Operations

Company Succeeds On Cost-Saving Strategies

Martin Romjue
Posted on November 16, 2018
Owners Jeff and Laura Canady have grown their motorcoach operation to the point where they have a separate company, SC Coach Charter & Tours, with a fleet of 12 buses. (photos by Martin Romjue/LCT)
Owners Jeff and Laura Canady have grown their motorcoach operation to the point where they have a separate company, SC Coach Charter & Tours, with a fleet of 12 buses. (photos by Martin Romjue/LCT)

CHARLOTTE, N.C. / AIKEN, S.C. — Growing client revenue throws up challenges for even the best of operators now, as tech-driven services saturate the ground transportation sector. Advancing a business in this environment requires new approaches tailored to specific business models serving unique markets.

In the last few years, Jeff and Laura Canady, owners of four Carolinas-based luxury transportation companies, have pursued a successful strategy that offers a role model for operators facing disruption.

“I’m always trying to save money,” says Jeff Canady of his core focus. “If you spend it on something, you have to make it up elsewhere; if not cars, then with property, if not property, then on overhead. You have to diversify to survive. The sedan-SUV-limo business model no longer works on its own.”

Compounding industry shifts are the recurring challenges of rising fuel and insurance costs, and in strong economies, the need to find chauffeurs and drivers who often are “always looking for greener pastures,” Canady says.

The Canadys are building upon two major business pillars to compete in this climate: A strong push into motorcoach service, while finding economies of scale through five acquisitions of regional transportation companies.

They now run complementary services that span like a javelin from the Charlotte, N.C. metro area south to Aiken, S.C., and eastward to Columbia and Charleston on the coast. Those brands include the flagship CLT Express Livery, SC Express Chauffeured Transportation, SC Coach Charters & Tours, and SC Express Charleston, which it acquired as Charleston Style Limo on June 11.

It connects the largest cities in South Carolina with Charlotte, the largest city in North Carolina, which is also the second largest in the South informally referred to as “Atlanta 20 years ago.” Charlotte is seeing growth outward from suburbs to exurbs, reaching small towns like Belmont that rim the city.

An LCT onsite visit this summer yielded some insights on how an operation makes the most of its situation.

Jeff Canady’s brother, Jim Canady (center), is the general manager of SC Express in Aiken, which gives SC Express access to the Augusta and Atlanta markets in Georgia. He and sister-in-law Laura speak with detailer Shawn Salley at SC’s new maintenance garage and facility in Aiken, S.C.
Jeff Canady’s brother, Jim Canady (center), is the general manager of SC Express in Aiken, which gives SC Express access to the Augusta and Atlanta markets in Georgia. He and sister-in-law Laura speak with detailer Shawn Salley at SC’s new maintenance garage and facility in Aiken, S.C.
Buying And Merging

The company started its acquisitions in 2002 with Charlotte Limousine. In 2010, CLT bought Aiken Limousine, which is now SC Express; then Charlotte Party Charter in 2014; Busy Bee Coach Tours in 2015; and Charleston Style Limo this year. The Canadys buy regional companies because it enables them to save money by combining operations and sharing fleet vehicles. That requires an investment in time, as Canady estimates it takes about two years to get an acquired operation fully trained and integrated.

Running car washes, detailing, and maintenance in-house has proven far cheaper than contracting those services out. They also have more control over supplies and parts ordering. The company employs mechanics and detailers onsite.  

By grouping fleet vehicle types under separate brand names, the Canadys also save on insurance costs, with sedans and vans under SC Express each requiring $1.5 million in coverage and the motorcoaches under SC Coach running with $5 million in coverage. As a result of growth and savings, the CLT Express group is on track for $7 million in annual revenues this year with 70 employees.

The regional strategy to push into the southwestern side of South Carolina has proven a big plus for CLT since it puts them within range of northern Georgia and the Atlanta area. The CLT companies handle much of the Masters Tournament transportation in Augusta, Ga., just across the state line from Aiken. This year, CLT did 950 runs for the tournament, which is one of the four major championships in professional golf, held during the first full week every April at the Augusta National Golf Club. CLT uses most of its fleet to handle Masters runs.

“We can pull cars among locations and keep everything in house,” Canady says. “All vehicles are about two to three hours away from each other and not sitting around.”

Jeff Canady checks out a brand new 120-in. Lincoln MKT Town Car stretch limousine on the Belmont lot he had just bought in late July from Executive Coach Builders. On this evening, the new stretch was being readied to pick up a client who needed some extra space to accommodate a broken leg. It’s an example of how stretches can still be put to varied uses.
Jeff Canady checks out a brand new 120-in. Lincoln MKT Town Car stretch limousine on the Belmont lot he had just bought in late July from Executive Coach Builders. On this evening, the new stretch was being readied to pick up a client who needed some extra space to accommodate a broken leg. It’s an example of how stretches can still be put to varied uses.
Motorcoach Moves

One of CLT’s biggest ventures has been the move into full-scale motorcoach service. It keeps two coaches in the Charlotte market and 10 in Aiken. The company wide fleet consists of 12 pre-owned motorcoaches, including four 56-passenger MCIs, three 56-passenger Prevosts, two 34-passenger Temsa mid-size coaches, and one 49-passenger Van Hool.

With the addition of a motorcoach fleet comes an avalanche of regulations and compliance. Jeff Canady is self-taught, researching and reading up on DOT regulations. He has hired an employee to monitor compliance and keep accurate regulatory records as well as cross-trained two other employees in compliance. CLT passed a three-day USDOT audit by the Federal Motor Carrier Safety Administration in June.

“There are so many moving parts,” he says. “Compliance is a full-time job. You have to make sure you have everything in order in case of an accident. Investigators will take a look at everything.”

By owning an old suburban ranch house on a well-located five-acre lot, CLT Express Livery saves money on overhead while benefitting from rising property values and low utility costs.
By owning an old suburban ranch house on a well-located five-acre lot, CLT Express Livery saves money on overhead while benefitting from rising property values and low utility costs.
Fleet Vehicles Savers

The makeup of the motorcoach fleet points to another key cost-saver for the companies of buying mostly pre-owned vehicles. The Canadys buy refurbished coaches, given their durability and lower overhead. It’s a common path for operators entering the coach market to build up clientele, experience, and revenue with the manageable costs and payments of a $200,000 to $350,000 motorcoach instead of a new one for $450,000-plus. The fleet includes a 1998 Prevost and 2007 and 2008 MCI buses.

Used buses often can be rendered as good as new on the inside with reupholstered seats, new floors and bathrooms, and interior lighting and accents. Operators like the Canadys can still charge the same rates as for a new motorcoach, since most models do not change shape or overall vary much among model years, and many passengers cannot tell the difference between new and used coaches. Drivers wear polo shirts for most runs, but change into a shirt, tie, and jacket for formal events.

When buying coaches, the Canadys look for models with 200,000 to 400,000 miles. As of late August, their coaches had an average total mileage of 350,000 miles.

Newer motorcoaches are more suited to operators doing contract or shuttle work that occupies most days of the week and requires constant regular uses, Jeff Canady says. “In this market, you need a good pre-owned bus that’s clean with an A/C that works,” Jeff Canady said. “Our market is not geared toward new buses. You just need ones that are nice and on time.”

On the black vehicle side, the Canadys opt for an all Cadillac and GM fleet, with Escalades, Suburbans, and XTS sedans as their go-to daily vehicles. CLT buys some “newer used” sedans and SUVs from larger companies with higher fleet turnover. “I will never buy a new car off the lot. You buy used with warranties. My fleet is one year or older.”

The Canadys will run their sedan-SUV fleet for about two to three years in the Charlotte market and then transfer them to South Carolina for another one to two years where the market is less luxury-oriented. The practice adds return value by running vehicles at a zero note.

The company also runs 25-40 passenger minibuses. For minibuses, vans, and stretch limousines, of which CLT has five, Canady buys new and keeps them for 10 years.

Jim Canady takes a call in the chauffeurs lounge and storage room in the Aiken facility which becomes very active in early April because of the nearby Masters Golf Tournament in nearby August, Ga.
Jim Canady takes a call in the chauffeurs lounge and storage room in the Aiken facility which becomes very active in early April because of the nearby Masters Golf Tournament in nearby August, Ga.
Finding Value In Black Luxury Cars

Despite the decline of the stretch limousine industry-wide, Canady still finds enough profitable weekend work and a few weekday runs to sustain five of them. “The sedan and SUV business has flatlined,” Jeff Canady says, although his company can still command $85 for an all-in airport transfer in the Charlotte metro region. “We still get the VIPs and special events,” he added, as evidenced by framed celebrity photos lining two walls of CLT’s Charlotte offices. “High end people still use the black cars and Sprinters. They don’t want Uber.”

However, while those clients may not want Uber, they do prefer faster service. “One word matters for the corporate guy: Convenience. We can’t match on-demand, only near-demand.”

While CLT uses mostly employed chauffeurs and company owned vehicles, it relies on independent operators to work from uptown hotels and be available for overflow demand. “We don’t do Uber, but I/Os can. We can’t tell them who to pick up as long as they are permitted.”

Although CLT does farm-ins for major networks and farms out rides for clients heading to destinations outside its service territory, it avoids most local and regional farm-outs, Canady said. “We don’t want to give money away to another company. It’s cheaper to pay a driver and burn the gas to serve another market a few hours away.”

Among its farm-in clients are EmpireCLS, Dav El/BostonCoach, Carey International, and Addison Lee. Its affiliate-related sedan and SUV business is about 60% farm-out/40% farm-in. Despite the decline in luxury black vehicle demand, the sectors still see peak periods. Jeff Canady in July drove for the first time in five years, and had to again in early October.

Courtney Myers (L) and Alisha Lowe (R) handle reservations for SC Express Chauffeured Transportation and SC Coach Charters & Tours in Aiken, S.C.
Courtney Myers (L) and Alisha Lowe (R) handle reservations for SC Express Chauffeured Transportation and SC Coach Charters & Tours in Aiken, S.C.
Property Investments

In 2005, CLT moved to its current location, a converted colonial style suburban rancher on a four-acre lot along the Catawba River in Belmont outside Charlotte. It has its own rear access road to a side street in addition to a front entrance onto the main thoroughfare, Wilkinson Boulevard, which runs near the Charlotte-Douglas International Airport.

CLT Express sees many benefits from its property situation. Canady’s approach is to buy large tracts in unincorporated or semi-rural areas with low property taxes and utility costs. His Belmont lot, for example, relies on a well and septic system instead of municipal utility lines. Its property has doubled in value since 2013.

The Canadys built a new garage and maintenance facility on the Aiken property, a three-acre lot a few miles from I-20, in late 2017. A commercial building with a few rented out retail spaces serves as the offices and lounge, while the separate 5,000 square foot garage handles maintenance on the motorcoaches. And in early October, they bought a two-acre site in Charleston where they plan to build a 2,000 sq.ft. office and 7,000 sq.ft. garage.

Owning property provides a stable, tangible asset that undergirds the value of a ground transportation business, especially when it has plenty of room to park and house fleet vehicles.

The Canadys built a new garage and maintenance facility on the Aiken property, a three-acre lot a few miles from I-20, in late 2017.
The Canadys built a new garage and maintenance facility on the Aiken property, a three-acre lot a few miles from I-20, in late 2017.
Hard Working Originals

Like many successful operators in the industry, Jeff and Laura Canady started with one car, and gradually built up their book of business. Laura, who also serves as a board director of the National Limousine Association, previously worked as a physical therapy assistant, while Jeff, who has a degree in health fitness, worked in sales at National Car Rental before starting as a one car independent operator at the Marriott City Center in uptown Charlotte.

The couple opened CLT Express Livery in 2000 about one year after Jeff had started Bailey’s Limousine. CLT’s first fleet included a Lincoln Town Car sedan and a stretch limousine.

The couple also owns two homes, one in Iron Station outside Charlotte, and another in Aiken, and plans to buy one in Charleston, S.C. As with their businesses, multiple homes in affordable suburban areas allow them to easily work and travel amongst their three offices and fleet facilities. In Aiken, the Canadys adapt their home to a temporary rest and sleep stop for staff and chauffeurs who need a place to stay during the Masters. All company offices and homes are within three hours of each other.

“Ultimately, success or failure falls upon my shoulders, as I have numerous amounts of employees who depend on my decisions to help enhance their livelihood,” Canady says.    

FASTFACTS
Names: CLT Express Livery, SC Express Chauffeured Transportation, SC Coach Charters & Tours, and SC Express Charleston

Locations: Belmont, N.C. (Charlotte), Aiken, Columbia, and Charleston, S.C.

Founded: 2000

Owners: Jeff and Laura Canady

Total number of fleet vehicles: 78

  • Belmont: 32 (two coaches)
  • Aiken & Columbia: 34 (10 coaches)
  • Charleston: 12

Types/brands of fleet vehicles: Cadillac XTS, Cadillac Escalade, Chevrolet Suburban, Ford Transit, Mercedes-Benz Sprinter, Lincoln Town Car MKT stretch; Hummer stretch; Grech Motors minibus, ECB minibus, Glaval Ford F550 and Chevrolet 5500; MCI, Prevost, Temsa, and Van Hool motorcoaches.

Total employees: 70

  • Of those, no. of chauffeurs/drivers: 50
  • I/O drivers: 12

Key managers: James Canady, operations director, Aiken; Bruce Hannah, operations director, Charleston

Annual revenues: $7 million

Client sample: Lexington County Blowfish baseball team, TIAA in Charlotte, Wells Fargo, Stanley Black & Decker, Milliken, USC, USC Aiken, Newberry College, and Citadel College.

Websites: www.cltexpress.com; www.scmotorcoach.com, www.scsedan.com, www.charlestonstylelimo.com

Related Topics: business growth, cost efficiencies, cost savings, How To, Jeff Canady, Laura Canady, motorcoach operators, North Carolina operators, operator profiles, South Carolina operators

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