Truck News


Future file

Scott Johnston CEO and CFO Yanke Group

Scott Johnston CEO and CFO Yanke Group

With more manufacturing jobs relocating offshore and more freight moving to the North American continent by ocean, we will see a greater demand for port capacity and a need for enhancement of the infrastructure to move the freight inland via truck and rail.

The days when traffic managers controlled the movement of goods from a manufacturing plant in the heartland of either Canada or the United States is slowly becoming a thing of the past. Tomorrow’s freight moves will have been routed by either the owner of the goods or the freight forwarder, facilitating the transpacific movement to the ultimate destination in North America.

Canadian carriers will have to identify the parties that control the movement and routing of the goods, or the ultimate offshore true owner, and establish relationships and provide value-added services to participate in the supply chain.

To provide additional value within the supply chain carriers will either have to formulate alliances with other service providers or become more diversified themselves, offering warehousing, transload and pic’n’pak, for example.

Full truckload trucking companies will have to transform themselves into true transportation solution providers, while addressing the ever-increasing challenge of securing and retaining good people and key customers.

In 2032 the Yanke Group of Companies head office will still be located in Saskatoon, but we will have a much stronger physical presence in key ocean port market centers. With an aging work force and the introduction of generation “Y” into the labour market, future domestic and transcontinental movements will be facilitated by an ever-increasing intermodal market.

Our rail operation has doubled in size in just the past 24 months, with a compounded growth rate in excess of 35% per annum. Twenty five years from now, we will have inverted our current portfolio with full truckload, long haul transportation becoming the smallest portion of our diversified business groups, while our intermodal operation and our ocean freight forwarding services becoming the largest and economically strongest part of our system.

While some companies identify border protection issues like C-TPAT and ACE as obstacles and trade barriers, the smart ones are starting to look at those challenges as opportunities that will set them apart from the competition. Most organizations have had a comfortable evolution learning to operate in the domestic and North American marketplace, but moving forward, they will have to understand that the world has no boundaries.

John Doucet President and CEO Day and Ross Inc.

There are always going to be some smaller companies and regional carriers, for the simple reason they’re more flexible in what they can do, providing specialized services etc.

I think there will be about 10-15 carriers handling most of the trucking business in Canada 25 years from now, not unlike what we have today. But those 10-15 will have to grow much larger.

Right now, the Day and Ross Group are looking to expand to $1 billion in sales by the end of 2008. That’s the good thing about being a national carrier. If things are slow in one part of the country you can shift your focus to other geographical areas that are growing.

Our business includes LTL (Day and Ross Inc), the courier sector (SameDayRightAway), our TL division (Fastrax), and a dedicated fleet operation (Dedicated Contract Logistics). Our new LTL partnership with R&L Carriers of Wilmington, Ohio gives us complete coverage of the US market. The successful Canadian or North American carrier of the future will have to cover all the service points, either directly or through a partnership.

No doubt the railways will keep growing, but I don’t know how interested they will be in continuing to provide the intermodal containers. Most likely transport and/or shipping companies will have to put their own containers on the rail. And I don’t see rail being more dominant or overtaking trucking. Right now, rail is only a small part of our own Fastrax operation.

One positive opportunity resulting from the twinning of the TransCanada highway in the Maritimes would be the ability to haul double 53-foot trailers with one tractor between Halifax and Toronto. This is currently done in the province of Quebec. It would allow us to conserve energy and require fewer drivers.

Government has a role to play in the industry from a safety and environmental perspective. Speed limiters on trucks are a must. As soon as a truck comes off the line it should be speed-locked. This alone could save millions of dollars in fuel.

The driver shortage will continue unless the industry finds ways to give them better packages including better pay and more home time. Border delays are another problem that brokers/drivers are having. These issues need to be addressed by government intervention or the cost of goods crossing the borders will continue to increase as drivers need to be compensated for these delays.

Stan Dunford Chairman and CEO Contrans Income Fund

As much as we all want to believe things are changing at a quick pace, trucking might be the exception to the rule. It still takes a driver and a truck to deliver a load. There’s no rocket science to that.

Customers will still want one-stop shopping. Transport companies may have to form partnerships and alliances with international agents, but I don’t think worldwide trucking fleets are in the cards. This is a fragmented business and you can be as regional as you want to be. But once you go across the pond it’s a whole different ball game.

The real change in trucking will occur with government regulations restricting truck access to cities. It will probably begin with the 12 largest cities in North America. Tractor-trailers will no longer be allowed downtown and deliveries will be limited to straight frame trucks during certain hours. This will require a system of warehouses located around ring roads where linehaul drivers will unload or switch trailers.

The second part of this equation will see certain commodities restricted to specific modes of transport. Certain types of freight will be restricted to rail and marine, for instance, but trucks will still play a role in the final delivery of product.

The biggest issue facing the trucking industry is the driver shortage and that has to be addressed. The driver of the future will be more into lifestyle than the drivers of today, so the industry has to change the way they do business. They will have to set up patterns and lanes that allow drivers to go out with a load and return in a timely fashion. It’s a tough business and being away from home for extended periods does not appeal to the youth of today.

Hours of service regulations in the future will only reduce the number of hours a driver has available. As a result, we’re going to have to educate our customers. Every minute they take longer than humanly possible to load a truck will cost them money. No one yet realizes how important this will be.

Consolidation will continue. There are many players between the big operators and the niche carriers who don’t have a succession plan and are looking to get out of the business. Income trusts as we know them today will not exist. We may remain Contrans Income Fund but we will act no different from an equity that happens to pay a large dividend.

Ron Tepper President and CEO Consolidated FastFrate Inc.

Those that are going to succeed in the industry are either going to be smaller regional carriers who can offer great service to a larger partner, or those that go bigger and go global, offering a wide menu of services. We will fall into the second category as we are about to open an office in Shanghai.

We’re looking for a partner steamship line to be used as an ocean linehaul carrier, similar to our relationship with CP Rail for our service in Canada. I
think you will see a lot of these partnering arrangements in the future. This allows a trucking company to sell its services across the world by tying into their partner’s logistics group and vice versa.

Our close relationship with CP Rail has created a co-loading situation where our cross-dock operations are in or adjacent to CP rail yards. The future of trucking in Canada is tied to the intermodal sector and that’s why we are building or have already built warehouses close to the rail yards. Successful LTL carriers will need to have the same scope and breadth to be able to service the entire country.

Hopefully, in 25 years the infrastructure at ports will be much improved. Canadian carriers need to be able to take control of a product from point of shipping to final delivery, from cradle to grave so to speak, and this will require more investment in infrastructure. Right now Canada and the US are spending a fraction of what China and even Korea are, where a huge investment in infrastructure is ongoing.

Government definitely has a role to play. Shipping should be easy and cheap and right now it’s neither. By 2032 we should see harmonization on a variety of issues. Currently, the provinces can’t even agree on hours of service regulations, or weights and dimensions for that matter.

If we look to Vancouver as a model for other ports, we should see the trend continuing towards more company drivers and less independent operators. In a few years port freight will be handled by a few reputable companies at each location.

Security issues will continue to be at the forefront as the industry grows. The idea of a common North American border should be further explored. That way products entering the US or Canada would only have to clear customs once.

Allan N. Robison President and CEO Reimer Express Lines

You are pretty much going to have a global presence in the LTL sector or you won’t be in the game in 25 years. There will still be a place for the niche carrier, of course, but the marketplace will be dominated by five or so big players, of which we at YRC Worldwide will be one.

The challenge will be to compete with sprawling monsters like UPS and FedEx. You’ll have to be able to handle freight to and from anywhere in the world.

Transportation modes will be the same as they are today: air, rail, ocean and truck. I don’t see any huge change in the technology of any of those modes, except trucks will be the cleanest. Truck engines by 2010 will be incredibly clean, so I can only imagine what they will be in 2032. The other transportation modes have a long way to go to catch up.

With aging drivers in the industry, there’s going to be a tremendous turnover in the next few years, and drivers will continue to be drawn from other parts of the world. Truck driver shortages will especially challenge the long haul sector where lifestyle is an issue.

As global trade increases, currency issues will be at the forefront. Rather than dealing with just the US and Canadian dollar, carriers may have to think in terms of other currency scales. Right now we have emerging countries like India, China, and Viet Nam. In 25 years, other parts of the world and their currencies could become more prominent.

As long as the fuel supply remains steady, trucking companies will make out all right. In the case of interruptions to the supply, trucking companies and individuals have shown that they can be very resourceful when it comes to economizing. As well, some alternative fuel sources on the horizon look promising.

There’s lots of talk about deregulation but we’re seeing more rules not less. Ironically, a tightening of the rules gives the advantage to carriers like ourselves because we have the tools to deal with any impediments or glitches.

If the US and Canada were to see eye to eye on security and border crossing procedures, some barriers could instantly be removed. But that’s a political issue. At present there’s almost a new rule every day at the border and more hoops to jump through. In 25 years, hopefully, border crossings will be streamlined and automatic.

Claude Robert President and CEO Robert Transport Inc.

The movement of freight will change tremendously because of the nature of globalization. In my opinion, companies like FedEx and UPS, along with logistics providers like Schenker and DHL (often with minimal assets relying entirely on local carriers), will control 50% to 75% of worldwide freight distribution, all though there will always be a need for local direct service operators and short radius carriers. I anticipate a large chunk of our work will probably come from these large companies.

In 25 years the world’s population will probably have doubled. Strong regional carriers could benefit because the rail network will not be able to grow enough to answer all the needs of customers.

Canada and the US will share a border and together with Mexico will form one huge market with a common border kind of like Europe, with people and products moving freely from place to place. The population of Mexico will triple. Spanish will become more prominent and be taught in the schools.

The environment will continue to be a major issue. Even in the last six months we’ve seen people change their minds on global warming, even the Americans. Alternative fuels will progressively be replaced by other forms of energy. The cost of fuel will still be important, but the effect on the environment will be the key factor in determining which type of energy should be developed.

Within 5 years, let alone 25, we will have vehicles that are completely different from anything we see today: hybrids and electric motors; the elimination of gear systems; energy-wasting mechanisms becoming obsolete.

In 2032, cars and trucks will virtually drive themselves. Eventually highways will be like airports with all movements controlled electronically for safety reasons alone. New technologies are being developed and those countries that do not come on board will stay primitive. It will be a total disaster if money is not put aside to manage highways.

Motorists will have to get used to double and triple trailers. This is extremely important. The 401 will be three lanes between Quebec City and Windsor, and eventually Halifax. Truck lanes will be something like in Europe with doubles and triples confined to the inside lane, trucks in the right two lanes and cars in the left two.

Of course exits, overpasses and truck stops will have to be improved to accommodate these larger units, but the land is all there. What we will need are politicians and people with vision.

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