CALGARY, Alta. – Alberta’s neighbouring provinces agree that the economic downturn in Wild Rose Country is and will continue to have a direct effect on each of their trucking industries.
As 2016 approaches, the British Columbia Trucking Association (BCTA) and Saskatchewan Trucking Association (STA) have seen this first-hand, with drivers abandoning Alberta for greener pastures to the west or east and Alberta carriers expanding their geographic reach to make up for the dearth of freight.
“We are feeling the effects of the economic downturn in Alberta,” said BCTA president and CEO Louise Yako. “In part because a lot of our members who are based here also have operations in Alberta, so they are feeling it directly in Alberta. Even those who don’t have operations in Alberta are beginning to feel it because we’re seeing Alberta carriers moving into B.C. looking for work.”
Yako said this situation poses both and up and downside for B.C.’s trucking industry, with the positive being that workers are returning to B.C. after having left for work in Alberta.
“On the other hand, it just means more competition,” Yako said of the negative, “and I think that greater competition is really starting to be felt now, and I would suspect that that will continue on through to 2016.”
Al Rosseker, executive director of the STA, echoed Yako’s sentiment.
“With what is going on in our neighbouring province of Alberta, we might see companies seeking refuge in the strong Saskatchewan economy,” he said. “With many oilfield workers not working in their typical positions, we have seen a slight influx of qualified drivers.”
Rosseker said he expects 2016 to be very similar for the trucking industry in Saskatchewan as 2015, continuing with an industry trend of mergers and acquisitions.
“As this continues to happen in the next year, it will be interesting to see if any more national carriers will call Saskatchewan home,” he said.
Alberta Motor Transport Association (AMTA) executive director Lorraine Card said that in addition to the drop in oil and gas prices, what concerned her the most was the drop in the Canadian dollar.
“Fuel is the biggest expense for trucking companies aside from insurance costs. That means that costs are especially high for Canadian trucking companies travelling south, which gain revenue in Canadian dollars but have to purchase fuel in the United States,” Card explained. “Companies have already been scaling back because of a downturn in the oil industry, but the weakening Canadian dollar has led to further downsizing. We are concerned as an industry with the way this is going.Trucking companies either have to get paid more or don’t go.”
Card added that the Canadian dollar’s decline has also led to increasing capital investment for the trucking industry, as truck and trailer manufacturing was all based in the US and valued in US currency.
Card pointed to several government-related concerns the AMTA is presently attempting to gain clarity on, including discussions on increasing taxes and a royalty review.
“This certainly has slowed investment and created more strain on a slowing economy,” she said. “The sooner we can get clarity on these issues the sooner we can move past them.”
Card also said the AMTA needed to acquire a better understanding of the provincial government’s recently-announced climate change plan, which aims to charge each business and individual in Alberta for their carbon emissions.
For Canada as a whole, Card highlighted what she believed is a lack of regulatory harmonization across the country and provinces, as well as concerns with the recent change in federal government, which she said could result in some national matters being stalled until the new government becomes educated on those issues.
Terry Shaw, executive director for the Manitoba Trucking Association (MTA), said he believed the impacts of the descent of oil and gas prices would affect everyone, it would be less dramatic in Manitoba.
“All industries ebb and flow,” Shaw said, “but our industry provides a critical service, so there will always be trucking activity regardless of what’s happening elsewhere in our economy.”
Getting qualified drivers on the road is a top priority for the MTA, as Shaw indicated, the number of trucks are not the issue, but getting trained drivers was.
“In Manitoba the, MTA has the good fortune of partnering with MPI’s (Manitoba Public Insurance) Special Risk Extension group on the MPI Entry Level Driver Training Program, which has been very successful in creating entry level drivers and connecting them with industry,” Shaw said.
Other areas of concentration in 2016 for the MTA will be continued support of the RPM (Risk. Professionally Managed) Trucking Industry Safety program, work with Apprenticeship Manitoba on training new drivers with the creation of the Certified Occupation of Commercial Truck Drivers and continue efforts on an agreement with the province on an environmental program for the industry.
“The MTA and the province came to an agreement earlier this year that the biodiesel limits in Manitoba would not rise to 5% from the current 2%, and one of the reasons this happened was because of our board’s support of alternative environmental programs,” Shaw said. “We are hoping to launch the GrEEEner Trucking Fuel Efficiency Initiative early next year.”
With regard to carbon emissions, the STA voiced concern for the US Environmental Protection Agency’s Phase 2 greenhouse gas emissions regulations.
“The EPA in the United States passed new environmental laws which govern the emissions on trucks and the technologies required to stay within limits; Canada typically blindly follows suit,” said Rosseker. “As we all know, this was a disaster last time in our cold northern climates and led to lengthy and costly breakdowns. The Canadian Trucking Alliance, with the full support of the provincial associations, is doing everything in its power to ensure we do not face the same fate with round two of the legislation.”
Rosseker also highlighted the national truck shortage and Saskatchewan’s ‘desperate need’ of rest stops and pullouts as two additional top priorities for 2016.
Rosseker said his province’s weather can pose a threat to drivers, who need safe places to wait out any given situation or simply to rest.
“It is unjust that rules are enforced on the industry, compliances are expected, but we simply do not have the roadside resources to make it possible,” he said.
The BCTA will look to continue work on the human resources side of things, telling its members that despite the recent incursion of driver to B.C., there is still a driver shortage.
“Because trucking companies tend to really be focused on day-to-day, and surviving day-to-day, some of them don’t look into the future and consider what the longer-term challenges might be,” said Yako.
“So we just want to be reminding our members that the driver shortage hasn’t gone away just because of this short-term situation (in Alberta) and they still need to prepare themselves and do what they can do to be able to attract the talent they need.”
Yako said they are also working on a commercial driver training program at the high school level so students can graduate with a Class 1 or 3 license by the age of 18 rather than having to wait until they are 19, which is normally the case with B.C.’s graduated licensing program.
Recruitment, attraction and retention are also key HR initiatives.
“A lot of our members tend to be smaller companies, so they don’t have that kind of HR training built in,” Yako said, “so this just allows them to improve their skillset so when they chose workers, they’re choosing who are going to fit into their operation.”
The BCTA would also like to grow its membership, which currently represents about 40% of the trucks on provincial roads. They will look to market new groups added to the BCTA membership list in 2014 – municipal fleets, related associations (members who operate trucks by aren’t in the trucking business) and shippers.
Overall, Yako said the BCTA was ‘modestly optimistic’ about the provincial economy, and that if any of the large resource projects were given the green light, it would be a huge win for B.C.
The AMTA will aim to tackle the issue of mandatory driver training in Alberta, some Card said they have done extensive consultation on.
Card also said the AMTA was concerned with the rise in out-of-service, or R-factor, rates.
“Technology is allowing enforcement to be more effective in targeting problem carriers and enabling early detection of mechanical issues,” Card explained. “Combine the advancements in technology with strained resources in the enforcement department and we have the perfect storm where now carriers seldom receive ‘random’ inspections. This means that the out-of-service rate is going up, even while the maintenance and compliance of these carriers is improving.”
Card said the proposed Level 8 inspection, along with other policy changes, could help alleviate this issue and allow the industry to be recognized for good behaviour and not put strain on government resources.
Lastly, the AMTA will continue to lobby for the use of wide-based single tires, which would replace the current duel tires, as they present the single largest opportunity to increase trucking productivity, improve safety, retain drivers and reduce the environmental impact, according to Card.
“This is a major issue impacting our industry and has been under review with the regulators for a number of years,” she said. “We are hopeful that Alberta Transportation will allow an opportunity to use wide-based single tires on primary highways in 2016.”
Despite the top priorities of each of the Western Canadian trucking associations, few can sidestep the impact, both negative and positive, the decrease in oil and gas prices is having on each, which was reiterated by the BCTA president: “The magnitude of (Alberta’s) downturn is so huge (and) the effect is so large.”