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Carrier survival tips: Part 1

One of my members recently told me about one of his very good, long-time owner/operators who had decided to leave to join another carrier.




One of my members recently told me about one of his very good, long-time owner/operators who had decided to leave to join another carrier.

The member company is wellmanaged and by all appearances a good carrier to work for.

It caps owner/operator fuel costs, pays amongst the highest rates in the province and tries to treat its owner/operators fairly when it comes to work distribution. So, why did the owner/operator leave?

The reason given was the politics of the job and a change in pace. Seems the member company believes in and practices sound, long-term business strategies, not the least of which are speed control, hours-of-service accountability, the use of satellite tracking, etc. Things the owner/operator in this case felt were too much of an intrusion into his business.

This is an increasingly difficult issue for the industry.

It begs the question: How do we reconcile the control that many carriers think they need to maximize efficiency and to be compliant (whether required by law, insurance and/or legal liabilities) with the desire of owner/operators to retain their independence and to be their own regulator? There is no answer for all situations that I know of.

But, I do know that the answer or at least part of the answer lies in improved dialogue, understanding, respect and trust.

These are things that are a challenge in any business relationship, but are perhaps a particular challenge in trucking which was founded to a great extent on independence of spirit and entrepreneurship.

Also, at times we seem to suffer from a bit of a persecution complex in trucking.

I hear it from carriers who complain that everyone from their customers, to their suppliers, to the banks, to the regulators, is against them.

I also hear from owner/operators who feel that everyone – the carriers, the regulators and enforcement community, and the trucking associations are against them, or at least do not represent their views.

This is somewhat understandable and usually reflects one’s bargaining power, or what they perceive to be their bargaining power, especially in times like the present when there is an over-capacity problem in segments of the business.

The reality in today’s market of course is that everybody is getting squeezed.

Who is squeezed first and/or hardest is to a great extent irrelevant, but your perception is your reality.

Even in good years the profit margins in trucking are razor thin, so it should not come as a surprise that many carriers particularly in the more capacity-sensitive sectors are struggling to break even and have been doing so for some time (of course, there are always exceptions to this rule).

Most carriers I know have tried to shelter their drivers and owner/operators from the full impact of the deterioration in their revenue base.

But, as time passes and things don’t seem to get better – the US economy for instance – some carriers have had to take further steps.

So, there have been layoffs and some have made cuts in compensation in order to better compete. Is the motivation to survive or to prosper?

Trust me folks, for many it’s the newest edition of the reality show “Survivor.”

Many have demanded more of an effort from their people to control fuel economy (through speed control, reducing idling, out-of-route miles, etc.) in return for capping the price of fuel as an example.

Others are making an extra effort to avoid the costs associated with non-compliance such as fines, higher insurance premiums, etc. I am sure that in many cases, these actions and the reasons behind them could and should be better explained.

These are not designed to make drivers or owner/operators more miserable. They are survival strategies.

Next month, I will tackle the question: ‘What are the associations doing about the high price of diesel fuel?’

– David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.


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