TORONTO — Now that its longstanding labor issues are finally settled, Highland Transport is gearing up for what is hoped to be a small rebound in the truckload market over the next year.

Speaking with todaystrucking.com shortly after a majority of the carrier’s unionized owner-operators voted to accept a new contract and restructured pay system, Division President Jim Houston says Highland is in good shape and is ready to begin increasing marketshare again.

The company has spent the last three months trying to get its owner-ops to accept changes to their collective agreement before it was set to expire in December 2008.

After voting down an initial proposal in June, the drivers were urged by their Steelworkers union last week to accept Highland’s final offer, which, among other concessions, asked drivers to give up their 48-cent-per-liter cap on fuel for a new fuel surcharge program that requires that operators pay the full cost of diesel upfront. The new deal also cuts the rate per mile by 2.5 cents for all non-heavy-haul loads and empty miles.

Houston admits the TransForce-owned company was serious about shutting down if the drivers rejected the new terms a second time. "If we weren’t successful in rearranging the compensation package, it is very likely that the marketplace would not have let Highland stay in business," he says in an interview.

It’s no surprise many owner-ops resented the drastic changes, but Houston defends the company’s actions, adding it was the only way to stay unionized as well as competitive in central Canada’s general truckload sector.

Cuts were necessary to compete with
non-unionized truckload carriers, says Houston.

"The non-union truckers we’re competing with are able to adjust their pricing a lot quicker and simpler than we could have. It took basically three months just to get this done, whereas if you’re not unionized, you simply go to your workforce and say ‘beginning next Monday we can only afford to pay this’ and you do it," says Houston, who adds that before the contract changes, Highland was arguably the top-paying truckload carrier in the country.

Although he understands it was hard for the drivers to give it up, Houston says that a fuel cap at 48 cents a liter is no longer practical considering the recent surge in oil prices — a point also not lost on Teamsters Financial Secretary David Neale, when he was interviewed by TT.com last week.

"The circumstances are completely different than what they were three years ago, much less five or 10 years ago," says Houston. "In 2000 when Highland put the fuel cap in place, the difference in the fuel surcharge was 5 percent and customers could live with paying that. Today, it’s closer to 45 percent and who can afford to pay anywhere near that much?"

About 25 owner-ops reportedly left Highland between the two votes over the summer. While some might have left bitterly over the contract revisions, Houston says many simply chose to retire; and a few of those have since agreed to return as company drivers.

"Much of our owner-operator force was older. So they had a decision to make," he said. "When you’re 57 and you have a truck that’s 500 hp that you don’t need, what are you going to do for fuel? They may as well retire."

Houston stresses, however, that the company is not trying to wean itself off of owner-op-based manpower. "Not at all. As a matter of fact, we’re putting plans in place this week to recruit hard and hire a lot of owner-ops," he says. "We think Highland is a good company and it’s got a lot of good clients that want to use us."