MISSISSAUGA, Ont. – Carriers are seeing a reduction in freight volumes, but are still experiencing a good year.
That was a theme that emerged from discussions at the Surface Transportation Summit Oct. 16. Norm Sneyd, vice-president of business development with Bison Transport said there is definitely excess capacity in the market. The company’s first quarter was on par with an exceptional 2018 but conditions have softened somewhat since, he said.
“We are going to finish up with an okay year, but it’s not going to be a 2018. That’s for sure,” he said.
Sneyd was reluctant to give a prediction for 2020, but he said “I’m hearing things are starting to get better for a lot of our customers.”
Joe Lombardo, senior director of transportation with Purolator, echoed that sentiment.
“We saw a pullback earlier this year,” he said. “I think that’s a snap back to normalization.”
Getting quality drivers remains a challenge for trucking companies, particularly when they have to compete against companies employing the Driver Inc. business model. Carriers using Driver Inc. improperly categorize employees as independent owner-operators to sidestep source deductions. It’s having an impact on legitimate carriers, said Sneyd.
“We tracked it – 35% of every new driver that walked through that front door walked out the door when they found out we wouldn’t pay them as an independent owner-operator,” he said.
Stephen Laskowski, president of the Canadian Trucking Alliance (CTA) said Driver Inc. fleets are “bastardizing” the industry and he called for better enforcement from Canada Revenue Agency. In Ontario, the Workplace Safety & Insurance Board has begun fining carriers using Driver Inc.
Asked about the impact the Canadian electronic logging device (ELD) mandate will have on capacity, Sneyd said he does expect there to be an effect.
“It’s definitely going to have an impact,” he said. “It had an impact in the U.S. last year, we saw that.”
He said many Canadian fleets stopped serving the U.S. to avoid the ELD mandate that went into effect last December. Soon, they’ll be forced to comply with Canada’s own mandate to run domestically, or park their trucks.
“We have run them for six years now, both north and south, and in our opinion it’s the only way to run a fleet efficiently,” said Sneyd. “What it does is puts the onus on a lot of customers and shippers, because now that driver doesn’t want to be hung up delivering or loading at a facility. They get paid to drive, they want to drive, that’s their passion. The minute they get hung up for two to three hours there’s going to be pushback from drivers. Companies that are not running ELDs today are either going to comply or they’re going out of business.”
That’s a concern for shipper Sylvie Messier, corporate transportation and customs manage with Ipex.
“More for our local, smaller guys, I’m afraid we will have a shock similar to what was seen in the U.S. in 2018,” she said, adding she’s afraid some small fleets won’t have the capital set aside to make the transition to ELDs.
Purolator is in the process of rolling out ELDs. Lombardo doesn’t see it being an issue, as the company’s drivers are never put in a position where they’d need to breach hours-of-service rules.
When it comes to pricing, Sneyd said it’s essential carriers know their costs. At Bison, an analytics group measures the cost of servicing every account, every lane. Price increases are a fact of life, but Messier prefers when carriers find ways to reduce costs.
“I want to know what is causing the reason, why they want to increase our rate,” she said. “It’s really important to us to know where is our cost?”
She leans on carriers to inform her about which distribution centers and docks are causing delays, and why. That way she can build the case for upper management to increase investment in those facilities to expedite loading and unloading.
Sneyd said it’s important to remember carriers and shippers are working toward a common goal: to get freight delivered safely and efficiently.
“I think that if both parties work towards that common goal, that to me is a good relationship,” he said.