MONTREAL – No doubt there are many differences between trucking in Miramichi and Montpellier, but a new survey of 1,200 trucking industry execs in several countries shows an all-too-common link: A uniform concern over rising fuel costs.

About 70 percent of trucking company owners, managers, and finance directors in Canada, the U.S., U.K. and France believe that fuel prices are placing the business at risk, according to the international survey by GE Capital Solutions, a global provider of financing for the commercial trucking industry.

The survey also reveals that driver shortages (69 percent) and excessive regulation (40 percent) are top threats to business performance. Such concerns are compelling managers (92 percent in the U.S., 87 percent in France, 86 percent in Canada and 80 percent in the UK) to explore new methods for achieving efficiencies and additional cost savings.

Conversely, with global trade continuously on the rise, low business volumes were among the least of international executives’ concerns — most likely to be seen as a problem in the UK (12 percent) and least likely to be a problem in the France (6 percent), vs. the U.S. (9 percent) and Canada (8 percent).

From Canada to the U.K., truckers agree:
The price of fuel is hurting business

Even with a recent decrease in fuel costs, nearly nine in ten trucking executives believe fuel prices will increase over the next 12 months, and report that fuel costs represent approximately one-third of their overall costs.

However, despite an urgent need to address the impact of rising fuel prices on business performance, the study reveals only 7 percent are currently using alternative fuels, with the U.S. leading in this area. American truckers were also most receptive to the idea of using alternative fuels (65 percent), while Canadian executives are the least likely (45 percent).

“The transportation industry’s contribution to the Canadian GDP rose nearly 80 percent in the past ten years and is vitally important to our country’s economy,” said Patrick Palerme, president and CEO of GE Capital Solutions Canada. “Seeking new methods for achieving greater operational and financial efficiencies to address economic and regulatory pressures will clearly remain the top priority for trucking industry leaders over the next 12 months.

“As business volumes continue to increase as expected, trucking companies will have to seek alternative ways of managing these market pressures to take advantage of future growth opportunities and maintain a healthy balance sheet,” he said.

In addition to passing costs to shippers, executives are focusing on other options to offset rising costs, including:

Tightening supplier management (41 percent overall), (37 percent in Canada); Seeking alternative green initiatives (36 percent overall), (36 percent in Canada), or leasing trucks to free cash flow (18 percent overall), (15 percent in Canada).

Driver Demand:

Respondents report that they are struggling to keep up with demand for drivers. A fifth (22 percent) of trucking businesses believe the shortage will impact their ability to deliver goods on time to existing customers, and are concerned the situation will impede their ability to attract new business.

In Canada, in particular, 13 percent of additional freight opportunities are at risk of being impacted, execs say, and as a result, companies are seeking ways for attracting and retaining manpower. More paid leave was cited as the number one recruiting and retention method across the U.S. and Canada (nearly 50 percent) and the U.K. (41 percent), followed by reducing paperwork (36 percent) and improving cab facilities (31 percent). Conversely, in France, better cab facilities were cited as the best method for attracting drivers.

Identifying Additional Cost Savings:

One in four trucking leaders in Canada cite maintenance as the best areas for cost savings, followed by insurance costs (12 percent) and salaries, tires and repairs/spare parts (all 7 percent), according to the survey.

Nearly half (47 percent) of international trucking businesses claim that purchasing new trucks could greatly reduce business costs and save management time. In fact, more than half (54 percent) of international trucking businesses overall intend to acquire new trucks in the next year. Of Canadian trucking businesses in particular, more than half (53 percent) intend to acquire new units in the next twelve months.

That number, however, goes against the consensus of an industry-wide downturn in new class 8 sales next year. North American sales are expected to fall by about 30 percent because many large fleets pre-bought current equipment to avoid more expensive, EPA-mandated low emission diesel engines which hit the market Jan. 1, 2007.

With more than 20 offices across the country, GE Capital Solutions Canada offers transportation dealers, manufacturers and end users a wide variety of financial services.