I’ve been fortunate enough to either introduce to the organization or have come to our organization and watched them grow over the years. There’s nothing that gives me more pride. So, I feel good about the future of XTL.”
Noting that much of XTL’s growth has come during tumultuous economic times (preceding the Great Recession with its move west and growing its distribution business through the Covid boom and bust), I asked if the company’s leaders are risk-takers.
“I would say calculated risk-takers,” Germain replied. “We have to see the real value [to invest], it’s not risk for the sake of taking risks.”
The company will be celebrating its 40-year milestone with employees through small events throughout the year.
