TORONTO, Ont. -- The trucking industries in Canada and the US are charting a similar course through recovery from the worst recession of the modern era, and neither is anticipating strong growth in the near future.
TORONTO, Ont. — The trucking industries in Canada and the US are charting a similar course through recovery from the worst recession of the modern era, and neither is anticipating strong growth in the near future.
On the bright side, however, neither David Bradley nor Chris Burruss – heads of the Canadian Trucking Alliance and Truckload Carriers Association respectively – anticipate another plunge into a full-blown recession.
“I think the new normal will be more of the same,” Bradley said during the most recent Driving for Profit seminar on Nov. 8. “I am worried a bit about the US economy. I’m not sure we’re looking at a double-dip, but obviously that does keep a lid on Canadian growth and until the US gets kicking again, that really keeps a clamp on things.”
Bradley added that slow growth is not necessarily a bad thing, however.
“Perhaps we’ll show some more discipline in terms of adding capacity than we have in the past,” he noted.
Burruss said the US can expect continued political gridlock as it enters into an election cycle, and indicated TCA member carriers are reporting improved volumes and rates, yet profitability remains a challenge.
“I would say we’ll see growth, but it’s going to be slow,” he said. “The new normal is probably more peaks and valleys than what we’ve seen in the past.”
Both Bradley and Burruss were interviewed at length by Truck News editorial director Lou Smyrlis, in a far-ranging conversation that touched on many of the most pressing issues facing the industry. Following are some highlights from the discussion:
On US Hours-of-Service revisions
A deadline of Oct. 28 came and went without the anticipated announcement from the US Federal Carrier Safety Administration regarding revisions to the US hours-of-service regulations. When asked where the industry was headed, Burruss said “Back to court, that’s where we’re going.”
“No matter what the rules look like, it’s going back to court,” he continued. “If the industry is happy with it, the pseudo-safety advocates won’t be and if they’re happy with it, industry is not going to be happy with it and our board has told us to take any means necessary to defend the existing rules.”
Burruss said the industry is expecting the new rules to reduce daily driving time and eliminate or change the reset provision.
“From a cost standpoint, it would have an enormous impact,” he said. “We would like to see some more flexibility, but we don’t think that’s going to happen. These changes are going to be pretty tough to adapt to; you’re talking about a fundamental change to the supply chain.”
When asked if Canada would move to adopt the revised US rules, Bradley said “There is no sense at this point at either the federal or provincial levels that there’s an appetite to follow the US in reopening the hours-of-service here.”
Another hot button topic was the impending mandating of electronic on-board recorders (EOBRs), or as the TCA prefers, electronic logging devices (ELDs); a distinction that implies the association supports the use of the devices for hours-of-service monitoring only.
A recent US Court of Appeals decision requiring the FMCSA to revise the wording of its proposed EOBR mandate for carriers with a history of HoS violations does not mean the issue is off the table, Bradley and Burruss agreed.
“This is a reality, it’s going to happen, there is no way (FMCSA) is going to abandon it,” Burruss said of an EOBR mandate. While Burruss said a new rulemaking won’t likely be released prior to the US election, it is definitely coming.
Bradley said Canada at one time showed an interest in taking the lead and implementing an EOBR mandate even before the US does, however that no longer seems to be the case. The focus in Canada should be on enforcement policies and ensuring consistency across the country, Bradley suggested.
“I think there are some jurisdictions where you still get enforcement officers at the scales writing enforcement policies,” Bradley said. “I think in Canada we would be wise to spend the next year or so developing a Canadian approach to a North American rule.”
Both the CTA and TCA have seen an increasing percentage of their member fleets transitioning to EOBRs or ELDs on their own. Burruss said many truckload fleets took advantage of the downturn to implement on-board recorders and Bradley indicated the CTA policy supporting an EOBR mandate is facing resistance from a surprising source.
“Where I get opposition from CTA seeking an EOBR mandate is from carriers who already have them and see the economic benefits in terms of productivity and reducing the costs of handling paper,” Bradley said. “They’re saying ‘Why give that to everybody else? I’m getting a competitive advantage right now because I’m using EOBRs’.”
A second bridge
Asked about the seeming indifference Michigan lawmakers have shown towards building a government-funded bridge linking Windsor to Detroit, Bradley didn’t pull punches.
“I’ve had the pleasure of spending a lot of time in the (Michigan) state capital trying to talk sense, and what I came up against is the fact I don’t have billions of dollars – that’s the reality of it,” Bradley said. “It’s no wonder to me that Michigan is virtually bankrupt, because its political system is morally bankrupt.”
Burruss agreed the government-funded bridge was a “political casualty,” but Bradley still holds some hope that Michigan politicians will eventually get on-board.
“I have to believe that eventually if you are right and the facts are on your side, that you will prevail,” he said. “And I believe even in Michigan, the politicians will eventually do the right thing. I do believe it will happen eventually because it has to happen, you can’t rely on 19th century infrastructure to support our economy in the 21st and 22nd centuries.”
Bradley said Ontario’s LCV program to date has been “a spectacular success” and he suggested it’s now time to “open up the program.”
Allowing the more widespread use of LCVs (two 53-ft. trailers pulled by a single tractor) will make Ontario a more attractive destination for manufacturers, he added.
Meanwhile, south of the border the TCA recently revised its position on sizes and weights to mirror that of the American Trucking Associations. Traditionally, TCA has opposed increasing truck weights, because the last time US weights were boosted to 80,000 lbs, rates did not keep pace, Burruss noted.
However, the TCA now sides with the ATA in its belief that the industry must do more with what it has rather than adding more trucks to existing highways. With that in mind, TCA and ATA developed a joint policy supporting 88,000 lbs on five-axle combinations and 97,000 lbs on six-axle configurations. Despite the solidarity from industry, Burruss said it’ll be three to five years before US lawmakers approve any productivity increases.
A look to the future
Both Bradley and Burruss predicted the trucking industry will look a lot different a decade from now. Burruss said the truckload sector will see “a lot of fundamental changes,” which will in some ways mirror the LTL industry with more slip-seating and regional distribution to ensure drivers spend more time at home.
“I think the (truckload) industry looks a lot different in the next 10 years,” Burruss said.
Bradley, for his part, said a shortage of qualified drivers is going to force the industry to change some of its habits and focus on improving driver compensation and lifestyle issues.
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