MT: Congratulations on being appointed chairman of the Canadian Trucking Alliance. You have almost 50 years experience in the industry. During that time you’ve helped turn around your company, Canpar Transport, you’ve driven truck, you’ve worked on the dock, you’ve even been a Teamsters steward. You are also the first chairman in the CTA’s history from the courier sector. How will this rich background help you in this role?
Cyopeck: It is an honor to represent the industry across the country. We have such a great staff that it makes it easy on the chairman. I understand every facet of the industry. When I walk into a place or see something going on, having done it, I know if it is done right or wrong. I also believe that I have the ability to relate to the various modes of transportation given my background and experience.
MT: This winter you were diagnosed with a brain tumour, which was removed in Mid-February. You are currently undergoing further treatment. How are you feeling?
Cyopeck: Nobody ever thinks something like this will happen to them. When you find out, your life changes automatically. A lot of the stuff I used to worry about, I look at it now and wonder why I ever let it bother me. At the same time, in the end you only have two choices: you either fight it and go at it in a positive manner or you give up. I am now undergoing radiation treatment and will finish my last treatment on June 2. Then comes the wait – four to six weeks for an MRI. That will determine whether I will need chemotherapy, which I can do at home by pill. You get the hair loss but that’s a big deal with me, right? Or if everything shows up good on the MRI, I just go back every three months for a checkup. I’ll tell you, anybody that feels hard done by, should spend one hour in the waiting area for radiation or chemo and they will understand how lucky they are. But I’m doing fine. Mentally I’m fine, physically I’m a little more tired in the afternoon but I’m continuing to work every day. Prior to the treatments I was in the office by 7:30 to 7:45 and I am still here by 9 a.m. after having my treatment downtown. I want to continue to work. I don’t want to be sitting around.
MT: Fighting this is a challenge in itself. Many in the industry were impressed that you decided to also take on the challenge of chairing the CTA. Why did you do it?
Cyopeck: I did actually think about whether I should – more for the sake of the association, than for my sake. But CTA CEO David Bradley basically said “you are not going to turn this down. If you have treatments that prevent you from attending functions, there are other former chairmen who will fill in.” And Evan MacKinnon, the most recent past chairman, came to me personally and said when you can’t be there, know that I will be there for you. And I personally thought this would keep my mind active. They say you learn who your real friends are during trying situations and I’ve realized just how many friends I have. I am humbled.
MT: I understand you are doing more than fighting for yourself. You are involved in a project that could help many others battling cancer. What can you tell me about it?
Cyopeck: I’m working on the Delivering a Dream Campaign for Trillium Hospital with Rick Gaetz, CEO of Vitran Corp. I’m personally donating $100,000 to Trillium for the housing of a new MRI unit and I’ve committed to raising $1 million. We are over halfway there. I have to put back; I have always believed in that, it’s part of my upbringing. I came from the other side of the tracks and I’ve always believed in that, not only personally but corporately.
MT: Let’s talk about industry issues. Freight volumes were up significantly in 2004 in many sectors. How has the first half of 2005 shaped up in terms of business?
Cyopeck: Things have softened a bit in some of the industries. At Canpar, for example, we are still ahead from a volume point of view compared to last year but the people we use as subhaulers are asking for loads whereas last year we had trouble in the first couple of months finding available capacity. I think there are some uncertainties in the market and it’s just not one particular item that’s affecting freight volumes and the economy right now. The automotive industry is oversupplied and is looking to cut costs. When our dollar gets strong, the export market falls off because exporters can’t be competitive with their prices or because there’s not enough margin for them. But I also strongly believe that as long as the housing market remains strong, the retail side of our business will remain strong. When people buy houses, they buy up a lot of other things.
MT: As chairman, what issues would you like to see the CTA tackle?
Cyopeck: We have some big issues with the government from the hours of service point of view. We recently met with the federal minister in Montreal and spoke about that. And it was the same old story about the provinces having to get on board. The fact is if the feds say this is how it’s going to be, the provinces will get onside. The second big issue is that truck driving is the top occupation for males in Canada and yet it’s not considered skilled labor. There are a lot of qualified people from other countries we could have coming here. We’ve got a group going to Europe on a fact-finding mission. There is a language problem to overcome, especially if you are running north south, but that’s secondary in my opinion. There are a lot of people who would love to immigrate here and have the skill to become a driver and yet the government has failed to recognize that it is a skilled position.
MT: One of the most significant developments over the past year has been the sharp increase in freight rates. More than 80% of those using truck transport reported paying higher rates. Is this a one-time adjustment, or do you see rates continuing to rise?
Cyopeck: I see rates continuing to rise on a reasonable basis. But go back 20 years and see what the rates were and look at today. I would bet you will find that in many cases they are less than 20 years ago or at least have not kept up with inflation. There have been too many carriers who didn’t know their costs, didn’t know how to cost, and were afraid to ask for a rate increase. It’s about time carriers started to smarten up. Shippers have to keep their costs down as well, we understand that, but they have to realize they can’t continue to hammer us. One of the first places shippers look when trying to reduce costs is trucking. They have to realize we can’t haul for nothing. And we have to be able to explain the reasons behind the rate increases to our customers and work together. There are a lot of soft costs, such as wait times, that people don’t see but that reduce efficiencies for both shippers and carriers.
MT: Our research also shows that more than half of shippers using truck transport were paying increases higher than 4%. In your estimation how are shippers responding to the increases?
Cyopeck: Anybody is going to fight an increase, including our industry. I think we still have a job to do to educate shippers about our business. I don’t think there is anything wrong with going to the shipper and saying here are our rates and here are our costs – how can we best deal with this so it’s a win/win? You will always have the guys who will drop their rates because they are afraid of losing the business and you will always have shippers who will jump from one carrier to another. But the relationship works best when it’s treated as a partnership. The other area that would help both sides is to recognize that there are things we could be doing from an intermodal point of view. We should make better use of intermodal where at all possible.
MT: Is the intermodal infrastructure sufficient to handle this demand?
Cyopeck: No it’s not. The railways have done a pretty good job in some areas in terms of transit times and service. But they still fail to recognize that when they miss service on a load given to them by a courier or an LTL carrier, it’s not one load; it’s thousands of customers that could be affected. And we can’t go to the customer and say the rail screwed up. They didn’t deal with the rail; they dealt with us. There is still a lot of work to do. We also must remember that intermodal won’t work in all cases, for example short haul lanes or time sensitive products or loads.
MT: There has also been a great deal of movement on the surcharge front. Almost all shippers are paying a fuel surcharge, and about a quarter are now paying surcharges for border delays and delays at the dock, according to our research. A large part of the reason for these surcharges has been to change shipper behavior when it comes to things that create inefficiencies for carriers. Are you seeing any change in shipper behavior as a result?
Cyopeck: I think the more reputable companies are starting to treat the truck driver like a human being. There was a time when the driver was treated like a dog by shippers. It has improved but we still have more educating to do. Having said that I must add that we still have more educating to do within our own industry too. Having the right facilities in some of these loading and receiver docks is important, for example. A driver may have driven all night to get there and when he does he’s asked to park in the line. There were some places where they wouldn’t even let the drivers use the washroom.
MT: The cost of fuel right now is a large issue for carriers and shippers. Fuel surcharges are representing almost 25% of truckload costs for some shippers. Where do you see fuel pricing and surcharging going over the next 12 months? Is the worst over or yet to come?
Cyopeck: I personally think it’s going to settle down but I don’t think it’s going to get too much lower. I hope it’s not going to go the other way because that would affect everyone right down to the consumer. I also believe you have to have an appropriate formula that recognizes the costs associated with fuel. There’s a lot of things carriers can do to conserve fuel as well. This is where speed and idling control come in. We’ve got the technology such as speed governing and automatic shutdown on idling. It’s very simple to do so on a company truck. You spec it, so restrict it to the proper speed and idling limits.
MT: Some have said that because of the driver shortage many carriers are reluctant to raise the issue of speed control with their drivers. Is this an issue carriers must do a better job at addressing?
Cyopeck: Yes. Everybody is fearful they will lose their owner/operators if they restrict speeds. So you’ve got guys out there who spec their trucks and put a drivetrain in them that allows driving at 120 km/h. Some even spec them for higher speeds. Well, there’s several companies that have speed restrictions and they get by. We restrict our Canpar trucks, for example, to 90 km/h. I’ve had people tell me we are unsafe because we are driving too slow. Do you know how many linehaul vehicles we’ve had run into the back of Canpar trucks since I’ve been here? Not one. And we’ve saved a fortune on fuel by doing so. Every ten clicks saves you a fair bit. I recognize fully times have changed since I was driving truck back in the 70s. But if you have a guy going down the road at 120-km/h instead 90 km/h, all it does is give him a little extra time at the truck stop.
MT: Almost half of shippers are concerned there is not enough capacity right now to handle their needs. How would you assess the capacity situation?
Cyopeck: It’s a roller coaster. There will be times when capacity is tight and times when there is excess capacity. There is never going to be a steady stream. A large part of this is the fact the industry has a very serious issue with attracting drivers and keeping them. It is an area we have to address as an industry – what can we do to get people to come to work for us and stay with us?
MT: About 90% of the current driver population of 265,000 will have to be replaced by 2008 because of retirements and people leaving the industry. That’s a monumental task. What will it take to attract such a large amount of people to the industry?
Cyopeck: That’s going to be a tough one because lifestyle is so important to people now, and it should be. When I was driving in the 70s, you were a trucker, you had your freedom and it didn’t matter if you weren’t home. And you made a lot of money at it too. But times have changed, lifestyles have changed, family values have changed. You can’t expect a guy today to leave on a Sunday night and get back Saturday afternoon and then fix his truck till Sunday night. Those days are gone. At the same time we have to enhance the way we treat drivers. It’s not just about money. They’re no different than the CEO who wants his company to improve its performance every year. Drivers want to know that at the end of the year they have improved their lot. You look at most surveys and money is the third or fourth item in terms of importance. You have to explain to them what you did with the money the company made – how much money you put back into the company, how costs are going up, etc. We also have to do a better job of educating owner/operators to be better business people. Some owner/operators go out and buy a piece of equipment that probably costs $20,000 more than what they need so they can get all the chrome and all the bells and whistles they want. And then they expect the company to compensate them to pay for that. They say if I’m going to live in the truck, I want to have the best. Fine, but if you want to have the best then you have to be able to pay for the best too. If all that’s really needed to spec the truck is, say $110,000, and the owner/operator wants to spend $130,000 to get the chrome, then why should he expect the trucking company to compensate him for it?
MT: How will the Kyoto protocol affect trucking? What is CTA doing about it?
Cyopeck: I agree we all have to do our part on the environment. At the same time, the engine technology required will likely cost more and somebody has to pay for that. Forget the truck rates and the shipper, in the end it will be the consumer who will pay because the cost of manufacturing and transportation will go up. We will have to be resigned to the fact that everyone will have to contribute a fair amount. From the government’s point of view they have to recognize that you just can’t continue to go back to the taxpayer and add more and more burden.
MT: Speaking of Ottawa, you’ve been in the industry a long time. What’s your assessment of Ottawa’s leadership and vision when it comes to transportation?
Cyopeck: They’ve been weak in recognizing for the most part the trucking industry and its specific issues. The problem is that soon as you get the minister of transport in either the federal or provincial political scene educated on some of the things that are key in the industry, what happens? They change him. And they usually put someone in who doesn’t have a transportation background and so has a big learning curve.
MT: The Canadian Trucking Alliance and provincial associations have had many successes in recent years, particularly in areas such as border legislation. Yet there are many carriers who are not part of any trucking association. What would you like to say to them? Why should they be involved?
Cyopeck: I’m really disappointed that there are carriers, including some larger carriers, who don’t want to belong but yet want to gain all the benefits. I just think that’s wrong. I call such carriers leeches. They don’t want to spend X amount on dues, but think how much they would have to spend on legal advice if it wasn’t for the work the associations do. If you want to make things better for the industry, participate. Not only financially as a member, but participate in the committees.
MT: How would you like to see the shipper-carrier relationship evolve?
Cyopeck: The logistics associations could really promote along with the trucking associations information meetings and the fact that shippers and carriers have to work closer together. I remember when I first took over Canpar and the company was close to death. We were doing a lousy job at just about everything, quite frankly. We decided to hold shipper focus groups and traveled all over. First thing we did at these meetings was admit we had done a lousy job and then we asked them to tell us what they were upset with and how we could change it. I said I can’t make it better unless you tell me what you need us to do. I remember getting raked over the coals by one customer in particular, but you know what? That customer ended up coming back to us. The first thing we have to do as carriers and shippers is communicate. Rates will always be hammered down by them and will always be pushed up by us – it’s a fact of life. We both have to talk about what the real issues are and we have to be prepared to listen. mt
Deliver a Dream Campaign tees up to raise money for Trillium Hospital MRI system
By Lou Smyrlis
John Cyopeck’s “Delivering a Dream Campaign”, dedicated to the housing of a new MRI system at the Trillium Hospital in Toronto, will hold a golf tournament this August 29th at the Rattle Snake Point to raise funds.
Fees for the ProAM – Two-Man Best Ball event are $3,400/Player or $10,000/Threesome – with a pro. (Tax receipt is $3,000 per player or $9,000 per team.)
Non golfers can also contribute by making a donation to The Trillium Centre Foundation and forwarding it to Canpar Transport L.P., 1290 Central Parkway West, Suite 500, Mississauga, Ont., L5C 4R9, att’n: John Cyopeck.
Tax receipts will be provided by Trillium Health Centre Foundation for all donations.
At the present time, the Trillium Health Centre’s two sites share one MRI unit and a person is faced with a six- to eight-month wait for elective procedures. Even urgent cases have up to a one-month wait time.
“This is not only unbelievable, it is unacceptable,” Cyopeck, chairman of the Canadian Trucking Alliance and head of Canpar Transport says.
Cyopeck, who was diagnosed with a brain tumour this winter, has already made a $100,000 personal donation and has committed to raise an additional $900,000 by the end of August.