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What’s in Store for 2004?

CALGARY, Alta. - What's in store for 2004? According to some, better times. For others, full on disaster. But no matter how you look at it there's no question that things are going to get even more in...

CALGARY, Alta. – What’s in store for 2004? According to some, better times. For others, full on disaster. But no matter how you look at it there’s no question that things are going to get even more interesting than last year.

Truck West spoke to association heads and industry insiders across the country to get an idea of what the industry has to look forward to, or dread, as the case may be.

CTA optimistic

Nothing could have been more optimistic than Canadian Trucking Alliance CEO David Bradley’s speech to delegates at the Ontario Trucking Association annual convention in November.

“2004 has got to be better than 2003,” said Bradley, also president of the OTA. “Perhaps no industry is as reflective of the overall economy, than trucking. And 2003 was a tough, tough year for most carriers.”

The list of factors that visited hardship upon the industry over the last year seems endless – the war in Iraq helped push up the price of diesel fuel; insurance premiums continued to skyrocket; the Canadian dollar appreciated by 20 per cent almost overnight; the costs of all the new security initiatives began to hit home. On top of that we had the SARS crisis and the mad cow scare.

“It’s rough enough in normal times in the trucking industry, but having all these things occur in the same year is extraordinary,” Bradley said.

But for carriers that made it through 2003, Bradley saw better times ahead.

“There is no doubt that the U.S. economy is picking up steam – all the signals point in that direction – and that will boost Canadian economic prospects too,” he said, adding this pick-up in economic growth “will further tighten capacity in the trucking industry, creating even better conditions for a meaningful and sustainable correction in freight rates.”

“The conditions are ripe (for rate increases),” Bradley added. “But it’s up to the carriers to make it happen.”

According to Bradley: “2004 will also be a critical year on the regulatory agenda,” citing the introduction of new U.S. hours of service rules Jan. 4, 2004 and the ongoing battle over whether Canada will adopt a sleeper berth exception as part of its own hours of service reforms, as major concerns. Aside from the “key security proposals” coming into force in the States (prenotification, FDA, hazmat, etc.) there’ll be plenty going on here at home.

The new hours of service regulations, with or without a sleeper berth exception, are expected to be published in Part Two of the Canada Gazette early in the year, said Brian Orrbine, chief of the Motor Carriers Road Safety Directorate of Transport Canada.

British Columbia looking up

In B.C., where insurance premiums are determined by the provincially controlled Insurance Corp. of B.C. (ICBC), there is some much welcomed stability, which means carriers there will have one less worry to contend with in 2004.

“Insurance premiums are not expected to rise,” confirmed B.C. Trucking Association (BCTA) president, Paul Landry. “We’re not expecting to get hit as hard as before.”

There are more reasons to be optimistic in B.C.

“We see real improvements over the course of 2004 in order to facilitate trade,” said Landry. “There will be hundreds of millions of dollars in infrastructure investments.”

One of the most welcomed will be the addition of a FAST-only lane at the well-travelled Pacific Highway border crossing. That’s expected to be completed by June or July of 2004.

“Right now, it’s still hurry up and wait (for FAST carriers),” said Landry, noting the real benefits of being FAST-approved won’t be realized until the exclusive lane is opened.

There are also many other infrastructure improvements in store for 2004 – including the twinning of some well-travelled trade corridors.

Other good news for B.C. carriers includes the fact that the Port of Vancouver is expecting another strong year.

“I would anticipate a growth in container traffic,” predicted Landry. “The Port of Vancouver is doing quite well and they’re anticipating growth for 2004.”

But not all news is good news in B.C. heading into 2004. There are issues facing individual sectors – most notably the forestry sector.

“Right now, we’ve got the softwood lumber dispute which is an issue,” said Landry.

“The softwood lumber issue is a real concern and (the health of the forestry industry is threatened).”

Exacerbating that was the fact the IWA union recently went on strike, potentially bringing the coastal forest industry to a grinding halt.

“That’s certainly not going to help the situation,” observed Landry, just hours after the strike was officially launched.

Prairies worried

Serious concerns persist about the fate of many livestock haulers domiciled in the Prairies.

“That’s going to be an ongoing issue until either the border is re-opened or until there’s another plan of getting those animals processed,” said Kim Royal, executive director of the Alberta Motor Transport Association.

In Manitoba, where livestock hauling typically accounted for 100-120 loads of cattle per week prior to the ban, many cattle haulers have shifted to hauling other freight.

“A repercussion from that of course has been a downward pressure on rates,” said Bob Dolyniuk, general manager of the Manitoba Trucking Association.

A proposal put forth in the U.S., which would see live young Canadian cattle approved for export into the U.S. in early 2004, could bring relief. And there’s also talk of building a massive Western Canadian slaughterhouse, which would enable Canada to produce its own meat and send it to the U.S., reducing the need for live cattle exports. An issue that’s been on the mind of many Albertans recently, and not just truckers, is the insurance reform that has been kicked around by the provincial government.

Most recently, the province imposed a rate freeze which insurers cannot break unless there’s a change in conditions.

Royal said it’s too soon to say whether this legislation will benefit commercial carriers.

“We’re not sure how that will affect commercial carriers in that, if you have 200 trucks, you’re bound to have some claims over the year,” he explained.

“So, does that mean conditions are no longer the same because you had one claim instead of no claims? We don’t know how it will be interpreted at this point.”

He said the ongoing issue of increasing insurance premiums will continue to be an issue.

A potentially troublesome issue in Manitoba is a fuel tax increase. The Manitoba government has been conducting a review the last two years, called Transport Vision 2020, to examine transport needs down the line. There have been suggestions from some quarters that the review will indicate a need for a fuel tax increase provincially, Dolyniuk said.

“We have the city of Winnipeg talking about a five cent per litre civic fuel tax which obviously would have a significant impact on our industry locally. So based on those sort of indications we are encouraging our members to increase their rates,” he said.

Among other issues affecting the MTA membership are the anticipated reintroduction of a truck productivity improvement fund, which is based on a user-fee system to a certain extent, and spring road restriction policy changes put into place back in 2001 that have had an adverse effect on the industry and against which the MTA is still lobbying.

“We also expect a biofuels bill to be reintroduced either at the end of November or next spring which will allow for enabling legislation for biodiesel, which has an impact on us. How far the legislation would mandate the use of biodiesel is an unknown.

“And we’re looking for the government to legislate a third-party logistics liability bond. That’s an issue that we put before the government almost a year ago and was precipitated by the TCT Logistics bankruptcy. We’re looking at a minimum of CDN $250,000 to 500,000 bond,” Dolyniuk said.

In Saskatchewan, one of the provincial trucking association’s main concerns is the use of long combination vehicles (LCVs).

“We will continue to press our government to change current LCV regulations to level the playing field with both of our neighbouring provinces,” said Jim Friesen, general manager of the Saskatchewan Trucking Association (STA).

“At present both Alberta and Manitoba LCV carriers have a competitive advantage over Saskatchewan LCV carriers because of our outdated regulations.”

The STA also has concerns about the province’s Workers Compensation Board (WCB) and ever-rising premiums.

“We will continue to meet with WCB in effort to reduce our current premiums and to work closely with the Safety Council to reduce work place injuries,” Friesen said. “We must also work to get injured workers back to the job sooner than what our past and present experience is, we feel the system is being abused at great cost to all employers.”

Other issues of concern to the STA affect the entire industry as a whole: the ongoing driver shortage; the uncertainty regarding the new hours of service regulations and border issues.

For the most part, Friesen said, 2004 will pose many of the same challenges as 2003 did.

“We see 2004 as being similar to 2003 with many outstanding issues to be resolved and new challenges to be met,” he said.

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