Better days ahead for trucking in 2004, but many issues still plague industry, says trucking chief

by Canadian Shipper

David Bradley, president of the Ontario Trucking Association and CEO of the Canadian Trucking Alliance summed up his forecast for next year by saying 2004 has got to be better than 2003.

Bradley addressed trucking leaders from across Canada who are gathering this week at the 77th annual Ontario Trucking Association convention.

“Perhaps no industry is as reflective of the overall economy, than trucking. And 2003 was a tough, tough year for most carriers. The list of factors that visited hardship upon the industry over the last year seems endless – the War in Iraq helped push of the price of diesel fuel to record levels, insurance premiums continued to sky-rocket, the Canadian dollar appreciated by 20% almost overnight, and the costs of all the new security initiatives began to hit home. On top of that we had the SARS crisis, the mad cow scare, followed by the big blackout. It’s rough enough in normal times in the trucking industry, but having all these things occur in the same year is extraordinary,” said Bradley.

However, Bradley says that he sees better times ahead for the carriers that made it through 2003.

“There is no doubt that the US economy is picking up steam – all the signals point in that direction – and that will boost Canadian economic prospects too.”

The degree to which the Canadian economy rebounds, he says, will also depend on what happens with the dollar — and whether Paul Martin’s federal government can revitalize Canadian relations with the US and whether the new Liberal government in Ontario will support the 9-point action plan for infrastructure investment at the Windsor border crossing agreed to by the previous administration and practice fiscal responsibility to avoid a return to tax and fee increases.

Nevertheless, Bradley said the pick-up in economic growth “will further tighten capacity in the trucking industry, creating even better conditions for a meaningful and sustainable correction in freight rates.”

“With the kind of cost escalations the industry has had to endure over the past couple of years, carriers have become more selective already. Once the economy picks up, those shippers that work with their carriers to improve efficiency and productivity — and are prepared to pay a fair rate — will get the service.” However, he said the timing and the breadth of rate adjustments will depend on the degree of market discipline the carriers adopt. “The conditions are ripe (for rate increases),’ he says, “But it’s up to the carriers to make it happen.”

According to Bradley, “2004 will also be a critical year on the regulatory agenda,” citing the introduction of new US hours of service rules on January 4th, 2004, the ongoing battle over whether Canada will adopt a sleeper berth exception as part of its own hours of service reforms, as major concerns. In addition, he says that “in the coming year we’ll see what the final form – and the costs – of a number of key US security proposals, such as electronic pre-notification of general freight and the driver license protocols for hazardous materials.”

“Facilitating efficient cross-border trade in the face of the US’s unrelenting and singular focus on security continues in my view to be the greatest economic challenge Canada faces. As a nation we cannot become complacent about these issues or we run a very real risk of losing direct investment which we so desperately need to continue generating growth and jobs,” he said.

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