Howdy, folks. With the exception of a fellow named Bob many of you seemed to enjoy my Ray’s Rules column from a few months ago, so I thought I would run with the idea and set some ground rules for a few specific sectors of the industry. In the near future you might see Ray’s Rules for company owners, company drivers, safety managers, recruiters, dispatchers or whatever seems like a good idea at the time. Oh…and just to keep Bob happy…load brokers. I would also be more than willing to take suggestions from you folks, so send them in and let’s put some order to some of these roles and once again, straighten this thing out!

Before I go on I should clarify that these rules are my satirical view of what I see as being obvious oversights on the parts of some folks. I attempt to throw in some humor in order to get some of you to get off the pot and start acting like you’re in the game and not only survive, but to do the best you can. I also need to point out that the vast majority of, in this case, Owner Operators, run under their own set of rules and do not need any advice from me. That being said, there are always those groups that just don’t get it and I guess that Ray’s Rules is really for those folks; so if you are one of them, please pay attention. We need you to wake up and be part of the team!

Rule Number 1: Expired fuel tax decals are not to be treated in the same manner as old luggage that you never throw out. Take them off your truck. If I was a scale master, I would think to myself, “Wow this guy can’t even be bothered to remove an IFTA decal from 2005…I wonder what the rest of this fool’s paperwork looks like?” Get that crap off there; it might take an extra 10-15 minutes but get a rag with some cleaner and take the old decal goo off and put the new one on straight. Do it and do it right now!

Rule Number 2: Speaking of straight…at least once or twice a week I see an owner operator who has put the logo of the company who they are for crooked on the side of the truck. What is up with that? Are you folk’s blind? A crooked logo on the side of a truck looks like hell. If you are so challenged in this regard, get that crooked thing replaced and have it put on by someone who knows what they are doing. It won’t cost much; you just tell them where you want it and stay away from the project. Get with the program here!

Rule Number 3: I understand that keeping a truck clean is not always easy, but occasionally I see a truck going down the road that hasn’t been washed in months. If this doesn’t bother whoever owns this piece of equipment then I am not sure what else to say, except that I bet this is the same person that you can smell before they ever enter the room. As of today you must leave our little fraternity; it’s not that we don't like you; it’s just that our senses can no longer tolerate your lack of cleanliness or personal hygiene!

Rule Number 4 (You have heard this rule from me many times before, but for me it has to be on this list): The whiners must go! I’m not talking about the complaints that come from someone with a legitimate beef and attempts to do something about it. I’m talking about the person who lives by the code of “the squeaky wheel gets the grease” and they never stop complaining. You guys make my ears hurt! You too must leave our club and, in addition are also banned from ever owning another CB radio!

Rule Number 5: Using your next and last pay statements as your sole measure as to whether you are getting ahead or not must stop. You bought a truck as a tool to start a small business. Being successful as a small business includes but is not limited to planning, strategizing, budgeting, and cash flow management. If you don't know what I am talking about here ask around and find a business service provider who can help you and get on with it. If you’re an Owner Operator and not doing this, this is the most important rule in this article for you. As Nike would say… Just Do It!

Rule Number 6: You must know your cost as an Owner Operator and you must work at reducing this cost at all times. In my previous life, one of the ways I would gauge the business savvy of an owner operator, was during a conversation I would ask what the individual’s cost of fuel was. Unfortunately many folks couldn’t answer me, they would try though. I would get answers like 6 MPG or 7.1 MPG which was, of course, an answer to a question I did not ask. If the owner operator gave me an answer that was out to 3 digits or 35.7 cents per mile after fuel surcharge, then I knew I was talking to someone who was watching their business.

Rule Number 7 (copied from my favorite author Larry Winget, check him out at www.larrywinget.com):. “Do what you said you would do, when you said you would do it, the way you said you would do it.” Larry nails it in his #1 rule for life and business, and this should be included on every list. Unless you follow this rule in your own day-to-day life, how can you expect anyone else to come through for you the way you expect them to?

This could go on for pages but I’m running out of space. Please feel free to drop me a note on what should be added to the list or comment on the current content.
Safe Trucking!
Ray J Haight

Permalink | Comments (11)

Although the immensity of the BP oil gusher in the Gulf of Mexico isn't understood yet, and despite recent editorials proclaiming Canada's tar sands as an attractive alternative to deep sea drilling, this is a profound environmental incident that is sure to change public perception around this resource.

No reason for me to mention that the world is almost-entirely reliant on crude, but what surprised me is how recent this addiction is. Re-reading Herman Melville's great classic Moby Dick, I was struck by the realization that whales were a major source of industrial oil prior to about 1870. Whaling was about oil!

The amazing thing is that the book was based on real incidents of whales that rammed whaling ships. Moby Dick was no imaginary behemoth. According to Wikipedia, Melville read about the incident of an albino sperm whale ramming the Nantucket ship the Essex in 1820, and sending it to the bottom with only eight survivors.

And then there was the real “Mocha Dick”, who had over 100 encounters with whaling ships in the Southern Atlantic between 1810 and 1830, usually coming out the winner. He had dozens of harpoons in his body but continued attacking whaling ships with incredible ferocity. And there were other whales with a vendetta, the most recent account being an attack on the Kathleen in 1910.

Well sir and mesdames, the Gulf oil gusher may be our Moby Dick. The worm has turned and the destruction is immense. And for all of us who rely on “dirty oil” for our livelihoods, it might be a good idea to have a look at the monster that is following us.

The oil craze in North America began in 1858 in Oil Springs, near Sarna, Ont., when James Williams dug a well behind his asphalt plant and struck oil instead of water at 20 metres (it's still operating to this day, producing a small amount of light crude daily). The first commercial operation in the US began in 1861 in Titusville, Penn., and J. D. Rockefeller founded a refinery in Cleveland that became the precursor to Standard Oil in 1865.

It's a wicked world and the accelerated craving for crude has sparked wars and destruction, death and depravity, on a macro-cosmic international scale. If you believe the report on 60 minutes a couple of weeks ago, BP was outrageously negligent in their exploitation of the drilling procedure, and sacrificed due diligence for increased profits and public safety. The Exxon Valdez was only small potatoes compared to the unabated gushing a mile under the Gulf that BP doesn't know how to stop, and neither does the US government nor the hundreds of species (including homo sapiens) that depend, or rather rely on the ecologically symbiosis of the Gulf wetlands as a source of life itself.

And with Big Oil taking a drubbing, Big Trucking can't be far behind. Outside of finding a new cheap and enviro-friendly fuel, we're obsolete and don't realize it...I know it's heresy to say this, but running trucks up and down the road doesn't make sense economically or environmentally. inter-city trucking should be done by rail except for a small percentage of perishables, and that should be prohibitively expensive unless deemed a necessity.

You can put all the LCVs on the road you want and it won't make much of a dent. Freight on the 401 corridor should be moving by rail and I suppose we're lucky that the rail infrastructure is so backwards and arrogant that we can keep our jobs for now. The two Canadian railways have an untouchable monopoly and they just don't care about service to customers or the common good.

And where are the new technologies and alternatives to internal combustion? Years down the road if that. Hydrogen fuel cells haven't panned out, electric trucks are still in their nascence, and other alternative fueled vehicles are just a pipe dream at present.

Not that the fickle public is going to help any. A recent survey indicated at 75% of Canadians “care” about the environment, but only 1 in 100 are willing to give up their cars to make a difference. The public is “concerned” about the latest glitch in the crude oil supply chain but nothing seems to be changing (except for the dinosaurs that claim global warming is an anomaly and we should keep on polluting all the way home, or as prime minister Harper aptly told us, global warming is a “socialist” plot).

So keep on trucking brothers and sisters but don't look back. The big white whale is gaining on us!

Permalink | Comments (5)

What should responsible fleet Owners and Safety Managers be doing to Prepare?? Here is a short list of things to do.
1) Ensure all drivers are aware of the proper use of sunglasses, and eyewear.
2) Ensure all trucks are filled with Bug Repellant windshield washer fluid
3) Train all drivers to slow down and be cognizant of the time of year. More children playing on the roads etc.
4) More drivers on the road, more distractions, more accidents.
5) Insurance company statistics will prove time and again more accidents occur in summer months than winter months.
6) Try to advise all drivers of any significant road clsoures that may affect travel times.
7) ALWAYS ENSURE YOUR DRIVERS DO A THROUGH AND COMPLETE PRE TRIP INSPECTION OF THEIR EQUIPMENT!
8) Train the drivers to leave earlier instead of leaving just on time, no allowance for delays, and having to speed.
9) The U.S. and Canadian authorities are watching very closely, every truck as we are more visible than cars.
9) Ensure whenever and wherever drivers stop for rest, they are well lit areas, well maintained areas, and never on their own.

10) Ensure the drivers always leave with a FULL TANK OF GAS (In the truck) and if hauling a reefer trailer that the fuel is full for the reefer unit as well.
11) Ensure we monitor all Fuel consumption of all units. try to modify driving habits whether ggod or bad. At least the drivers will be aware we are looking at the results.
12) Be a lot faster to reward than reprimand. YOU always get a lot more accomplished with SUGAR AND HONEY THAN YOU DO WITH THE OPPOSITE>
13) Ensure all trailer doors are adequately sealed, and if possible the drivers should always inspect the doors every time they stop. Especially teams when changing drivers.
14) Always ensure the satellite is system is working on every unit

SAFE MOTORING FOR THE SUMMER, THOSE OF YOU TAKING A VACATION ENJOY, AND THOSE OF US THAT CONTINUE TO MEET, DISCUSS, PLAN, RECOMMEND, IMPLEMENT CHANGE, MONITOR, AND ASSIST EVERY AND ANY DRIVER IN ANY WAY POSSIBLE, Thanks from that one motorist you just saved.

Permalink | Comments (5)

Is your head spinning yet from all the economic volatility and second guessing about what it all means about our industry’s future? After spending the last few days immersing myself in the economic turmoil taking place in Europe and what it could mean for our fragile recovery, I travelled to Ottawa to listen to the economic predictions from the menagerie of economists gathered at the Chartered Institute of Logistics and Transport’s annual Outlook Conference. And I can assure you, my head is spinning. Are we ever going to get a handle on this thing? It seems every second person has a somewhat different take on what is shaping the recovery, if we are even in a real recovery.

Just last month I wrote in this space that it seems we’re stuck in a prolonged in-between phase with the recession technically over but with the recovery nowhere near as robust as would have been hoped. I mentioned that many of the motor carrier executives I spoke to in January and February were telling me they’ve seen little in terms of growth in freight volumes. But then March and April appeared to be much better in terms of freight volumes and the government reported that the Canadian economy created 108,700 jobs in March – more than four times as many as expected and the largest monthly gain on record. Industrial growth is looking good again and the GDP gains of the first quarter were impressive. As Peter Hall, vice president and chief economist for Export Development Canada, told the conference: “this is the stuff of optimism.” Carl Sonnen, president of the respected research group, Informetrica, went as far as to say the near term probability of a “V” shaped recession is moderately high.

Sounds like it’s time to break out the bubbly. You’ve survived the worst economic downturn since 1961 (multiplied by a factor of 7 to be precise, in terms of severity). Ah, but if it only were that simple. The economic forecasters are spinning several qualifiers into their forecasts. It seems there are several risks that could push us back into recession, according to Hall.

There is a risk the unprecedented levels of government stimulus that jump started the North American economy will run out before businesses are ready to tackle the recovery on their own, plunging us back into the economic abyss; the financial markets, perhaps spooked by another Greece, could freeze the availability of credit, choking off business growth in the process; commodity prices are higher than market fundamentals would justify and a sharp correction to their pricing could hurt the economy; the Bank of Canada could get overzealous about controlling inflation and stifle the recovery with higher interest costs; while protectionist sentiments south of the border could start driving trade legislation.

Hate to be the bearer of bad news – would much rather believe the positive first quarter results are an indisputable sign of economy recovery – but it sounds like the next six-month period will be critical in determining if the recovery is real or not.

Permalink | Comments (1)

The potential benefits of intermodal transportation have been recognized for years. However, for many shippers, intermodal transportation has been viewed as a niche service. It is an attractive option for truckloads moving 1000 miles or more that are not service sensitive. For short and medium length of haul movements, where speed to market is a requirement, over the road truckload is the preferred option.

There are several forces at play that are suggesting that intermodal transportation is about to make the leap to prime time. One major impetus for change came from a book published in 2006, written by Rahm Emanuel and Bruce Reed, entitled “The Plan – Big Ideas for America.” Emanuel who is now White House Chief of Staff and Reed who is CEO of the Democratic Leadership Council, wrote then that “railroads are a highly efficient way to move people and goods.” Shifting 25 percent of freight from trucks to rail “would save 15 billion gallons a year” of fuel. It would also reduce commuting time and relieve congestion on America’s highways.

The Obama Administration is championing this recommendation by forming a national freight transportation policy that has as its mission to take more trucks off the road. Deputy Transportation Secretary John Pocari elaborated on this policy at a March 24 Senate Environment and Public Works Committee hearing where he stated that “we want to keep goods movement on water as long as possible and then on rail as long as possible and truck it for the last miles.”

Certainly another factor that is helping the intermodal cause is the current state of America’s economy and more specifically, the potential magnitude of the U.S. debt. Huge budget deficits may limit the funds available for investment in road infrastructure. At the same time, shippers trying to restrain their expenditures on freight transportation should also serve to boost the demand for intermodal service.

The fuel cost spikes in 2008 caused a number of major truckload carriers to re-evaluate their business models and trucking networks. While J.B. Hunt has been the leader in migrating their long haul business to intermodal and shrinking their over the road truckload business to the short haul and dedicated business segments, other leading carriers such as Schneider and Heartland Express have followed Hunt’s lead.

On a going forward basis, fuel prices will need to be closely watched. As of today’s writing, the economic debt problems in Greece and potential problems in other European countries have driven down the price of a barrel of oil to $75. Some folks are questioning if these problems may trigger a worldwide economic retreat. On the other side, one leading Canadian economist, Jeff Rubin, is forecasting the price of oil to rise to $150 a barrel by year end 2010 and $200 a barrel by the end of 2011. We will have to wait and see how the events of the past few days, including the Gulf oil leak, will play out in the future cost of oil. Nevertheless, any future spike in oil costs (and fuel surcharges) could trigger an upsurge in demand for intermodal service.

Another driver for intermodal growth is that an increasing number of carriers see intermodal's length of haul shortening considerably, especially in the Eastern USA, as Norfolk Southern and CSX build the infrastructure needed to haul intermodal freight economically in the 500- to 800-mile range. "In the East we're seeing more intermodal opportunities for what would typically be considered short haul," said Chad Thomas, director of intermodal at J.B. Hunt Transport Services. "There are significant highway conversion opportunities for shippers in that market," Thomas said.

This strategy is now moving beyond the key truckload players. LTL trucking company FedEx Freight, which has pointedly rejected rail transport in the past, could switch and turn to intermodal in coming years if the price is right and customers want the option. The transportation industry is changing rapidly, and carriers must also be ready to change, Bill Logue, president of FedEx Freight, told shippers at the NASSTRAC annual meeting this week in Orlando, Fla. "Customers want options," said Logue, president of FedEx Freight.

The less-than-truckload sister company of FedEx Express has characterized rail transport as inefficient and unwieldy for what it terms “fast-cycle logistics,” delivering freight next-day or second day up to 800 miles. The stance has put FedEx Freight on the opposite side of UPS, which has long been one of the largest customers in the rail industry for the longer linehaul portions of its domestic parcel network. Logue says he isn't ready to drive freight toward intermodal yards. "We find in most cases the railroads still have a transit time issue," he said. "But five years down the road, intermodal may be much more significant. As international globalization continues, the dynamics will change, and there will be an opportunity for more rail," Logue said.

Averitt Express, another large LTL player, is now providing intermodal services as part of its full-load/volume transportation services package. Averitt's Executive Vice President of Sales and Marketing Phil Pierce says Averitt's foray into the intermodal arena is a result of market conditions and customer feedback. "Working with a single provider who can handle multiple facets of your shipping saves you time, money and headaches," said Pierce. Averitt can bundle our intermodal services together with our LTL, truckload, international ocean/air, warehousing, PortSide® and leading-edge transportation management technology to bring shippers the ultimate value for their transportation dollar. Very few providers in the industry can do that. . . Our LTL distribution network and our 1,500 unit over-the-road fleet help us provide customers with operational and pricing flexibility they can't get anywhere else. We can react more quickly than other intermodal providers to sudden shifts — even with shipments already en route.”

This begs the question of what share of the transportation pie can intermodal service expect to garner in the years ahead. The trucker’s view is that highways are the most expeditious way of moving freight in North America and will likely continue to garner 70 percent of North America’s freight movements. Will intermodal be able to build on its base of long haul movements and gain market share in the mid range markets (500 to 800 miles) over time? The combination of rail service improvements, particularly in relatively untapped mid range eastern markets, the shift by national truckload carriers to more regional truckload business models, the potential increase in LTL linehaul traffic, a possible upward movement in fuel costs, government policy initiatives and customer demand for more cost effective transportation should allow intermodal service to make some strong single digit market share gains in the years ahead.

Permalink | Comments (0)

I’m sure a bunch of you clicked on this blog expecting me to ream out trainers of commercial drivers, but alas, that will have to be for another day. Today my ire is directed at those that train our beloved four-wheelers out there.

I was heading home from work earlier this week up the 404 when I spotted a car with a training school sign on top. For purposes of this blog, let’s call it Clueless Driving School. There were four people in the car, as it’s customary these days for driving schools to give group lessons, with each novice taking their turn at the wheel.

While I usually pass these training vehicles carefully and without much thought, this day, I couldn’t. For one, because the car was simply going too fast, weaving in and out of the crowded lanes with reckless abandon. “The trainer had better set this kid straight in a hurry or they’re going to cause an accident,” I thought.

After another minute or so of following the car – with difficulty – I now noticed that the Clueless car was lazily drifting onto the shoulder, about a foot past the rumble strips, every 30 seconds or so. “Geez,” I thought, “the trainer really needs to wake their student up here and help them straighten out.”

After another couple of minutes watching the Clueless car following FAR too closely to the person in front of them (I was taught that a car-length-and-a-half should be the minimum distance between cars and this kid was probably less than half a car-length at best), we both started making are way onto the 407 ramp, which has a posted speed limit of 70 km/hr. Determined to get a look at this kid, I sped up a little. 80 km/hr…90 km/hr…100 km/hr. At 110 km/hr, I gave up once I realized they were actually gradually pulling away from me. What was this trainer thinking? You’ve got a brake yourself on the passenger side, buddy! Give it a tap!

With the ramp behind us, I finally get up beside the Clueless car and what do I see? The trainer himself in the driver’s seat, barking instructions and occasionally taking BOTH hands off the wheel to gesture a point to his three helpless students!

How are those students supposed to learn how to driver properly if the instructor himself can’t set a good example? And exactly what is the criteria to run a driving school these days? I found the whole thing baffling. I certainly wouldn’t want to share the road with three more Clueless fools like the ones that instructor has likely produced.

One of the complaints I often hear from truckers is that the government needs to make a point of better teaching four-wheelers how to handle themselves around big rigs, but if companies like Clueless can’t even help students master the basics, I’m not sure how much hope there is for creating truck-conscious car drivers in the future.

Permalink | Comments (9)

I'm excited to get the opportunity to have a weekend free in Winnipeg Saturday June 5 and Sunday June 6. So many of the Wowtrucks Calendar Winners have come from Winnipeg.

Ryan Danylchuk: EBD Transport
Larry & Jonathan Dyck at Jade Transport
Rik Dhaliwal: Gator Transport
Dennis Curtis: Mark Brandt Trucking

All cool trucks and even cooler guys.

There are so many greats trucks coming out of that city. I'm looking to use this opportunity to start telling the stories of some of the Winnipeg/Area based drivers on my website: www.wowtrucks.com. I want to showcase some great trucks using some of Winnipeg's cool backdrops/buildings/landscapes etc along with getting the driver story.

Here's the scoop: If you've always wanted some great images of your truck and are free that weekend, drop me line at david@wowtrucks.com

Because I''m pumped about getting more "on location" great shots of great trucks and their drivers and sharing them on Wowtrucks.com, I will not charge for my shooting time. I'd book you for an hour at a mutually chosen location, shoot some cool photos and get your transport story. If you want prints or whatever afterwards you can purchase them at a reasonable cost. You will have awesome photos for your walls, websites etc...whatever you want to use them for.

First come first served. Drop me a line if you are interested: david@wowtrucks.com and I'll get in touch with you.
I'm looking forward to meeting you!

David

Wowtrucks
Canada's Big Rig Calendar
www.wowtrucks.com

Permalink | Comments (0)

Motor carriers were squeezed by the recession like never before. With a tentative recovery in hand, how will they start to grow again in 2010? In this second part of my interview with Mark Seymour, head of the Kriska Transportation and a former chairman of the Ontario Trucking Association, we take a look at the hard road ahead.

MT: A large part of the reason why there was such downward pressure on rates is because available capacity was considerably larger than the demand for transportation during the recession. There were a lot of new entrants in the years before the recession that contributed to this excess capacity. Will there be enough barriers to entry during the recovery to keep capacity from growing out of control once again?

Seymour: I hope there will be enough barriers to entry for new players and barriers to growth for existing players. Typically, what would keep you from getting in or bigger is banks, finance and insurance companies. I think those institutions will have to repair some of the damage they’ve inflicted upon themselves and for anybody trying to get in now, that may prove to be much more difficult. But we also can’t discount the growth we saw from established players. There was just a lot of growth in the industry.

MT: Despite the difficulties of the past year, Kriska did manage to grow. Tell me about your acquisition of Clark Transport. What does it add to Kriska’s capabilities and why was it a good fit?

Seymour: Clark Transport was an eastern Ontario based company and their business was primarily in the temperature controlled market and it was a good fit for what we do from a customer perspective and a network perspective. It added quality people and quality customers and that’s what we look for with our acquisition strategy.

MT: About a year ago you also purchased TL carrier BMD Transportation. Why did that purchase make sense for Kriska and how has that purchase worked out?

Seymour: It has worked out very well. It’s the same principle, with an eastern Ontario based company with good people and customers and strong relationships. It added more scale to our company and was very complimentary to what we already did. Both BMD and Clark were merged immediately with Kriska because they fit so well; there wasn’t duplication in terms of terminals and customers and equipment. Anything that we do these days is with scale in mind. If you are doing something, it’s always in your best interest to do more of it and get more scale. It helps diversify our business as well.

MT: Why does there seem to be a preference to pick up fleets of this size rather than pursue much larger acquisitions?

Seymour: In my opinion, nobody can afford to make a mistake right now. The bigger the nut, the bigger the risk. Mergers or standalone share purchases can be very distracting. They can also be very disruptive to customers and employees, so you have to be very careful. So I think the smaller the acquisition, the less dramatic and risky it can be. But at the same time there can be benefits. To go into the market today and try to grab $3 million or $5 million of new revenue is very difficult. An acquisition, if you do it right and convince the customers you are going to do it right, brings you that. We believe we have to continue to look for such opportunities that are of low risk. If you don’t grow you are going to shrink.

Permalink | Comments (0)

I’ve always felt that being connected to the trucking industry makes my daily commute a lot more tolerable. I’ve got plenty of eye candy to help pass the miles. My wife always catches me craning my neck at the passing rigs and she shakes her head while I wonder what it must be like to have no appreciation whatsoever for the nice iron we see on a daily basis. Unfortunately, she’s the norm and I’m the exception in the grand scheme of things.

Anyhow, I figured it was time to write a blog acknowledging some of the more pristine fleets that run our highways. I’ll start the discussion with three fleets that never fail to turn my head. But first, the criteria I used in my (highly unscientific) selection process:

* Equipment type: Must run well-maintained, late model equipment.
* Logo/Paint/Decals: Must have recognizable paint scheme and nice use of colours.
* Operator Pride: This is the most important one to me. The equipment must scream pride of ownership. Credit goes not only to the fleet or owner/operator, but the driver who keeps it looking that way when it leaves the yard.

Before anyone takes this too seriously, this is intended only as a fun discussion, not a serious competition. I don’t want to offend anyone I left out. And of course, I welcome other suggestions as well. Let’s keep a running list. One last point, I’m judging these trucks on how they look on the highway and at the truck stops – not the truck shows where they’ve been polished up for hours. Without further ado, here are the fleets I am continually impressed by, in no particular order:

Sleeman Breweries: I always get a little thirsty when I see a Sleeman truck. The trucks and trailers are colourful, easily-recognizable and well-maintained. This fleet looks like it turns its trucks over every year - the equipment’s always clean and shiny. I also like how the trucks are a variety of different colours while maintaining the same distinct branding. The Sleeman fleet is among the sharpest looking fleets on the highway.

Samuel: This company is in the metal business, but it is equally attentive to the iron it runs down the road. You can tell it’s a Samuel truck at first glance. And as much attention has gone into the tarps as the tractors themselves.

L. Ritchie Cartage: The black Western Stars with the red lettering are distinctive, yet subtle. No fancy graphic logo, just the name of the company in bold lettering. The trailers are equally distinctive. These trucks and trailers scream operator pride.

An honourable mention to Kurtz Trucking. Want to challenge me on my selections or add to them? Let’s hear it!

Permalink | Comments (14)

Attending Scotia Capital’s transportation and logistics night this week I picked up on a valuable piece of insight I think all motor carrier executives, and the shippers who deal with them, will want to consider.

The night featured a Jays game watched from Scotia Capital’s private box at Rogers Centre overseeing first base but in reality it was a great excuse to bring together a menagerie of transportation industry leaders for a few hours. Scotia Capital proved to be a most attentive host keeping us all well fed with plenty of good stuff to quench our thirst too.

The guests I had a chance to chat with included motor carrier execs such as Dan Einwechter of Challenger, Doug Harrison of Calyx, Nasser Syed of Apple Express and Brent Jones of Wilson Transportation as well as Pat Loduca of Upper Lakes Group and John Kim, the new CFO of Cargojet.

Talk naturally turned to the state of the Canadian transportation industry and I must admit I watched but a few minutes of the game the conversation being as interesting as it was. But it was Elian Terner, director of investment banking at Scotia Capital, who I thought provided the most thought provoking insight.

For a couple of years now motor carrier executives have been hoping the excess capacity in their industry would be removed when the financial institutions finally decided to shut down the many trucking companies basically operating from week to week - the “zombie truckers” as they’ve come to be called. The line of reasoning was that soon as the recession was over and the equipment owned by these carriers hanging on by their fingernails was worth something again, we would see the banks getting a lot more aggressive in calling their loans. In other words the banks would play a major role in consolidating the industry.

This view had a great number of adherents and I must admit to being one of them. But there are two problems with it:

First is the sheer scale of the capacity that needs fixing. The number of small carriers in Canada increased by about 25% during the pre-recession years; there are about 2,000 small carriers that would need to shut their doors before we could return to the capacity levels Canada experienced at the start of this millennium. And that’s not counting all the capacity added on by medium sized and large carriers. They did not grow much in number but they did increase the size of their fleets.

The second problem with this line of reasoning is quite simple. If this is what’s going to happen, why hasn’t it started happening yet? The recession is over, we are several months into a fragile recovery and certain sectors are already showing strong growth.

Scotia Capital’s Terner believes we haven’t seen the banks play a major role in consolidating the industry because they don’t want to. They’re not in the business of trying to sell off equipment and terminals; if these companies can squeeze by, they just may very well let them.

As Terner emphasized, if motor carriers feel the need to consolidate their industry to cure the excess capacity woes that have placed such downward pressure on pricing the last two years, they’re going to have to take care of it themselves.

Permalink | Comments (4)