This year’s Surface Transportation Summit, held Oct. 15 in Toronto, was a huge success. It sold out, bringing together nearly 400 fleet managers and shippers under one roof to discuss common issues. Shipper-carrier collaboration was once again a hot topic, but in my opinion the unofficial theme of this year’s Summit was scale, and the need to add it in a disciplined manner.
A good person to speak to this topic was Mark Seymour, whose Kriska Group recently entered into a joint venture with Mullen Group to form a new entity that will add considerably more scale to its operations as it looks to expand further through acquisition.
Mark predicted American fleets will begin moving into Canada and he felt adding capacity was the most effective way to stave off this new threat.
“Big customers are looking for capacity right now,” he said. “There are more discussions with shippers around capacity now than price.”
That’s an incredibly telling statement, and one that should be welcomed by fleet owners. That statement, more than any other, indicates the pendulum has swung back in the favour of the transportation companies.
We heard throughout the day that carriers are looking to add scale but in a disciplined manner. Mark said carriers should be taking this opportunity to fix “what’s broken” within their operations, rather than simply adding trucks.
“There are lots of opportunities right now to work on the issues within our business as it relates to profitability and discipline,” he explained. “We can take this opportunity to fix things that are broken. There has never been a better time to do that; to tighten our network, charge for things we haven’t been able to charge for in the past, to adjust short-term pricing strategies and not lock down into a three-year pricing model because our costs are going up too quickly. We are never able to engineer solutions and get waste out of the system if we’re forever going back (to customers) year after year, wondering if we’re going to be able to keep the business in certain lanes and certain markets.”
We also heard that consolidation will continue as fleets that can’t offer sufficient capacity to their shippers find it more difficult than ever to compete. Here’s more on Mark’s comments at the Summit.
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