18 Wheels’ Kotendzhi draws on family roots when tackling today’s challenges

Growing up in Mariupol, Michael Kotendzhi started learning about the transportation industry as a child. At family dinners, he would often listen to the stories his dad brought home from work.

His father started a trucking company back in the ‘90s – a difficult time to start a business in newly independent Ukraine. But despite all the challenges, his dad loved the job and was always passionate about it.

Even though logistics and transportation weren’t his first career choice, Kotendzhi ended up on this career path in his senior years at the University of British Columbia. Several factors led to this decision, but his father’s advice and the passion for the job rubbed off on Michael.

“He [my dad] worked seven days a week to grow the business and the company. So, that hard work and tenacity, probably, came from my dad. The supply chain always moves, and there are no days off… there is no shortcut.”

This realization became a key to his success here in Canada, too.

10 years at 18 Wheels Logistics

Kotendzhi has just celebrated his 10th anniversary at the Vancouver-based 18 Wheels Logistics. He joined the company as a transportation manager, working his way up the career ladder until he became COO in 2020.  

When Kotendzhi joined 18 Wheels Logistics he was working from 12 to 15 hours a day. His first task at the company was to oversee a newly integrated drayage container division.

Dealing with drayage is difficult and costly, he says. But he took on the opportunity to make it a part of 18 Wheels, turning it into a profitable and successful business after evaluating the setup, costs, rates and margins.

“When I started at 18 Wheels, we were providing transport and warehousing. So, we were providing two services. And when you provide two services, you don’t need to make all your margins on only one service. You can be very cost-effective on both of them. But when you add both of them together, now, it multiplies by two, right?… And that’s what we had to do. Our goal was to provide warehousing and transportation as a combined service to our partners [clients]. And that helped to grow 18 Wheels in Canada.”

Challenging times in logistics

It’s been a decade since then, but the company kept growing during the most challenging times.

The lack of warehousing space has been a great challenge in Western Canada, especially in Vancouver, over the last three years. And Kotendzhi says the end of 2021 was the most challenging time for logistics and transportation industries. But even against that backdrop, 18 Wheels Logistics expanded warehousing space, growing from under a million to 1.4 million square feet of storage space.

But Kotendzhi says it was not easy, recalling the e-commerce boom and rapid increase in demand during the peak of the Covid-19 pandemic, when Vancouver ports faced huge bottlenecks, and a shortage of chassis, drivers, and storage space.

“On top of that, we had a flood. So that kind of gave Vancouver a black eye, because it cut the whole Vancouver from the rest of Canada. And that’s when a lot of our partners [clients] realized, you know, ‘We can’t just rely on Vancouver alone, because if this happens again, the rest of Canada would be cut off.’ So, I’d say I would say that was the most challenging year in supply chain in the last 12 years of my career.”

One challenge that remains is the lack of warehouse space. And Kotendzhi believes it will become next year’s biggest challenge. According to real estate firm CBRE, Vancouver’s vacancy rate for industrial space has dropped to the all-time-low of 0.8% in the third quarter of this year.

Opportunities in Alberta

Reflecting on the past experiences, the company is preparing to solve this challenge, and in the past four months it has also opened new facilities in Alberta.

“As Vancouver’s warehousing marking becomes tighter and tighter and more expensive, we started giving options to our partners [clients] to relocate to Calgary or Edmonton. Because the lease rates are less expensive in those markets, compared to Vancouver. And it gives a choice whether they want to store in Vancouver, or Edmonton, or Calgary — it’s up to them. And then we provide the identical service in both markets.”

And while thinking outside of the box and hard work are attributes that Kotendzhi modeled after his father, he credits his team members, saying that the success would not be possible without their skills and hard work.

“Reflecting on the 10 years, I can say that obviously having a great team does help to grow the business. I’d like to share how important to bring on the team members that are more knowledgeable and smarter than you are. And that’s what we did at 18 Wheels…And the team members that we have, they’re experienced, they care, and they want to be in this field, which is great. And it’s nice to work with a team that cares and executes.”