Mainfreight AGM — Ready Fire Aim

Reading our previous ramblings, it would be of no surprise that we love founder led businesses.

Historical data will show that they often perform better, and it’s not hard to draw inferences as to why. Long-term perspective, greater commitment and dedication, more focus on sustainability and survival, less bureaucracy… it is often a source of significant a competitive advantage.

This brings us to Mainfreight.

Two weeks ago, I had the pleasure of traveling to Auckland for the company’s AGM.

For those of you who haven’t seen their blue trucks on the road, Mainfreight are a New Zealand based logistics business with operations across 331 branches in 26 countries. Its services included domestic transport (road and rail), warehousing, and air & ocean freighting — they offer a complete supply chain management solution summarised by “delivered 99% on time”.

The journey to the successful company we see today is hard to comprehend. With just $7,200, a borrowed forklift, and a friend’s help in securing space on the government owned freight ship, Bruce Plested founded Mainfreight in 1978. Price cartels, government regulations, economic pressures, earthquakes, large international competitors… Bruce and Mainfreight have dealt with them all. Now 82 years old, Bruce holds the role of chairman and has retained 16% of the company.

Getting to talk to Bruce, ask him questions, listen to his old business stories, and to see him interact with his family and Mainfreight’s loyal shareholders left a lasting impression. “Special company, special people” isn’t just a slogan.

Passion

The best entrepreneurs that we know are driven by more than larger pay-packets. Take Warren Buffett or Mark Leonard (Constellation Software). If they were driven by money, we dare say we would never have heard about them. They would have sailed off into the sunset once they reached a comfortable retirement.

These individuals have a deep seeded passion for what they do. I observed this in Bruce.

As he told us old business stories, his face lit up.

Bruce spoke fondly about working under Don Rowlands at Fisher & Paykel. He spoke of the joy he had when he got his first job in freight. “I just love order, and I couldn’t believe how every freighting branch ran different processes and systems. There was such an opportunity in just fixing simple things up,” (I’m paraphrasing here). Apparently, Bruce’s garage is a good endorsement for his love of order.

In Don’s CEO address, he shared that the board and senior management team had recently met with one of their largest US competitors (Old Dominion Freight Lines). This competitor gave them a tour of their biggest site in Chicago and showed them exactly how they do things. When Don said to them, “you do realise we are a competitor right?”, they replied “we shouldn’t worry about that because it’ll take 20 years before you compete with us.”

Don continued, “if you want to understand how much runway is in America, the 3rd biggest operator has just gone broke (Yellow Freight). The biggest operator has revenue of $34bn and they only move LTL domestic freight in the US… we have revenues of $5bn and we think we are doing pretty good… there is opportunity there for us.”

Talking with Bruce about this tour of Old Dominion after the AGM, you could just see in his eyes how excited he was. The challenge of attracting great people and building out their network and brand in the US energised him. He stressed that Old Dominon’s comment had zero ego attached to it, and that he was just so inspired and impressed by their operations, “we just have so much to learn from them.”

Bruce’s affection and commitment to continuing to find better for Mainfreight’s people, for Mainfreight’s customers, and for Mainfreight’s shareholders — it was infectious.

And if it was that impressionable on me for the brief few hours I had with him, I can only imagine what it is like to work for him.