Gas prices high enough for ya?
Talk to people in the trucking industry, and many will say that Canadian consumers, particularly those in Ontario, have seen only the tip of the iceberg. The day might be fast arriving where three bags of milk cost $8 instead of $5, and a loaf of bread costs $5 simply because it is so expensive to get it from the bakery to the store.
Welcome to the world of trucking. The Wellington Advertiser contacted a small sample of truckers to obtain a sense of what is happening in the industry as the Fergus Truck Show approaches.
Many of those who responded warn that there are a host of problems that could raise the cost of goods. The motto of the Truck Show is, If you’ve got it – a truck brought it.”
True, but that truck runs on fuel.
Mike Smith, of TD Transport in Mount Forest, said in an interview, “It’s a crippler for transporters and for shippers. Nobody can afford these costs.”
Jim Fleming, of Fleming Fast Freight, in Fergus warned that consumers had better get their wallets ready.
“You and I pay for everything – and we always have – on the product in the store,” he said.
He said of consumers, “They’re getting a double whammy. They’re paying for their fuel, and ours” because truckers will pass along the costs.
Fleming also noted that some larger truck companies are buying their own fuel and have a huge advantage of smaller private firms and individual haulers. He said they can buy in so much bulk that despite prices over $1.30 per litre for fuel at the pumps today, they are paying between 42 and 70 cents for the same fuel.
He said that is possible when buying a million gallons a year, and he said he would be interested in finding a group of truckers or companies to form their own consortium to buy that gas and create a more level playing field.
For Andy Vandermarel, of Vandermarel Trucking, in Fergus, the fuel costs are devastating, but the business costs are even more so.
“Everything is hurting right now,” he said.
He noted that one major problem is companies having to carry the higher fuel costs on their books while they await payment.
“We don’t get paid until six or eight weeks” he said of his haulage fees. Meanwhile, his trucks still need fuel, and it is much more expensive than it was last summer.
Vandermarel said for an operation his size it is the difference of carrying $120,000 for two months, or carrying $600,000 of debt for fuel.
He noted that he has never heard of any consortium to buy fuel, and, “I’ve researched every angle,” he said.
Vandermarel Trucking uses fuel depots that many trucking firms use to fill trucks.
The result, he predicted, is “Food prices, clothing, everything will go up. It’s unavoidable.”
Wayne Jackson, of Silver Creek Transport, in Palmerston, said there are 1,200 independent brokers going out of business every week in the trucking industry. “We’re losing trucks.”
He said a lot of companies have fuel cards for the fuel depots, and those cards had limits of $1,000. Now a fill-up costs $1,400.
Jackson said the provincial government just recently made life worse for the industry, too. It has insisted that all haulers have governors on them, limiting their speed to 105km/hour.
He said that might make sense for trucks that never leave the province, but when they do, it makes them unsafe. He explained that where there are higher speed limits in the United States, a truck that cannot travel to meet that limit is most likely going to be blamed for any accidents where the truck is hit by faster drivers.
“They can’t seem to understand that, the people who make the rules,” he said.
He cited Texas, where the I-10 has a speed limit of 80 miles per hour, where Ontario trucks with the governor on them can travel only at 64.5mph.
Jackson said the Ontario lawmakers think such rules will keep American trucks out of the province, but, he said, “They’ll just ban our trucks.”
Drivers wanted?
Some in the industry complain of a driver shortage, and others say it has ended.
Vandermarel said, “There was a driver shortage.”
He believes it ended when the economy dropped.
“The economy is way down; a lot of companies have gone out of business. There’s no shortage at the present time.”
But Fleming said he foresees fewer people coming out of school and entering the world of truck driving.
He said the government regulations not only make it difficult for such a career, but are actually discouraging potential drivers.
He explained that a single log book violation can mean a fine that costs a week’s pay.
“Why would he come into our profession?” he wondered.
He added, too, that a few speeding tickets and a trucker can lose his job. “You’re always in the limelight. You’re going downhill a few over the speed limit … you lose your job. They’re just pounding our industry.
Fleming finds it particularly difficult to take, remembering media campaigns of the past. He cited trucks losing tires a few years ago as a major safety issue, but noted that nobody ever explained that many of those were caused by lugs from China and Mexico, not up to Canadian standards, that caused a large number of those tire incidents. He said it was the government not doing its job of inspection.
“That’s why we’re going to have a driver shortage,” he said. “Give it five years, and it will be worse.”
Jackson agreed. “There are more and more guys getting out because of the restrictions,” he said.
Smith, whose company hauls liquids, said he has not found a shortage of drivers, but noted they have to be “paid properly and trained properly.”
Future of trucking
Smith said his company is lucky because it has a special niche in the industry.
But, he said, with the low U.S. dollar and all the regulations, he sees Canadian truckers slowly losing their business.
Vandermarel admitted “The future looks pretty bleak,” and predicted 20% of the industry will be gone by mid winter. He said it is simple economics.
He noted big factories are laying off thousands of people, and those who are working are spending more money to commute to work. He said when that money goes into fuel instead of the consumer economy, everyone is going to be affected. He estimated climbing fuel costs could take up to $1-trillion out of the economy.
“I don’t think most people have thought that out, yet.”
Jackson is not quite as pessimistic. “We have to look at the industry between now and next spring,” he said.
Fleming cited numerous regulations that constantly harm trucking, and said, “The whole industry is in trouble. He cited such things as regulating hours simply making it tough to make a living.
“It’s a never ending thing,” he said of government interference and then economic woes like fuels costs on top of that. “I’m starting to sound like a farmer,” he chuckled.
Truck show
While some of the views were a little bleak, none of those interviewed believe that the truck show will suffer this year.
Vandermarel summed it up by stating, “It’s a party for the truck drivers.
“The show will still be big this year.”
