fuel for thought

by Lou Smyrlis

As Motortruck was going to press, independent truckers angry over the failure to strike an acceptable deal on fuel surcharges were blockading grocery terminals and gravel pits and threatening to shut down traffic on Canada’s busiest highways. High-profile fleet executives angry over the reluctance of some shippers to raise fuel surcharges to an acceptable level took to publically addressing their clients with four-letter words. Al Palladini, Ontario’s minister of economic development and trade, frustrated by his inability to broker a deal with representatives of the shipping industry, the major trucking firms and independent operators was threatening to intervene and regulate the trucking industry. And, in turn, shippers were angered at the government suggestion that transportation services are a homogenized product that can live with a flat rate dictated by politicians and bureaucrats.

Perhaps it’s best that everyone cool down a tad. Take a wider view of the situation. And a long hard look in the mirror.

First of all it’s critical that independent operators realize that – frustrating as the reality of it may be – rising fuel costs are an economic and political issue of international proportions that can’t be settled by ill-prepared local protests or powerless governments. Our governments are basically impotent when it comes to controlling prices that are set on commodity markets around the world. They do control the level of taxation on diesel fuel but they haven’t been raising it of late and even if they are pressured into dropping it, there’s no guarantee that fuel prices won’t continue to rise and offset the effect of taxation relief. Independent truckers should also understand that any public sympathy they do hold will quickly evaporate soon as they attempt to inconvenience the public with a highway blockade. And hopefully Palladini’s threat to force a flat rate for surcharges on the industry is nothing more than an attempt to push the major stakeholders back to the bargaining table. Trucking is a business and decisions on matters such as fuel surcharges should be handled by the people who run the business and their clients, not politicians.

Which means carriers and independent operators will have to take that long hard look in the mirror. Too many carriers were late in introducing surcharges when fuel prices peaked last year. And then they failed to negotiate fuel surcharges that would rise with the next round in diesel price hikes – even though they were warned by many sources, this magazine included, that fuel prices this winter could be even worse than last year. Carriers may blame it on uncooperative shippers but their failure to negotiate acceptable fuel surcharges is hard to understand in a booming market where there are more loads than trucks to move them. Carriers are in a better bargaining position than they’ve been in since deregulation.

Independent operators, meanwhile, must stop fooling themselves that this is really an issue about rising fuel costs. It could just as easily have been escalating equipment or insurance costs that brought them to their knees. The test of a good independent businessman is his ability to weather tough situations – on his own. By having the business sense to adapt. Not by “reacting like a child with a temper tantrum demanding that someone take responsibility for their business” as one owner/operator who wrote in to our sister publication, Truck News, described the recent demonstrations. It’s time that independent owner/operators saw trucking as a business not as a “culture”. It’s time that more of independent operators attended business seminars than show n’ shines and spec’d their equipment for efficiency not looks.

As for the shippers trying to squeeze what is already the most cost-efficient transportation system available on the continent, it’s time for a reality check.

Lou Smyrlis, Editor

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