Truckers issue ultimatum: raise rates or suffer crisis
Ottawa, Ont. — Canada’s largest trucking associations are calling for shippers to pay higher rates or suffer the consequences, such as the shutdowns that hit Quebec last fall.Rack prices for diesel sold in Toronto jumped about 10 cents per litre in the last two weeks of January, crashing through the 60-cent barrier, and retail prices are nearing 70 cents per litre with no end in sight. The 176 per cent hike in fuel prices in the past year has been unprecedented since the Gulf War. In B.C., prices have doubled since the first week of February 1999, with the delivered prices of diesel up about a third over the same period.
“Motor carriers that can’t recoup the higher fuel costs from their shippers, can’t pay their independent contractors enough to make it worthwhile keeping their trucks on the road,” says David Bradley, president of the Ontario Trucking Association and CEO of the Canadian Trucking Alliance. Yet the results of carrier attempts to impose fuel surcharges have been mixed in the last month.
“The big manufacturers like to pad or retain their margins on the backs of their suppliers, and they often have the size and muscle to get away with it,” Bradley says, adding that shippers can either pay the rates, “or they can wait until things reach a crisis situation, which no one will be able to afford.”
But the managing director of Canada’s largest association of shippers balks at suggestions that her members aren’t paying their share of increasing fuel costs.
“I don’t know of any member that is not already paying a fuel surcharge,” the Canadian Industrial Transportation Association’s Lisa MacGillivray says.
The British Columbia Trucking Association has gone so far as to publish suggested rate increases as high as 10.5 per cent for those who pay 60 cents per litre and see fuel soaking up 30 per cent of their operating costs.
MacGillivray counters that trucking associations are wrong to ask for a blanket increase because every contract should be considered separately.
“A surcharge, these cross-the-board things, it has nothing to do with a particular carrier’s operating costs…Shippers are willing to listen but you have to quantify your requirements,” she says.
Bickering aside, there is good news on the horizon. The factors that fueled the sharp price increases are easing, according to analysts, and pump prices are expected to start dropping soon.
Road improvement money hidden in Ottawa’s coffers
Winnipeg, Man. — Manitoba Highways and Government Services Minister Steve Ashton has released a new transportation study showing that Ottawa now has the funds to create a national transportation infrastructure program.
The report shows that the current annual federal transportation surplus is almost $3 billion and growing.
“We know that for every dollar the federal government collects from road fuel taxes, about five cents is returned to the provinces in terms of spending on infrastructure,” Ashton said. “…We are calling on the federal government to pump the revenue it collects from fuel taxes back into the provincial infrastructure.”
The study, “Federal Transportation Spending and Revenues, 1987-1997”, conducted by the University of Manitoba Transport Institute, concludes that federal transportation income has exceeded spending by almost $10 billion since 1992-93. Over $38 billion in fuel taxes has been collected by the federal government since 1987-88, and fuel taxes made up 81 per cent of all 1997-98 transportation revenues. Fuel taxes are now 27 per cent higher than in 1987-88.
The report also states that if this trend continues, the total federal surplus over the four years 1999-2000 to 2002-03 will be almost $14 billion.
Transforce to acquire TST Solutions Inc.
Saint-Laurent, Que. — TransForce Inc. is acquiring all the shares of TST Solutions Inc., an Ontario carrier operating throughout North America. The closing date is expected to be in March.
The transaction involves $85 million, to be financed through convertible debentures and a term loan.
Following the acquisition, TransForce will have a workforce of more than 3,100 employees, as well as a fleet of tractors and trailers comprising 7,000 units, and it will employ the services of 550 owner-operators. Sales will approach $400 million per year.
PAPS is now available at the Lewiston-Queenston Bridge
Niagara Falls, Ont. — The Queenston-Lewiston Bridge linking Ontario and New York State is now capable of dealing with U.S. Customs’ recently introduced Pre-Arrival Processing System (PAPS), which relies on information accessed using bar codes.
Companies such as Roadway Express, FSI, Great Lakes Transport, Yellow Freight and Canadian Freightways have been involved in the program, having shipments cleared on the inspection line or — when multiple shipments are involved — cleared in minutes once they’re inside a Customs warehouse, the bridge commission says.
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