A Toronto trucking firm is complaining that most Ontario companies were frozen out of a competition to be the exclusive 2015 Pan Am Games logistics provider, which was eventually won by a German-based operation.

“This is a low blow for Ontario-based logistics companies,” said John Flynn, vice-president of sales and marketing for Seneca Transportation & Logistics Inc.

Flynn said he is frustrated there was no public tendering process, but rather TO2015 official approached only eight companies to see if they would be interested in being sponsors with a minimum buy-in of $1 million.

“The problem is they just shut everyone out,” he said.

More: Pan Am Games coverage at Thestar.com

DB Schenker of Canada in Mississauga got the nod when it made an offer exceeding more than $1 million in in-kind services, and will supply trucking during the games.

“DB Schenker is owned by the German railroad (Deutsche Bahn) and it has got deep pockets,” Flynn said, adding that “we are in a really slow economy here in Ontario and we are fighting out for survival.”

But a TO2015 official, who refused to say exactly how much Schenker put up for the bragging rights of being an official supplier to the Games, acknowledged that if and when the threshold of in-kind service is exceeded, the company could end making money off the Games.

The minimum threshold to become an official supplier and sponsor of the Games is an investment of $1 million.

The Pan Am Games has many sponsors, including the Toronto Star.

The Tories’ Pan Am critic MPP Rod Jackson (Barrie) said the sponsorship process is no way to make the Games open and transparent, especially when officials even refuse to name the eight logistics companies that were approached or how much Schenker kicked in.

“It’s highly inappropriate. I wouldn’t go as far as to say it is illegal … but it is certainly unethical,” Jackson said. “Other businesses that may have been able to provide a better, more cost-efficient service were left out.”

Pan Am officials have flatly refused to release details on individual sponsorship agreements, but in Schenker’s case it revealed it is expected to unload more than a million items, from furniture to specialized sporting equipment, at 50-plus venues.

Former Liberal premier David Peterson, Pan Am/Parapan Am Games Organizing Committee chair, defended the practice of getting companies to put up cash or in-kind services, which he says is common practice in these kinds of multi-sport events.

“You are always working with sponsors to sponsor the games and you cut deals with these people,” he said, explaining that the company becomes not only a sponsor but also a supplier.

“There is nothing weird about this. It happens in every Games … there is no subverting the process.”

Peterson said the winners in all of this are the taxpayers, because there is an infusion of private money to help offset the cost of putting on the Games. He added that some sponsors will recoup their buy-in and more while others are content to do it just for the publicity.

It will cost taxpayers at least $2.5 billion to host the Games, which will host 7,666 athletes competing in 51 sports at venues in 14 municipalities, including Toronto, Hamilton, Milton, Ajax, Whitby, Oshawa, Caledon, St. Catharines, and Welland.

Rick Ramsbottom, vice-president for sponsorship sales and Partnership Services at Toronto 2015, said there will “likely” be additional logistics costs that would benefit Schenker, but wouldn’t say what they might be.

“I can’t get into the details. I can’t tell you exactly this is how much the sponsorship investment is and this is how much the spend is,” he said, adding that “we are ecstatic with having Schenker as a partner in the Games.”

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Eric Dewey, president and CEO of Schenker of Canada, told the Star in an email statement that “DB Schenker has a history showcasing our expertise and commitment to staging world-class sporting events, including the Sochi, London, Vancouver, and Beijing Olympic and Paralympic Games.”

Dewey emphasized that being the official logistics supplier will give “Schenker of Canada the public awareness and promotion we need to strengthen our visibility and position in the Canadian market.”

Tourism, Culture and Sport Minister Michael Chan’s office defended the sponsorship process in a statement to the Star: “Sponsorship is critical in making sure revenue targets are achieved with a maximized investment for a defined set of benefits like access to marketing, branding and affiliation with the event.”