International forum explores trucking around the globe
January 1, 2006
TORONTO, Ont. - Decaying infrastructure is a worldwide problem but the shortage of qualified truck drivers is only an issue in some countries, according to trucking representatives from around the wor...
TORONTO, Ont. – Decaying infrastructure is a worldwide problem but the shortage of qualified truck drivers is only an issue in some countries, according to trucking representatives from around the world.
The global trucking execs came together in Toronto recently to compare notes and examine how their counterparts from around the world were dealing with key industry issues.
Australia, Europe, New Zealand, the U.S. and Canada were all represented on the panel which met at the Ontario Trucking Association’s annual convention.
Main policy issues
Highway infrastructure was a top policy issue facing representatives from each of the countries included on the panel.
Chris Althaus, CEO of the Australian Trucking Association, said the Aussie government has underinvested in transportation infrastructure. Now, it’s looking at public-private partnerships as a way of building new roads and restoring bridges and highways. Althaus said the government down under is also looking to the trucking industry to finance a significant portion of its infrastructure investments.
Registration charges have surged 35 per cent and road user charges have increased by 10 per cent in recent years, Althaus said.
Umberto de Pretto, deputy secretary general of the International Road Union in Switzerland, said highway infrastructure is a major issue in Europe. He said the trucking industry there is also faced with a strong pro-rail lobby.
“The political mindset in the European Union is that the solution to everything is rail,” said de Pretto.
He said road costs are 20-30 per cent greater in Europe than in North America and there are stiffer penalties attached to shipping by truck.
“We need to convince the government that without a good road transportation system, the economy stops,” said de Pretto. He said the challenge in Europe is for the industry to clean up its own act, better control who enters the business and combat the negative public perception plaguing the industry.
Tony Friedlander, CEO of the Road Transport Forum, New Zealand, agreed the underinvestment in highways is the most pressing policy issue facing the industry. He said the trucking industry in New Zealand is also striving to work better with the communities it serves.
“There’s pressure from communities to shut trucks out of their communities,” he said. “We have to separate truck activity from residential and retail areas as much as we can. Until we solve the community concerns, we will have a major task in front of us.”
American Trucking Associations’ president and CEO Bill Graves added the number one policy issue south of the border is productivity. He said the trucking industry is struggling to keep up with the capacity demands placed on it thanks largely to the shortage of qualified drivers.
“We also have significant concerns about infrastructure and limitations on the efficiency and service that creates,” he said.
Graves added the U.S. has newfound concerns about its fuel supply following Hurricanes Katrina and Rita this fall.
“We’re concerned about fuel – not so much the prices we have paid, but we have discovered how fragile our refinery systems are,” he said. “We need to work harder to ensure there’s an adequate fuel supply available.”
Working with shippers
The ATA’s Graves said American shippers have come a long way towards improving their relationships with trucking companies.
“I believe there’s a new awareness that if there’s an inability to move their product, they might as well get out of business,” said Graves. He added shippers are feeling the capacity squeeze and are educating themselves on issues affecting the trucking industry.
That’s not the case in Europe, said de Pretto. He said the industry there is trying to educate shippers about the impact delays have on their business. In some cases, loads are held up at borders for several days at a time, but shippers “don’t care,” de Pretto said.
Biggest challenges for carriers
Steve Williams, CEO of Maverick Transportation in the U.S., told delegates the biggest issue facing American carriers is the driver shortage.
“We will not solve this problem individually,” he pointed out. “We’re going to have to work on the much bigger picture and improving the image of the industry.”
Warren Hamilton, owner of Cromwell Transport in New Zealand, said the biggest challenge facing carriers there is the poor understanding communities and government have about the industry. He said the Green political party in New Zealand is promoting that all freight be moved to rail.
The biggest challenge for carriers in Europe is the sudden influx of shoddy operators from Eastern Europe, says Wim Vos, CEO of Vos Logistics oss BV in the Netherlands.
He said the European Union has welcomed 10 new member states and integrating the Eastern European nations has proven to be a challenge for the trucking industry. Tens of thousands of trucks from Eastern Europe are delivering freight in the West and driving Western European fleets out of business, Vos said.
He said Eastern European fleets tend to pay their drivers about 30 per cent less and undercut the rates of their Western counterparts.
Another challenge for European trucking companies is the cost of diesel which has skyrocketed 27 per cent this year.
Dennis Robertson, managing director of Roadmaster Haulage in Australia, also said the biggest challenge facing carriers in Australia is getting the government to recognize the importance of the industry.
“It’s amazing to me that governments throughout the world just don’t realize how important our industry is,” he said.
He also said the government there is reluctant to allow more productive vehicles, pointing out it took five years for the industry to get permission to increase the length of B-trains (or B-doubles as the Aussies call them) by one metre.
That was a sentiment echoed by de Pretto. He said in Europe the industry would like to increase its GVWs to 60 tonnes, which would get more trucks off the road, reduce emissions and benefit shippers.
“We hear nothing from shippers and nothing from environmental lobbyists,” said a frustrated de Pretto. “We should not push this. It’s not our battle to fight.”
Diesel price comparison
Robertson said diesel prices are about .86-$1/litre in Australia after the tax rebate. However, he said the industry there has been successful passing those costs onto the shipper.
Truck fleets in Australia have taken measures to control their fuel costs including limiting speeds, ensuring drivers stick to the most efficient routes and using equipment that reduces idling.
Vos said European trucking companies are shelling out about $1.40/litre for fuel. While shippers there aren’t keen on paying fuel surcharges, Vos said they eventually give in.
Hamilton said diesel costs about $1.24/litre in New Zealand but carriers have been able to pass the cost on to shippers.
In the U.S., record diesel prices were a blessing, according to Maverick Transportation’s Williams.
“For years we’ve been trying to educate shippers on our plight,” he said. “Now finally these CEOs are discovering their transportation budgets have been destroyed and there’ll be hell to pay!”
He said skyrocketing fuel prices have heightened everyone’s awareness of the issues facing the trucking industry and for the first time shippers are taking the time to learn about the challenges facing the industry.
Robertson said the driver shortage in Australia is not as critical as in North America. He said his fleet experiences a 10 per cent driver turnover rate, which he considers too high.
Drivers in Australia make between $75,000 and $95,000 Australian dollars per year, Robertson said. He said Aussie drivers today are more concerned about lifestyle.
In Europe, there’s no shortage of drivers thanks to the
influx of Eastern European trucking companies, said Vos. Poland, for instance, has a population of 38 million people and a staggeringly high unemployment rate so there’s a huge pool to draw from.
“Our biggest problem is not finding the drivers, the problem is to educate them,” he said.
There’s a significant shortage of drivers in New Zealand, according to Friedlander. When asked by Canadian Trucking Alliance chief David Bradley how New Zealanders feel about Canadian fleets recruiting their drivers, Friedlander quipped “If you come to New Zealand recruiting drivers, I have a few members who will meet you at the airport and choke you by the neck!”
In the U.S., shippers are doing a much better job getting trailers loaded and unloaded promptly, said Williams. He said the rule of supply and demand is in trucking companies’ favour and they now have the ability to charge for wait time.
In New Zealand, wait time isn’t much of an issue, said Hamilton. There are very minor delays at ports, but congestion on highways remains a larger issue, he said.
Vos said European shippers are much more efficient than North American companies at loading and unloading. He said most shippers have good scheduling and time management skills and they generally adhere to their loading schedules.
Robertson also said wait time hasn’t been a huge problem in Australia. He said a new law now makes shippers accountable if they cause a delay that triggers an accident. If it can be proven a delay contributed to a trucker’s fatigue and that trucker is involved in a fatigue-related accident, the shipper that caused the delay can be charged, Robertson explained.
Everyone in the transport chain (from the palette to the plate, as he says) is accountable under the new law.
In Australia the government is investigating a full cost recovery regime for its infrastructure spending, said Althaus. However, he said most of the taxation is directed at the trucking industry rather than other road users such as motorists.
“There’s a sense the trucking industry is a lightning rod,” he said.
De Pretto said road-user charging is inevitable, but he added all modes and road users must share the cost. He also suggested governments look to the Chinese model of road user taxation, where the most efficient vehicles pay the lowest road-user taxes.
“In China the most fully-loaded truck with the most weight pays the least in road-user taxes,” he pointed out.
In New Zealand, trucking companies don’t have to pay any diesel tax, said Friedlander. He said the industry doesn’t mind paying for the damage it creates to infrastructure as long as it’s within reason.
Graves said the U.S. must revisit the way it spends money collected by the Highway Trust Fund. He said too much of that money is spent on bike paths and hiking trails. He said the U.S. trucking industry will accept paying more tax in exchange for a better product at the end of the day.