Page 36 - Newcom

OTA Congress
Tough Times
OTA Congress panel tackles the
toughest issues in trucking
Driver misclassification, an ongoing glut
of capacity putting downward pressure
on freight rates, cross-border trade, and
rising costs were some of the topics cov-
ered by a panel of industry heavy hitters
at the Ontario Trucking Association
(OTA) Congress Oct. 30.
Avery Vise, vice-president of trucking
with industry forecaster FTR, visited
from the U.S. to share insights into the
current freight market.
While he said the market should
improve slightly in the coming year,
don’t expect drastic changes as there
remains too much capacity and stagnant
freight growth.
The consumer economy, he added, has
little room for growth as it and employ-
ment are already strong.
“You can’t have a recovery just from
capacity [leaving],” Vise said. “Even if
capacity were to go away, you have to
have freight growth to some degree.”
Asked why capacity has been slow
to exit the market, he said “We had
an unimaginable amount of stimulus
[during Covid], which also went to peo-
20 TODAY’S TRUCKING
ple who decided to leave their jobs as
truck drivers and get their own author-
ity, creating a surge in new authorities
that we’ve never seen before.”
He noted the U.S. still has 36%
more active for-hire carriers than it
did pre-pandemic, and that stimulus
cheques have enabled those new opera-
tors to hang on in a weak market longer
than expected.
Bouncing around the bottom
David Tumber, president of Kriska
Transportation Group, provided a fleet
perspective from the front lines. “We feel
like we’re kind of bouncing around the
bottom and we have for a few months
now,” he said.
That has come amid a sharp increase
in operating costs.
“I think across the board, our busi-
nesses have seen single-digit rate defla-
tion but double-digit cost appreciation
on our cap-ex side,” he said.
Kriska has responded by putting a
pause on company acquisitions and
scrutinizing how it deploys capital.
(Photo: OTA)
“The focus has been on getting our
house in order, focusing on the balance
sheet, and working with the business
we’ve got,” he said.
Newly elected OTA chairman Mark
Bylsma, president of Spring Creek
Carriers, noted being a small carrier
in this environment may allow for
increased agility, but it also presents
more exposure to the volatile spot
market. His company is struggling with
an ­ imbalance of loads and rates going
across the ­ border.
“Right now, southbound to the U.S.,
the volumes are there,” he said. “We’re
happy with those volumes. But north-
bound coming back from the U.S. is a
completely different story.”
Fleets already dealing with higher
costs will soon need to brace for anoth-
er costly addition. Vise said EPA27
emissions regulations are likely to add
US$20,000 to $25,000 to the price of a
Class 8 tractor in 2027. While those reg-
ulatory changes will come with an OEM
requirement to extend the emissions
system warranty, Vise said it’s unclear
how much benefit will be enjoyed by the
initial truck buyers, who typically sell
those units before the extended ­ warranty
– stretching to 450,000 miles (720,000
km) – would kick in.
“The question then becomes, can they