Printer Friendly

Competition heightens the need to improve efficiency.

The recession, cross-border competition and deregulation have all had a serious impact on the trucking industry.

The problems facing the industry extend far beyond increasing diesel fuel rates. A federal report which examined the competitiveness of the trucking industry, as well as a report prepared by the management consulting firm of Deloitte and Touche for the provincial Ministry of Transportation, found that the industry must become more efficient.

Both reports stress the need for the industry to modernize equipment in order to reduce its maintenance costs.

The federal report noted that Canadian truckers are at a cost-disadvantage with their U.S. competitors when it comes to maintenance and repair costs. In addition, it found that depreciation rates and capital-cost allowances were much better in the U.S.

The Ontario report recommended that the industry streamline management, train drivers better, group together when buying equipment to take advantage of bulk discounts and provide up-to-date information so it can respond quickly to emerging market trends.

Both the president of the Ontario Truckers Association, Dave Bradley, and the president of the Canadian Truckers Association, Glen Beaton, agree that there is a role for both industry and government during this transition period.

The federal government has amended the Income Tax Act to improve depreciation rates and capital cost allowances for carriers. According to the Canadian Truckers Association, the federal government has also provided funding for two owner/operator co-operatives whose mandates are to facilitate market access and to educate truckers on efficiency measures.

Provincial governments are examining ways of eliminating many of the existing interprovincial trade barriers. For example, an agreement, through a memorandum of understanding, is under way to harmonize weight and length regulations across the country.

In addition, the Canadian and U.S. governments are working on harmonizing industry regulations. In 1988 a commercial driver's licence agreement was signed which validates Canadian truckers licences in any state and vice versa.

The industry itself has had to become more knowledgeable about its trade. Deregulation and the recession have both contributed to the keen competition that now exists within the industry.

For carriers such Cabano Kingsway Transport, a Sudbury-based freight carrier, the ease of entry into the trucking market and the economic downturn have had a definite effect on business.

Terminal manager Don Campbell says that the ease of entry provided by deregulation has resulted in an oversupply of truckers and a shortage of freight.

"We have the same amount of freight being moved, but have more truckers competing for the shipments," says Campbell. As a result of this increased competition, Campbell notes that freight rates were better 10 years ago.

Profit margins have also deteriorated.

"It's a tough struggle for truckers," says Bradley. He notes that profit margins are slim to flat for most carriers and owner/operators.

Truckers today must not only be aware of their profit margin levels, but also be concerned about the quality of service being provided. Computerization is becoming a must in the industry.

Truckers are a diverse lot. There are long-distance freight haulers and local haulers, and each group has its own set of problems.

For carriers that haul across provincial and national borders, transborder competition is of key concern.

However, for local haulers, such as the Greater Northern Ontario Truckers' Association (GNOT) located in Sudbury, transborder competition is not an issue.

Rather, the use of out-of-town load-brokers and truckers poses the greatest problem.

According to GNOT president, Rob Lacelle, load-brokers who act as an intermediary between shippers and truckers are taking business away from local truckers. He says that southern Ontario load-brokers are being hired by local shippers to bring in truckers to haul local freight, especially case sand and gravel.
COPYRIGHT 1992 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Report on Transportation & Travel; state of trucking industry in Ontario
Author:Campbell, Joan
Publication:Northern Ontario Business
Article Type:Industry Overview
Date:Dec 1, 1992
Previous Article:Transportation policy report due by Jan. 31.
Next Article:Mountain of used tires a recycling challenge.

Related Articles
Blockades caused loss for Pro-North, Lakehead Freightways spared set-backs.
Over-capacity blamed for industry's woes.
Computers, added services help movers stay in business.
Talk is free.
Surcharges offset rising fuel costs.
New security brings MTMC, carriers closer.
Roadwork to begin 2004.
3 Driven by incentives.
4 Grant's: setting wheels in motion.
5 Ricci's going the distance.

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters