Increasing costs of fuel, insurance, border security and equipment, combined with new hours of service regulations, a shortage of drivers, and a lack of risk capital are combining to increase the barriers to entry and fleet expansion in the trucking industry.
And, this concoction industry observers say is causing a cultural change in the industry where carriers are more selective in the customers they will haul for and more confident in charging for the service they provide either through accessorial charges, or increased rates, or a combination of both.
This was the message delivered today by the CEO of the Canadian Trucking Alliance and president of the Ontario Trucking Association, David Bradley, and vice president, Barrie Montague, in a presentation to the Supply Chain & Logistics Canada National Conference in Toronto.
According to Bradley, "it is still early days, but the mood in the market seems more accepting of rate increases and accessorial charges where the shippers are provided with credible information on delays, cost increases, etc. There also seems to be some increased willingness on the part of shippers and carriers to work together to minimize delays and other inefficiencies in the distribution process."
"The new U.S. hours of service regulations, which limit the productivity of truck drivers, have served to sharpen carrier and driver focus on making every hour count. There is little tolerance for delays. The drivers have to be paid and carriers can’t afford to have equipment hung up at loading docks or in long line-ups at the border," says Bradley.
"Transportation has become a commodity," says Barrie Montague, "but even a commodity reaches a point where its price can no longer be knocked down. We appear to have finally reached that point when it comes to trucking services."
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