TORONTO, Ont. - Now is the time to raise rates and fuel surcharges and/or charge for extra services, said Ontario's top trucking executives at the Ontario Trucking Association's second Executive Forum held in April. Forum panelists included Rob Pe...
TORONTO, Ont. – Now is the time to raise rates and fuel surcharges and/or charge for extra services, said Ontario’s top trucking executives at the Ontario Trucking Association’s second Executive Forum held in April. Forum panelists included Rob Penner, vice-president of operations for Bison Transport, Dan Einwechter, president of Challenger Motor Freight, Claude Robert, president of Groupe Robert, Norm Sneyd, president of Highland Transport, Stan Dunford, president of Contrans/Laidlaw, Ray Haight, president and COO of MacKinnon Transport, Mike Jones, VP of TransX and Serge Gagnon, president of XTL. The forum was characterized by a combination of colourful tough talk and useful advice, both of which went over well with the audience.
The event kicked off with a talk by Mike Jones on determining and understanding costs. Next came a presentation from David Sirgey, president of the Freight Carriers Association of Canada, on accessorial charges (not including fuel surcharges).
“The industry needs to change its attitude and charge for all services performed,” Sirgey told audience members. “Often carriers think that if they don’t charge for an additional service, the cost of it just goes away. But it doesn’t. The cost always applies.”
If the customer requests it, that’s your key to charge for it, he said.
“Right now is the ideal time to charge for these services,” said Sirgey. “If you don’t do it now, you never will. And if your shipper says nobody else charges for it, then include it in your rate.”
Sirgey acknowledged that charging for services that were previously free could prove difficult when dealing with some shippers. He suggested tracking services so as to be able to go to the bargaining table with documented evidence.
“For example, waiting times have the biggest potential for applying extra charges,” he said.
Carrier sales personnel need to be trained to understand the extra charges and when they should be applied, Sirgey added.
He also recommended raising rates in small increments on a regular basis, rather than doing so in a single huge jump after a prolonged period.
Betsy Sharples of the OTA followed Sirgey’s presentation with a brief summary of the findings from a recent OTA accessorial charges survey. According to the survey 78 per cent of Ontario carriers (of the 65 who responded to the survey) currently present an Accessorial Charge Rate Sheet to their customers when quoting on a service. However, only 48 per cent of respondents required customers to sign an agreement to pay for specified charges. (Complete survey results are not available as yet, but may be at some time in the future, said Sharples.)
Being up front about not absorbing the cost of extras (e.g. waiting times, lumper fees, border crossing, fuel cost increases, multiple pick ups etc.), and writing accessorial charges into your initial contractual agreement is key to making sure you get your money, said Penner. He provided a detailed approach to price quoting and contractual arrangements whereby the shipper must give detailed information regarding the nature of the haul and the carrier has the option to discontinue services or seek legal recourse if the agreement is not respected.
“If you get shortchanged you have a way to handle the situation formally,” Penner explained.
Also presented at the seminar was a talk on the hours of service in the U.S. and their impact on the industry. To no one’s surprise, Serge Gagnon emphasized the importance of not paying one’s drivers less just because they aren’t able to drive as much.
“The hours of service must not impact our drivers’ pay,” he said.