CTA president David Bradley stepped aside this month to make space for a special guest column from Ontario Trucking Association chairman Scott Smith.
By now most people involved in the transportation and distribution business – whether carrier, shipper or consignee – are aware of what has been termed “the perfect storm” in the trucking industry.
In days gone by, any one of the higher costs for labour, fuel, insurance and equipment or of compliance with new hours of service, security, safety and environmental regulations, would have been enough to push some motor carriers over the edge and shake the confidence of most.
But despite persistent complaints over thin or non-existent margins, there always seemed to be someone prepared to handle the freight – even if at a loss.
It would now seem even truckers have their limit.
And, with a capacity crunch brought about in large part by a worsening driver shortage, the pendulum has swung – for the first time since deregulation – to a more balanced economic relationship between carriers and shippers.
At this point in time, the window of opportunity to improve returns on investment, to make long overdue repairs to our balance sheets, is still open. Of course, it’s up to the carriers to take advantage of the current market correction.
However, to consider this merely a “long overdue” opportunity to improve company finances would trivialize the difficult environment endured over the past 15 years, as well as the damage that it has caused the industry.
It would ignore the challenges and threats that the results of this have placed on our industry and our economy going forward.
The same winds that are blowing in some fresh air and sunshine on the trucking industry’s short-term financial horizon, also create the environment for the industry to confront some of its old demons and in so doing improve relations with the public, legislators, investors and those that work for us now and whom we need to work for us in the future.
We have the opportunity to accelerate our development as a professional and responsible industry.
I believe we are at a watershed moment in our industry.
We need to determine where we stand and be counted.
Recently, the Ontario Trucking Association, whose members represent about 40 per cent of all trucking activity in Canada approved a series of guiding principles that clearly state what we as OTA members stand for. We believe that:
* For the market to work competition must be fair.
* Fair competition means competing on service and on prices established in compliance with all laws and regulations.
* Laws and regulations are a fact of life and that by taking responsible positions and reasonable and informed – yet firm – approaches to policy-makers and legislators, the industry can influence the development of laws and regulations to ensure they are effective, efficient, equally applied, balanced and designed to deal with real concerns not just paperwork or administrative matters.
* Compliance with all laws and regulations should be encouraged by a balanced mix of sanctions/penalties and incentives.
* Enforcement of sanctions and penalties should be effective, even and efficient.
* Because we share our workplace with the public, we accept an added responsibility to ensure that we operate in accordance with the highest standards of safety and environmental stewardship; that we are members of the communities in which we operate.
* Speeding and aggressive driving are unsafe, wasteful and publicly unacceptable on-road behaviour that will not be tolerated and that all management effort and the full force of the law (including all practical enforcement means) should be used to eradicate them.
* Systems need to be developed and enhanced to identify the truly habitual bad operators and ensure they face added scrutiny and penalties – including the loss of operating privileges – while those carriers that operate safely receive benefits and incentives which provide tangible competitive advantages.
* The trucking industry is above all else a people industry; our employees are our most valued assets and when they succeed, we succeed.
* The modern workplace is evolving and it is in carriers’ interest to better understand the needs of our employees and provide them with the tools, training, resources and incentive to meet them.
* By their actions, operating practices and business philosophies all carriers – and through them all industry participants – have a role to play in helping to shape a more positive public perception of the trucking industry.
* The industry and its employees should attain the recognition and respectful treatment they deserve – from other carriers, government, shippers, consignees and the motoring public – for their essential contribution to the economic and social fabric of the province and the country.
A vibrant supply chain is vital to the health and development of our economies, and society in general.
The industry has proven resilient in surviving the past couple of decades. The question we must ask is: Can we be as resourceful and innovative in shaping the future, as we were reacting to circumstances in the past?
– Scott Smith is Chief Executive Officer of JD Smith & Sons Ltd., a family-owned LTL carrier, warehousing and logistics service provider in Toronto, Canada. He is chairman of the Ontario Trucking Association and a member of the board of the Canadian Trucking Alliance.