It’s Time To Stop Playing The Blame Game (February 01, 2010)
February 1, 2010
While they make us human, emotions by their very nature are irrational, or as Mr. Spock used to say they are illogical, even though they may be fully justified depending on the circumstances that give...
While they make us human, emotions by their very nature are irrational, or as Mr. Spock used to say they are illogical, even though they may be fully justified depending on the circumstances that give rise to them. Over the past year or so, the Canadian trucking industry has experienced some of the emotional lows that reflect the difficult times brought about by the onset of the Great Recession.
Fear, desperation and panic were the emotions that crept into the decision-making processes of many carriers. More recently, despite signs that things may have hit bottom and that the industry has possibly gotten through the worst, carriers are still not feeling optimistic.
The economic outlook remains fragile. But it’s more than that. Despite the positive (relatively speaking) economic signals, despite the pick-up in volume in certain laneways, despite the reductions in capacity that the industry has undertaken, and despite the incredible efforts to find even greater efficiencies, freight rates which by now you would think should be starting to firm, have not yet begun to recover.
Virtually every carrier out there can tell you how someone else has come along, cut the rate below what they consider to be compensatory. The choices: walk away or meet the market.
Shareholders and bankers are concerned, tightening the screws even further. As a result, the mood of the industry is sour and borne out of frustration. The prevailing emotion at times has degenerated into one of anger.
As a result, the blame game is in full swing. And, there are lots of targets; lots of blame to go around if you want to get into that. Shippers for being greedy; load brokers and 3PLs for taking advantage and not having enough skin in the game; governments and trade associations for not doing enough; big carriers for undercutting the small carriers; small carriers for undercutting the big carriers; suppliers for charging too much; lenders for not lending; lenders for lending too much to the wrong people.
The list goes on. And, the reality is that everyone shares in the blame to some degree or another.
So, we can continue to point fingers and continue to blame everyone else, or we can start to take more responsibility for our own businesses and take our industry back from whoever it is we think is controlling or manipulating it. In the end, we all know that no-one else is going to do it for us.
You know what the problems are. And, I think most carriers also know what has to be done to fix the problems. I know some will say that nothing will ever change; that this is the trucking industry. We have to change that mindset.
This is not the industry of even five years ago. So much has changed. Weakness breeds continued weakness. It can be a self-fulfilling prophecy. But it doesn’t have to be that way.
I also believe that most shippers know that a market correction has to come, that things have been way overdone and current rate structures are not sustainable. Capacity is tightening. Carrier costs are going to be heading up. Most trucking employees have not seen a raise in years -some have taken cuts.
An acute driver shortage is a certainty based on current demographics. The fleet needs to be reequipped and the new generation of smog-free vehicles will be more expensive.
New safety and environmental regulations will require new investment in on-board monitoring technologies, electronic stability control systems, aerodynamics, etc.
Fuel taxes, tolls and other charges will be under upward pressure as governments struggle to maintain infrastructure in the face of massive deficits. Border security costs continue to escalate. Carriers need to earn a decent return on investment in order to meet these obligations.
I do not run a trucking company. Some will say I have no right and no credibility to tell people what they should be doing.
However, sometimes a sympathetic observer can see and say some things that those in the direct line of fire can’t.
I believe that most people who run trucking companies agree with me when I say that if as an industry we do not step up, if enough of us do not show the required level of leadership, then we will only have ourselves to blame for what the market -and the bankers -may deal us.
In my 25 years in the business, I have been fortunate enough to work with and learn from so many great industry leaders. The industry may be battered, but it is not down for the count.
As one of our own recently said, “We are at a point in time, not the end of time.”
As quickly as things went sour, they can turn the other way. I am convinced that we have the leadership to enable us to come through this, and those who remain can be stronger than ever and prepared to take full advantage of the opportunities that present themselves.
-David Bradley is president of the Ontario Trucking Association and chief executive officer of the Canadian Trucking Alliance.