Dicom

Planting Seeds for Smart, Successful Growth
Dicom adds talent, eyes new markets for transportation services

Scott Dobak is not a man who lacks for confidence.

In fact, the newly-installed CEO of the Dicom Transportation Group is barely short of ebullient when it comes to providing a crystal-ball forecast for the Montreal-based service provider – whose reins he took over when it was acquired in late February.

“We’re looking at a lot of different ways to grow,” he said. “We think we’ve got a very competitive and well-run company, and the more that we can leverage those key attributes in the future, we think the upside potential is just tremendous.”

But a key element of fulfilling that potential, he concedes, is bringing on more of the right people.

Toward that end, Dobak said Dicom will continue an initiative that’s seen it reach out across all industries to recruit the best of the best to augment its existing leadership roster.

“It’s just critical to the overall growth plan that we have people who have the skill sets to take a company that looks to grow aggressively,” he said. “Any company who’s attempting to grow and doesn’t have the top level of talent – or the A players in the industry – are really going to impede their ability to go out and grow in the marketplace. But if you have the very top talent, I truly believe that your opportunity to meet and exceed your goals is unlimited.”

Dobak arrived when Dicom – which was founded by Peter Overing in 1974 – was acquired by Wind Point Partners, a Chicago-based private equity investment firm that partners with top-caliber CEOs to acquire middle-market businesses where it “can establish a clear path to value creation.”

The wrinkle-free partnership between the new parent company and Dobak, he said, has made the transition an easy one. He had been president of the LTL (less-than-truckload) and TMS (transportation management services) divisions at RoadRunner Transportation and was previously with YRC Inc., which operates in Canada, the United States and Mexico.

“Everybody is moving in the same direction,” he said.“This isn’t your typical relationship where you meet once per quarter and all they want to do is look at your financials and send you on your way. They are very, very good about providing resources and insight and guidance where needed. They allow you to run the business. They will tell you from day one they’re not operators.”

At the time of the acquisition, Wind Point said Dicom generates “approximately $175 million in annual sales.”

“They’re very good at helping support management teams,” Dobak said.“And they go out and provide any kind of value that they can to help you achieve the goals that we’re really trying to get to.”

Dicom employs approximately 700 drivers – which includes both paid staff employees and those supplied via broker partners – and operates in and out of 23 terminals across Ontario and Quebec. Corporate headquarters are in Montreal, though a move is planned in September to a new state-of-the-art facility about two blocks away from the existing building.

The company’s vehicle assets include 160 tractors and480 trailers and are generally operated by the employee drivers, while broker drivers – who mostly handle the company’s small-pack and courier services – supply their own equipment. Dicom operates directly via the terminal facilities in its two base provinces and provides services through partnerships to provinces west and east of that base.

A typical customer, Dobak said, is a small to mid-sized business with a single shipping location that’s sending and receiving both small-pack/courier shipments and the traditional freight typically handled by an entity like UPS or FedEx, along with less-than-truckload shipments.

In fact, the company is actually comprised of three distinct divisions – Dicom Express, which handles small-pack/courier needs; GoJiT, which is the LTL-centric entity; and JiT24.7, a third-party logistics function that works with major corporate accounts like L’Oreal, John Deere and Harley-Davidson.

Being around such significant players, it seems, can provide improvement by osmosis.

“If you have certain core customers that push you or ask you to do things that really take you out of your comfort zone, I truly believe it makes us a better company,” Dobak said.“You can’t just do it for three customers and then operate the rest of your business in a different manner. You have to be able to go out and make that your standard operating procedure. It’s allowed us to differentiate ourselves.”

The express business was the original offering and contributes roughly half of Dicom’s overall revenue, while the LTL division came on-board in the late 1980s and third-party logistics offerings began in mid-2005. Revenue in the latter two divisions is “pretty even” in comprising the other 50 percent.

“We’re building the model, since the acquisition, to have growth in all three,” he said.

“We really feellike there’s a huge opportunity to grow the Dicom Express division even further. We see a lot of upside opportunity for growth there, along with our third-party solutions division. We think that some of the things that we’ve been able to do for some major corporate accounts can be replicated and taken out to other customers.”

And those customers, Dobak said, don’t necessarily need to reside up north.

The company is looking into opportunities to grow its LTL and full-truckload offerings into cross-border markets, driven by the idea that what they have to offer isn’t just for Canadians – and that it doesn’t need to be solely accomplished through expanding the existing customer base.

“I don’t think we have to just be indigenous to Canada going forward,” he said.

“With the value proposition we have, there’s a lot of upside opportunities to look at other parts of North America. And that growth, both within the existing Canadian footprint – plus with expansion into other regions – will be both organic growth and also potential M&A activity. It’s not going to be a one-dimensional strategy. It’ll be use trying to grow with our existing customers and then looking at M&A where it can enhance our existing footprint or allow us to get into markets we’re not in today.”

 AT A GLANCE

WHO: Dicom Transportation Group

WHAT: Three-pronged operation comprised of Dicom Express (small-pack courier service), GoJiT (expedited shipping by LTL truck service) and JiT24.7 (third-party logistics service)

WHERE: Corporate headquarters in Montreal; 23 terminals across Ontario and Quebec
WEBSITE: www.DicomExpress.com