Transportation inflation will be driven by the talent shortage, Harrison tells CITT

by Canadian Shipper

HALIFAX, NS – The greatest driver of inflation in transportation pricing will not be rising equipment costs but the need for talent, according to Doug Harrison, COO of Day and Ross Transportation Group.

The need to find talent will also prove to be one of the greatest limiters to growth for Canada’s transportation industry, Harrison told a packed room of shippers and carriers attending the Multi-Modal C-Suite Panel at CITT’s Reposition 2012 conference this week.

Not only is talent hard to find, it’s also hard to retain, at least in the trucking industry. Harrison pointed out that driver turnover among some of the larger Truckload fleets in the US tops 100%. He questioned how fleets besieged by such high turnover can train their drivers and engage them in providing superior customer service.

The graying of the current transportation workforce will also add to the shortage.

The talent shortage was the first of three key issues which Harrison felt would impact commercial trucking. What the industry has to do to ensure its capacity is in line with the new normal of a slowly growing economy was another issue Harrison considered. Carriers have to consider how much capacity they can remove and still provide quality service, he said.

Certain to have an impact on trucking capacity levels and the need for drivers are changing shipper attitudes towards using intermodal services. Traditionally it was commonly accepted that the economics of rail surpassed the economics of trucking services at around the 750-mile mark. During the discussion of the C-Suite Panel, however, Harrison said that may have shifted down to 500 miles, with many motor carriers themselves using rail services. And, in some cases, rail service could be viable at as low as a 350-mile distance as a way to avoid congested corridors such as Toronto to Montreal.

The need to make heavy investments in technology is another key issue shaping transportation, according to Harrison.

“Companies are looking to be a lot more responsive at the last minute. This creates pressure on suppliers to be very agile,” Harrison explained and that agility requires the visibility into supply chain operations that allows fast and intelligent decision making. Technology is necessary for reaching that state.

Harrison was joined on the blue-chip panel by Jeff Cullen, CEO Bellville Rodair;  Neil McKenna, vice president, transportation, Canadian Tire; Rudy Mack, founder Rudy Mack Associates; Jean Jacques Ruest, executive vice president & chief marketing officer, CN Rail, and  Lise Marie Turpin, vice president, Air Canada Cargo.

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