As we flip the calendar to 2014 and look back at the year that was, the main themes that emerged over the past year are likely to remain with us well into 2014.
The last year started out as one that held a lot of promise, which ultimately gave way to disappointment as a strong economic renaissance failed to materialize. Instead, we got what some described as “the new normal” or “the great ok” – sluggish growth that was difficult to get excited about.
Slow growth is still growth, but after surviving the Great Recession, motor carrier executives, trucking company owners, drivers and owner/operators all hoped for a more prosperous year.
Looking ahead, most prognosticators say there’ll be more of the same next year, some even hinting we’re due for another recession within the next two years. You may want to pour a little extra rum into your Egg Nog.
Aside from a sluggish economy, it looks as though the pace of mergers and acquisitions activity will pick up, if the last few weeks is any indication. After what some observers characterized as a sluggish start to the year, there were several key deals announced in recent weeks, which you can read about in more detail beginning on this month’s cover.
It looks as though consolidation in the marketplace will continue to be a trend moving into 2014. Manitoulin and Celadon have both established themselves as bona fide buyers as they look to expand their Canadian footprints.
Another trend that picked up steam in 2013 is the increased viability of natural gas as an alternative to diesel fuel. In the past year, we saw several more carriers add natural gas to their fleets, and further product is coming online over the next year. There are also rumblings of some fairly substantial fuelling infrastructure projects which could be just months away.
As the fuel becomes more easily accessible, and a wider range of natural gas-fuelled product becomes available, there’s little doubt more fleets will embrace the technology – even if diesel prices have been reasonably stable over the course of the past year.
Another trend from the past year that isn’t going anywhere is the regulatory onslaught both here in Canada and south of the border. In July, the US adopted new hours-of-service rules that in practical terms are adding significant costs to the industry while reducing productivity.
There’ll be more – not less – regulation foisted upon the industry in 2014 and beyond, which will further strangle productivity and force carriers and shippers to collaborate more closely than ever to ensure every ounce of waste is driven from the supply chain.
And of course, reduced productivity means the need for more drivers to do the same amount of work. The driver shortage continues to be one of the most pressing issues facing the trucking industry. I know, I know…many of you believe the driver shortage is a myth, that it’s wages and working conditions that have caused perfectly capable professional drivers to sit on the sidelines.
That may be true, but it’s still a driver shortage. If there’s a lack of people willing to do the work that’s required, it’s a shortage, regardless of the causes behind it.
The Canadian trucking industry is on pace to be 25,000 drivers short of what it will require by 2020, representing about 14% of the driver population. Factor in lower productivity, which is possible – even likely – and you get a gap of 33,000 drivers.
This data is available for all to see on the very well designed DriverShortage.ca Web site.
It’s going to take improved working conditions combined with higher pay to fill these positions. Everybody knows that. But how will it be achieved in a hyper-competitive industry such as trucking?
As we head into 2014, I suspect the driver shortage will remain one of the most pressing issues facing the industry.