Brace for a wild ride in 2022

Last year was the best of times for truckers. It was the biggest freight boom in over two decades and every shipper in town was your new best friend. Most expect demand to last well into 2022.

But it’s also been challenging times, as fleets struggle with high costs and shortages of pretty much everything. Weather, inflation, and Omicron only add to the chaos.

2022 new year
(Illustration: istock)

Putting the past 12 months into words is hard to do. Personally, I’ve never seen anything like it. All I know about the year ahead is that we should keep our seatbelts fastened because already there are curves in the road.

Mandatory vax

As I write this, Canada and the U.S. plan to start enforcing vaccine and testing requirements for truck drivers in January.

Canadian drivers handle 75% of cross-border truck freight. The Canadian Trucking Alliance (CTA) expects 22,000 of these 120,000 drivers to stop their U.S. trips. Pulling drivers off the highways that run between the world’s biggest trading partners during a supply chain crisis is just dumb.

Truckers have been dealing with Covid safety since before vaccines were bacteria in a petri dish. They never stopped working. Protecting themselves and the scant few people they come across on the road is old news to these professionals.

Sharper image

Whenever I tried to recruit one of my three kids’ university-educated friends into a career in trucking they’d scoff at the idea. For decades, people at dinner parties looked at me cross-eyed when I said trucking paid the bills.

But the perception of trucking is changing. Our stock is on the rise and the respect we’re getting as an industry is good for us in many ways.

Most important, we are able to compete for workers who previously would have never considered a job in trucking. We see a huge difference in the attitudes of people who want to come to work for us. We hear the same from our carrier partners.

Buying and selling

It looks like double-digit organic growth wasn’t enough for many companies last year. Owners continue to pack it in.

According to supply-chain M&A advisors Left Lane Associates, there were at least 33 acquisitions of Canadian-based trucking companies announced in the first 11 months of 2021—including some blockbusters.

This year, sellers who fear that Trudeau might soon mess with capital gains will continue to exit. At the same time, there is unprecedented interest from outside investors (private equity, family offices, etc.).

Expect robust M&A activity to continue. And why not, when a 200-truck fleet parked against the fence last year can increase by $10 million in asset value?

Need to be nimble

We put our 2022 strategic plan into the junk file a long time ago. With every day bringing a new twist, it’s hard to predict a month down the road let alone six months. Case in point: the truckload spot market.

In crazy times like this, C-suites need to be nimble. Organizations have to move as fast as the industry. We replaced weekly staff meetings with short morning briefings that have allowed us stay on top of all the day’s moving parts.

In boom times it’s critical to keep your financial reporting on point. It’s super easy for the bottom line to slip away with unprecedented truckload load-to-truck ratio tension. This year budgeting will be no easy task.

All the good-paying e-commerce business flooding the market can be a red flag if not closely monitored. The sheer size of online sellers would make me nervous. Several fleets have told me that before they blinked, they ended up with a serious customer-concentration problem.

Adding capacity will require some creative thinking this year. Remember the good old days when you could order a truck?

It’s going to be a wild ride, friends. Glad we’re in it together. All the best to you in ’22.

Mike McCarron is the President of Rite Route Supply Chain Solutions, a 4PL that provides “Over the Road Technology Driven Logistics” solutions. He can be reached at 647-478-4921 or mike@riteroute.ca.

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  • Your comments are right on the mark. I now own a small trucking company, but I have spent 53 years in this industry and (especially in BC) I have never seen anything like this.

  • You are right many trucking companies who got covid assistance should have pay it back the same as person who make over $38,000
    With e logs coming we need more parking with bathrooms and wi fi. We also to lock after sick and injured drivers and make sure all cross border drivers have something like medical share for those that fall behind on their medical bills and medical supplies in a group homes in ont.

  • Hey, Mike – being a positive provocateur as always – love it.

    Trucking and labour. Vocations looked down upon for the last 20 years are making a slow comeback, hard fought as it will be, as the new generation learns that an expensive MBA is often just a screening tool for an entry level position, not the investment they thought. Moving stuff and building stuff are noble professions that offer a sense of accomplishment at the end – sweaty shirts and dirty hands pay the bills as you so aptly noted, and are nothing to be ashamed of.

    I have long believed that share of wallet is where it’s at. Companies can almost seamlessly migrate between connected [yet different] service offerings to the same client. Done properly, it can be done via a 3PN [read Nimble – lol]. It’s allowed us to evolve for over 40 years, weathering the ebb and flow of inevitable market swings and client concentration. Best for a healthy and profitable 2022!

  • All the best to you Mike. As always right on point. Great advice for not only CEO’s in trucking but all industries. Every day brings a new unheard of scenario and being nimble is key.