Opportunity in 2010 starts with education
Self examination…Transition…Survival…These are the words that come to mind as I consider this transitional year. And one more word, which after survival is the most important: Opportunity.
Despite all the parked trucks, all the old rigs not being replaced, and the more than 3,000 bankruptcies which have thinned out our industry in North America over the course of the recession, capacity remains a critical issue. Canadian shippers responding to our annual Transportation Buying Trends Survey (conducted in partnership with CITT and CITA) rated both TL and LTL as being in over capacity. As a result, ground transportation rates continue to drop. The Canadian General Freight Index has fallen in eight of the ten months tabulated so far, and has declined 9.6% in aggregate. Many shippers have clearly chosen a transportation strategy geared towards reaping the cost benefits of short-term rate reductions. Even those who know better can’t ignore the breaks their competitors are getting. Nor can they ignore the cuts to their own supply chain budgets.
How do we get out of this mess? Despite improving numbers for our national economy, there remains a great deal of debate on whether trucking has truly hit bottom. The amount of available freight right now is certainly not making for easy predictions. Obviously we all hope we’re on our way out of the trough but I wonder if trucking can hit true bottom until the banks finally pull the plug on the operators who remain on the ropes. In that case we still have a ways to go and will be spending 2010 trying to find our way through what looks to be a very uneven and volatile recovery.
But as I mentioned at the start, there is opportunity in all of this. The opportunity to, as Scott Smith of J.D. Smith & Sons recently put it, “hit the reset button” when it comes to managing efficiencies, profitability, customer relations, etc. There is a whole lot of learning that needs to get done in this regard and we want to be part of it. So we are announcing several ventures this year, all designed to help fleet managers better manage the turnaround of their companies and fully reap the benefits of the recovery.
Truck News has joined SelecTrucks of Canada and Pearson Dunn Insurance as a sponsor for the Driving for Profit seminar series, put on by NAL and KRTS. I consider this one of the best seminar series in the industry and I’m happy to be personally involved this year, hosting a session interviewing top industry executives on the industry’s most pressing issues. There are two Driving for Profit events scheduled for 2010 at the Capital Banquet Centre in Mississauga, Ont. The first has been set for April 6 and the second for November 9. To register for the April event or to learn more, visit www.drivingforprofit.com.
We are also busy right now preparing the second installment of our own Profitability series of seminars, which we put on in partnership with Dan Goodwill and Associates.
The first will run May 26th and it’s going to be a day packed with information and insightful speakers. It will include an economic forecast from Scotiabank, talks on how to reignite your company’s sales engine; create an accurate freight costing model; effective real estate planning; how the packaging revolution is affecting transportation; workforce management; and rebuilding the value of your business. In addition I will be leading panels of industry leading carrier CEOs and top notch shippers in examining recovery strategies. See our ad on page 13 or go to trucknews.com for more information.
I would love to see you at all of these events. The road to recovery, and opportunity, starts with education.
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As always Lou I love to read and hear your insights into the industry, however your comments and I quote “I wonder if trucking can hit true bottom until the banks finally pull the plug on the operators who remain on the ropes” now concerns me, not in its accuracy but in it’s true consequence. You might recall some time ago, in fact last spring/summer I was writing about the undead, which was a reference to exactly what you have just suggested, why haven’t there been more large companies gone by the wayside through all of the economic turmoil we have seen.
As it turns out during the officers retreat of the Truckload Carriers Association last August we had a guest speaker who happened to be a senior VP of Comerica Bank, I had the opportunity to ask about the banks reluctance to repossess on companies in our industry who were delinquent on their loans and off side of their covenants. His response was scary and at the same time made perfect sense in that the bank is seeing the same problems in every sector of the economy and if the pull the plug on everything that is in the same shape as trucking the domino effect of that action will slide us into depression. Manufacturing, service sectors all of it is delicate, not a rosy outlook I know and this is our American neighbors of course but as the old saying goes, when the US gets a cold we get the flue, I am interested in your insights on this line of thinking?
Also congratulations on your partnership with the Driving for Profit seminars, these are good folks giving back, we need more of it.
Thanks Lou
Ray Haight