Industry Issues: Happy Birthday Truck News!

by David Bradley

Two-thousand-and-six has been a year of milestone anniversaries. In last month’s column I focused on OTA’s first 80 years. This month marks the 25th year of business for Truck News. Over that time, Truck News has been an invaluable source of information about and for the Canadian trucking industry. And, what a 25 years it has been.

In 1981, economic deregulation of the US trucking industry was in its infancy (the Motor Carrier Act had been passed the year before) and Canadian carriers were taking full advantage of the more open access to interstate operating authorities. So much so, that in 1982, the Reagan administration actually placed a two-year moratorium on granting licences to Canadian carriers, until the ambassadors of the two countries negotiated what became the Brock-Gottlieb Agreement. That agreement was the touchstone for an unstoppable march towards economic deregulation of the Canadian trucking industry.

Deregulation of the trucking industry became a precursor of perhaps the most fertile period of change in the structure not only of the North American trucking industry but of the North American economy as a whole. From 1984 to 1989, we would see the introduction of a federal excise tax on diesel fuel (supposedly to help slay the ballooning federal fiscal imbalance); deregulation of the trucking industry in Canada at both the federal and provincial level; the introduction of the National Safety Code for trucks; the signing of the first Canada-US free trade agreement; the adoption of the RTAC truck weights and dimensions standards; and, the introduction of the Goods and Services Tax. All in their own way would fundamentally change the patterns of trade and of truck traffic in North America from East-West to North-South.

I joined OTA in October 1985, virtually on the day that United Canada, the major underwriter of truck insurance in Canada at the time, closed it doors. I got an instant baptism into the complexities and problems of trucking; of dealing with governments on both sides of the border; and what an association can do to try and assist its members.

The 1990s did not start off well for the Canadian trucking industry. At the same time as it was trying to adjust to the new regulatory environment, the Canadian dollar took off towards 90 cents (US) – sound familiar? The Canadian economy fell into its worst recession since the Great Depression. There were those who were writing off the Canadian trucking industry, saying it could not compete with the big US carriers who were now swarming into Canada, offering low rates (Friday night specials) and taking full advantage of their economies of scale. There was a lot of red ink flowing during that time. But, it was during that time that I got my first experience of the resiliency of the Canadian carrier, something I would see time and time again over the years. The early 1990s also saw the controversial (at the time anyway) introduction of 53-foot trailers, which are now the North American standard and a 25 metre overall tractor-trailer combination length.

Economic issues, while always percolating were overtaken in the latter part of the decade by what became known as the “wheel-off crisis.” During a very short time span, three separate yet equally tragic incidents where wheels became detached from a transport truck near Toronto, struck and killed motorists travelling in the opposite direction. The public furor was understandably loud and vociferous and the trucking industry came under intense scrutiny by regulators, enforcement officials, and the media. But, rather than shy away from the issue in the hope it would go away, our members took responsibility and pledged to rectify the situation. There was a coroner’s inquest. And, there was the Target ’97 Joint Task Force on Truck Safety from which arose a comprehensive program of regulatory and legislative changes to the truck safety system.

The new millennium started with much optimism. Then came 9/11 and the subsequent realization that the slogan “security trumps trade” would have a profound impact on the Canada-US trading relationship and the efficiency of border crossings. The decimation of the reinsurance market after 9/11 also launched a major flight of capacity out of the truck insurance market.

In addition to a never-ending stream of new US border security measures, the industry has also had to cope with skyrocketing fuel prices and a precipitous increase in the value of the Canadian dollar compared to the US greenback.The last few years have seen the institutionalization of fuel surcharges and how capacity shortages can work to the industry’s advantage. We are witness to the development of a new culture where it is desired that competition in the modern trucking industry be based on service and price, where price includes the true cost of compliance by everyone. We see carriers endorsing measures like mandatory EOBRs, and speed limiters – things that would have been unheard of not too many years ago.

It is the nature of the industry that the ride is not always smooth; that forces outside of our control can have major impacts on industry prospects. But, over the past 25 years, the industry has risen to every challenge and will continue to do so. It has been a great ride so far.

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