TORONTO — Even though tight transportation capacity has allowed truckers to haul in good coin the last few years, profit margins among carriers are not anywhere “near thick enough” to be able to absorb skyrocketing costs like fuel.

So says Canadian Trucking Alliance CEO David Bradley in a speech to the Book & Periodical Council’s (BPC) at its annual freight and distribution conference.

Fuel costs are up over 25 per cent since the beginning of the year — and over 60 per cent in the past two years, he noted. Adding the introduction of ultra low sulphur diesel fuel will likely add several more cents to the cost of fuel per litre and will have less energy content than existing diesel. As well, the new, 2007 smog-free truck engines will enter the market this fall and are expected to cost up to $10,000 more to purchase as well as being more expensive to operate and maintain.

Speed limiters will help bring freight rates in
line with compliance costs: CTA

Regardless of whether trucking capacity is as tight in some regions and markets as it was a year ago, operating costs still need to be paid for and the major source of tight capacity — the shortage of truck drivers — is only going to worsen, says Bradley.

“The trucking market remains very tight in Western Canada reflecting strong economic growth,” continued Bradley. “While automotive and forestry is dragging down growth somewhat in the rest of the country, any additional truck capacity that has resulted will be short-lived. The economy in those regions will bounce back, but even until then the deepening driver shortage will ensure that capacity is tight. Trucking has the oldest labour force in the country and we are having a tough time attracting young people to the business.”

Improved compensation for drivers will be a part of the long-term solution to the driver shortage, said Bradley. “Wages, which are a carrier’s number one cost component, are under upward pressure, but so are all of the other major cost components.” He says.

A new culture is emerging within the industry, one based on professionalism and compliance, said Bradley. “The carriers that belong to CTA and the provincial associations are saying that competition should be based on service and price; where price includes the cost of compliance — not on who can bend or break the rules or feel pressured to do so.”

That is why, he said, the associations support regulatory measures such as the mandatory activation of speed limiters and developing the parameters for the mandated use of electronic on-board recorders.

“A new, stronger trucking industry is emerging from the bloodbath of deregulation,” said Bradley. “One that values profit more than volume and regains the respect of the public.”