TORONTO, Ont. - Will a rising loonie continue to hinder Canadian truckers in 2005? How about the driver shortage? And what about border problems, hours of service, new rules about truck safety, and whatever else the new year has up its sleeves?
TORONTO, Ont. – Will a rising loonie continue to hinder Canadian truckers in 2005? How about the driver shortage? And what about border problems, hours of service, new rules about truck safety, and whatever else the new year has up its sleeves?
“The wild cards in the deck will be the U.S. economy and the value of the Canadian dollar,” predicted David Bradley, CEO of the Canadian Trucking Alliance and president of the Ontario Trucking Association, during a recent speech.
According to Bradley, Canada’s trucking industry could be affected by “…a continued appreciation of the Canadian dollar against the U.S. greenback, which in turn could impact on the competitiveness of Canadian exports and affect the pricing of transportation services.”
But whether the Canadian dollar will continue to appreciate is still open to debate, at least according to Stephen S. Poloz, the chief economist for Export Development Canada and a well-known authority on Canadian trade trends.
In his report, titled “Should we prepare for a much stronger loonie?” Poloz argues the Canadian dollar is only experiencing a temporary high, due to a number of factors, including the rising demand/price of base metals and oil (Canada is an exporter of both, to growing economies like China’s), and fast rising interest rates (as compared to the U.S.). As supply tensions ease, the value of the Canadian dollar should fall, to around U.S. 75-78 cents next year, predicted Poloz.
Loonie growth or no, Bradley remains optimistic that ongoing capacity demand will smooth out the bumps.
“A modest softening in economic activity would likely have little impact on the capacity situation that is driving a lot of the changes underway in the trucking industry,” he said.
As for the ongoing driver shortage, Bradley said he expects it will get worse.
Border issues and hours of service will also be a major focus, he added.
“The next few months will be critical in determining what the border will look like,” Bradley said. “There is a spate of new measures being introduced over that period – U.S. Customs prenotification, US-VISIT, hazmat credentialing and a transportation worker ID card.”
All eyes will also be on the outcome of the legal and political wrangling over what the U.S. hours of service regulations will ultimately look like, Bradley said. And the long-awaited new Canadian federal hours of service regulations should also be finalized early in 2005.
Hours of service will be just one of the items on the agenda of the Owner-Operator’s Business Association of Canada (OBAC), said association head Joanne Ritchie. (The association didn’t support the 18-hour window, see more on this in the article on page 16.)
OBAC will also be encouraging owner/operators to take advantage of the capacity crunch by raising their rates and charging for waiting time, Ritchie said.
“The time has never been better for owner/operators to go after the rate increases they need,” said Ritchie. “Tight capacity is translating into willingness on the part of shippers to pay for reliable, value-added transportation services – a good opportunity for service-oriented, business-savvy, owner/operators to enhance their profitability.”
The association will also be working on developing business tools and resources for its members, as well as encouraging them to join efficiency enhancing programs like the Free and Secure Trade program (FAST) for border crossing, Ritchie said.
As for lobbying activities, OBAC will be joining the push for better border and highway infrastructures, including increasing and improving rest stops along Canada’s roadways.
“Stabilizing OBAC’s finances will be a priority for the organization – a strong voice will require a strong financial position. A special challenge will be managing the debt we were saddled with by the theft of our start-up funding,” said Ritchie.
“We’ll continue aggressive campaigns to recruit members and attract investors. One focus will be the development of strong provincial caucuses needed to address important regional issues, such as Marine Atlantic service on the East Coast.”
Speaking of regional issues, the industry’s health in Ontario will at least partially depend on governments coming up with mid-term solutions to problems revolving around inadequate infrastructures at busy commercial border crossings like Windsor, said Bradley.
“Also we’ll be watching for whether the province maintains its billion dollar commitment to highways given the government’s fiscal woes. As well, we’ll be pushing for a more effective regulatory regime for truck safety and a thorough review of Drive Clean.”
As for private carriers, first on most industry leaders’ wish list might be some resolution to the hours of service issue, said Bruce Richards, head of the Private Motor Truck Council of Canada.
“It’s gone on far too long, and far too much effort has gone into this project to allow it to be sabotaged by anti-trucking elements, or to be waylaid by others intent on further delay. Let’s recognize that whatever we finally agree on will not be perfect, and accept that the years of discussion and research may have gotten us as close as can be reasonably expected to a safe and fair system. And then implement it,” Richards said.
“My second wish would be to have the federal and provincial governments recognize that commercial truck driving is a skilled profession, not some throwaway job that anyone can do. With that accomplished, we could move toward allowing skilled professionals to come to work in Canada, and direct training funds appropriately so that we can develop our home grown talent.
“And third, I’d wish for some resolution to the ongoing crisis at the U.S.-Canada border – a crisis that is impeding trade between two very large trading partners, who until fairly recently were pretty good friends.”
Driver recruitment and retention will of course be the main focus of ongoing research by the Canadian Trucking Human Resources Council, said executive director Linda Gauthier.
The CTHRC will be looking for potential sources of driver recruitment, documenting recruitment and retention best practices and examining the image potential recruits currently have of truck driving as a profession, Gauthier said.
“We already have anecdotal evidence of this but what we want is cold hard facts,” Gauthier said.
The CTHRC will also be trying to identify the best ways to go about recruiting immigrants and establishing orientation and common testing procedures for them.
And the association will continue to try to get truck driving recognized as a skilled occupation, Gauthier said.
As for retaining existing drivers, the association will be upgrading its driver recognition program.
“We’ll be upgrading our existing program to help not only to assess drivers’ current level of professionalism but also identify gaps in knowledge and the training to go along with it.”
The program will also be expanded to include dispatchers as well. And the CTHRC will establish a revised accreditation process for driver training schools, Gauthier said.
“We’ll be launching a new curriculum in the spring.”
Coordinating the efforts of governments and industry stakeholders will of course be an undercurrent of all projects next year, added Gauthier.
Other issues that will have an effect on carriers both in Ontario and throughout Canada will be issues directly affecting equipment manufacturers, said Allan Tucker, executive director of Canadian Transportation Equipment Association (CTEA).
Foremost among these is the current tire shortage, Tucker said.
“(Trailer) manufacturers have traditionally purchased and installed tires on equipment to meet the spec’s of the buyers, but now tire manufacturers have cut them off because of a rubber shortage and manufacturers are having to scramble around to get tires on equipment, unless customers can supply their own tires,” Tucker explained.
Thanks to the rising cost of the basic ingredients for tires, trailer manufacturers are being forced to buy their tires from dealers rather than directly from the manufacturers, Tucke
“If tires are costing more to make, it makes more sense for manufacturers to sell their tires to dealerships rather than directly to other equipment manufacturers,” Tucker said. “There’s a better profit margin that way.”
Under the circumstances, it’s logical to assume that the cost of equipment could climb.
Hopefully that won’t happen, said Tucker.
“There are some companies, like Bandag, that are coming up with retread programs for manufacturers,” Tucker said.
Tucker expects other shortages, like the steel shortage, to take their toll on manufacturing.
Other concerns include the reform of certain vehicle configurations in Canada, including recent changes to trailer guard requirements.
“The new requirement only kicks in in 2007, but we’ll be doing research to find out how our members want to deal with it,” said Tucker.
The association is also anticipating changes stemming from a review of air brake systems on commercial vehicles, Tucker said.
“When the regulations governing air brake systems in Canada were first written they revolved around tandem axle trailers, but now we’re dealing with trailers with multiple axles,” Tucker explained. “What we need to do is come up with recommended practices for these.”
The CTEA is also attempting to organize a buying group for liability insurance for equipment manufacturers, Tucker said. With that in mind, the association has already offered to sponsor a Workers Safety Insurance Board group for truck equipment manufacturers.