MONTREAL, Que. – GE Capital Solutions has conducted a global study that shows high fuel costs, a shortage of drivers and excessive regulations are not problems unique to truck fleets in Canada.
The study surveyed more than 1,200 transportation professionals in Canada, the US, the United Kingdom and France. Nearly 70% of the trucking business leaders surveyed felt high fuel prices place their business at risk.
Sixty-nine per cent of respondents claimed the driver shortage was a problem and 40% also viewed excessive regulation as a threat. The vast majority of fleets involved in the study said they are exploring new methods for achieving efficiencies and realizing cost savings.
Surprisingly, low business volumes were not a major concern of the executives questioned. Only 8% of Canadian respondents were concerned about low volumes, compared to 9% of US respondents and 12% of those from the UK.
“The transportation industry’s contribution to the Canadian GDP rose nearly 80% in the past 10 years and is vitally important to our countrys 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.”
The study also revealed about 90% of fleet executives believe fuel prices will increase over the next year. They reported fuel accounts for about a third of their overall costs. Only 7% of respondents are using alternative fuels, the study revealed. Canadian executives proved to be the least likely to consider using alternative fuels.
Methods employed to reduce fuel expenses among respondents included: tightening supplier management (41% overall, 37% in Canada); seeking alternative green initiatives (36% overall, 36% in Canada); and leasing trucks to free cash flow (18% overall and 15% in Canada).
As far as driver demand is concerned, 22% said a shortage of drivers will impact their ability to deliver goods on time to existing customers. Canadian respondents suggested 13% of additional freight opportunities are at risk of being impacted.
Carriers say they are offering more paid leave to drivers as their primary retention tool (nearly 50% in Canada say they are doing this). Other measures include reducing paperwork (36%) and improving cab facilities (31%). Interestingly, in France improving cab facilities is the number one way to attract and retain drivers.
When it comes to controlling cost, 25% of Canadian respondents said the best way to achieve this is through maintenance. They also claim to be shaving operating costs through insurance, salaries, tires and repairs/spare parts.
Those who are opting to lease vehicles rather than purchase them say they are doing so because of a reduction in maintenance fees and improved cash flow. Having said that, 53% of Canadian respondents said they would be acquiring new trucks in the next year.
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