Future Look – What lies ahead…

by James Menzies, Katy de Vries

DON MILLS, Ont. – It’s that time of year again – time to reflect back on an eventful year for the Canadian trucking industry and ponder what lies ahead as we approach 2003.

This year was an eventful one for the Canadian trucking industry, to say the least.

The U.S. Environmental Protection Agency (EPA) enforced its emissions crackdown effective Oct. 1, and the manufacturers carried through on their promise to rise to the challenge.

It’s still too early to tell what the long-term implications of this will be, but a significant pre-buy in the months leading up to October and the subsequent downturn in truck production is already having an effect on the truck manufacturing industry.

An encouraging trend for owner/operators has emerged, hinting of a possible rate increase.

Statistics indicate carriers are having a more difficult time finding O/Os to haul their freight which will result in more pressure for an increase in rates.

Perhaps the biggest change to the industry in 2002 was the approval of a new Hours-of-Service regime.

Around this time last year, Canadian Trucking Alliance chief executive officer, David Bradley, predicted the proposal would be approved sometime this year, and that prediction came to fruition in September.

Looking ahead to 2003, the industry can expect a whole new onslaught of challenges.

Dave Sirgey, president of the Freight Carriers Association of Canada (FCAC) says fleets are being urged to increase rates.

This year, carriers are being advised to increase rates by 5.5 per cent.

The increased rates are necessitated by several issues that just won’t go away, such as increased insurance premiums and the fluctuating cost of diesel.

“The fuel surcharge, I think, is still going to be an issue,” says Sirgey.

“It’s currently 3.6 per cent for less-than-truckload and 8.5 per cent on truckload and I think with the volatile fuel prices that’s something that will be here for quite a while.”

He also predicts fleets will continue to suffer from rising insurance rates.

“In some cases, carriers’ insurance premiums have increased 100 per cent,” says Sirgey.

Bradley says now is as good a time as any to seek a rate increase.

“The conditions now are as good as they’ve ever been for general upwards pressure on rates,” says Bradley.

“I think that’s long overdue and a sustained general rate increase would be welcome news for everybody.”

The coming year will likely involve some sort of learning curve for drivers who will soon have to adapt to the new Hours-of-Service rules.

Bradley foresees a period of educational enforcement taking place in the latter part of the year, before the rules are fully implemented.

Meanwhile, environmental issues are also expected to top the list of concerns for the trucking industry.

With Canada yet to announce how it will meet Kyoto Accord standards, the trucking industry is hoping it won’t be unfairly targeted.

Paul Landry, president of the B.C. Trucking Association (BCTA) has a positive outlook for the year ahead.

“Things are pretty stable in the industry but there are some soft spots obviously,” says Landry.

Cross-border traffic is down as much as 20 per cent, which is a major cause for concern, he says.

He expects that to improve if the U.S. economy rebounds from a sluggish 2002.

Bradley agrees the fate of the Canadian trucking industry depends largely on the U.S. economy.

“The Canadian economy has outpaced that of the U.S., but I would look for the U.S. economy to recover this year,” predicts Bradley.

In B.C., the softwood lumber dispute with the U.S. has taken its toll, but Landry says the forestry industry is coping with the challenges quite well.

A solution to the dispute, however, would be welcomed by the Western Canadian trucking industry in particular.

“I’m not sure what’s on the horizon in terms of softwood lumber,” says Landry.

“I think it’s difficult to predict when there will be any changes there.”

All in all, Landry is optimistic about the what’s in store for the trucking industry next year.

“Looking forward to the future, I would expect things will pick up in the industry and maybe go from stability to a growth period,” says Landry.

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