MT: You have been at the helm of the AMTA for two and a half years. How has the experience been thus far?
Royal: I come from a background of marketing of refined petroleum products and thought I came from a highly regulated industry. After two and half years I am still struggling with all the regulations impacting the trucking industry. In a highly competitive market place where someone always has a lower price, trucking companies manage to meet a plethora of regulations and still eke out an operating earning. You have to admire the men and women in the industry for the level of success they have achieved with the challenges they are facing day to day.
MT: What has been your greatest challenge to date as executive director of the AMTA?
Royal: The greatest challenge was the steep learning curve I had as an industry outsider coming in and having to get up to speed on so many different issues. The challenge continues with a number of new regulations impacting the industry in 2004 and 2005.
MT: What has been the most significant accomplishment of the AMTA while under your watch?
Royal: The most important item is the coming of age of AMTA as an organization. Although the process was started before I joined AMTA, the amalgamation of ATA and ATISA has meant merging cultures together so the new organization functions as a single entity. We are further down the path today than we were two years ago and we will continue to see improvements as time passes. We have also gained credibility in the eyes of the government as evidenced by being asked to take the lead in programs such as Cargo Securement, Collision Review and the LCV (Long Combination Vehicle) committee that reviews permit conditions. Our influence in the government decision making process has improved in the last three years as the government has recognized us as a key stakeholder.
MT: What are the key issues facing the trucking industry in Alberta?
Royal: Alberta carriers are facing the same issues as carriers in other parts of the country. All have experienced rapid rises in costs like insurance and fuel. All carriers struggle with the need for rate increases to protect the bottom line and the company’s viability with a highly competitive market that gives the customer a number of choices. All carriers are facing a demographics issue of drivers retiring faster than new people are entering the workforce. The crisis point is getting closer every year and the industry needs a solution that will allow them to meet the demand of Canadians for the transportation of goods. One possible solution would be a change in the immigration rules to give qualified drivers in other countries a high priority on entering Canada. We are also looking at the impact of new Hours of Service regulations and US Border security issues.
Specific to Alberta we would be remiss if we did not point out the impact BSE has had on the livestock sector. In the first few months after the border closed the livestock carriers lost 50% of their drivers to other industry sectors. The carriers have all downsized to meet the new reality of the livestock business. What cannot be ignored is the human infrastructure that supported the export of live cattle has been destroyed.
Alberta is also the most progressive province in regards to LCVs. We have had a number of good news stories such as the most recent changes on adverse weather rulings and new trailer configurations up to a maximum of 38 meters. The importance of this group to the retailers of the province cannot be underestimated and the Association and Alberta Transportation continue to look for improvements in productivity and areas of operation while still maintaining the record of being the safest vehicles on the road.
MT: The AMTA has a unique arrangement with the WCB that sees dues collected as part of their WCB premiums. Can you speak of the advantages of such a system?
Royal: At the insistence of carrier members, in 2001 ATA and ATISA joined to become a one-stop shop for the trucking industry. As separate organizations a number of services were being duplicated and joining the two administratively made a lot of sense. ATISA, as the safety organization, received funding from WCB to help reduce workplace injuries through training programs. ATA was the lobby group seeking improvements in the operating environment. AMTA has continued with the safety training plus we continue to develop new programs for the industry. As such a portion of our funding continues to come from WCB through a levy on the trucking companies’ WCB premiums. When spread over so many companies the levy is just a few cents each.
Consequently, every for-hire trucking company in Alberta is a member of AMTA. With such a broad membership base we have decentralized a lot of the decision process. Any member may participate through sector committees or at any of the seven region meetings held every month. The level of involvement depends on the carrier’s time and interests. Resolutions are forwarded to the Board for action. In all its actions the Board must consider the impact on all carriers. Board members have voted in favor of actions that may not have been of particular benefit for their company, but do help the industry at large. It is a very democratic model.
MT: Having said that, one might be concerned that the AMTA is too reliant on the WCB for member recruitment. Is there any concern that the WCB could one day terminate its agreement with the AMTA, and if so, how would that impact the association?
Royal: We have no concern that WCB would terminate the arrangement in the foreseeable future so it is not a factor. Today we have members that are not part of the WCB arrangement, such as a number of private fleets who pay dues like they would in other jurisdictions for the benefits they achieve through membership. We also have a large Associate Trades member group that participates in the Association activities. The main difference between AMTA and other provincial associations is the large number of general for-hire carriers we represent, which is currently around 12,000.
MT: Many trucking associations (yours included) have called upon carriers to increase rates to offset rising fuel and insurance costs etc. Is the message hitting home yet?
Royal: We hear of carriers who have successfully passed on increases to cover the rapid rise in overhead and operating expenses. At the same time I still hear of carriers who have not passed on any increases and are temporarily absorbing the rise in costs. In each case the company has made a business decision they felt was best for them at the time. As a trucking company cannot operate at a loss sooner or later all companies will have to put through an increase.
The companies that have built a strong relationship with their clients and have succeeded in differentiating themselves from the competition are the most successful in having fair rates for the services they provide.
MT: Safety remains a priority of the AMTA so some might have questioned the termination of the Partners in Compliance program. Can you explain why the program was ineffective and whether there’s a chance a similar safety program could be launched in its place?
Royal: The PIC program as structured had some inherent problems that prevented it from growing. The AMTA still believes in the principals of PIC and would encourage carriers to incorporate them into their business. Contrary to your statement PIC (Partners in Compliance) was not a safety program, but a program to have carriers self monitor and report on regulatory compliance. The key item that was missing from the program was a perceived economic carrot to encourage carriers to join. The AMTA was unsuccessful in generating the benefit that would encourage carriers to join. The confusion about safety is we found that when a company actively monitors itself for compliance it builds a culture of following the rules in its employees. It does not matter to the employee if the rules are regulatory or health and safety. We were able to prove that PIC carriers had fewer collisions, violations and personal injuries compared to non-PIC carriers.
The industry continues to discuss ways of continuing the program with Alberta Transportation that would have perceived benefits to encourage participation while eliminating some of the administrative burden of the old program. The only change at present is AMTA is not collecting the reports required by the original PIC program.
MT: As you look ahead towards the remainder of 2004 and into 2005 are you comfortable with the overall state of the trucking industry in Alberta or are you concerned with its health?
Royal: The trucking industry has proven over close to the last 100 years it can be amazingly resilient during times of adversity. Quite often a new twist in operating practices has improved profitability for the progressive thinkers. Look at some of the truck configurations on the road today. We have LCV’s in A, B and C configurations, we have seen the development of the B-train and then the Super B, the heavy haul industry is constantly coming up with trailer modifications to facilitate the demands of industry and the oil patch in particular. Virtually every industry has placed demands on trucking that have seen a company rise to the challenge and a new standard born.
The industry is facing serious challenges today with border security, legislated changes to equipment and legislated changes in operating practices. There may even be some casualties in companies that cannot meet the challenge, but I am convinced there will be carriers that will come out the other side with an innovative solution and a strong bottom line. They will drive the new standards for other companies to live up to and the whole industry will once again have proven how flexible it can be to meet the ever changing needs of Canadians.