I started covering trucking just about when the impact of federal deregulation began flailing away at the ranks of what had been called “regular route” common carriers in the good old regulated days.
Within a few short years, the honor roll of carriers literally drummed out of business for being unable to compete successfully in a fully competitive marketplace grew and grew until it was tough to find a familiar company name still out there truckin' as before.
In any industry, the big promise of deregulation is that it will force the participants in the affected field to be more effective competitors. That, the theory goes, will drive waste out of the system and eventually lower costs for other businesses and consumers. It's funny how no one ever says much going in about what it will do for those actually engaged in the given industry.
But as in all things, if someone wins, someone loses. And besides the initial heavy toll wrought on old-line carriers, deregulation has cost trucking by keeping rates down pretty much across the board for about 20 years.
That's why we're happy to report David Bradley, CEO of the Canadian Trucking Alliance, is making a point of telling both shippers and carriers across North America that a “correction in trucking rate structures is underway — with carriers looking at the best opportunity they have had since deregulation to improve their financial performance.”
According to Bradley, that's because the dynamics of the industry are changing for the better. “There are still many challenges such as high insurance and fuel costs, border security, new hours of service rules, etc.,” he says, “but the industry's ability and resolve to be compensated for those costs is improved.”
Bradley says the major impetus for this change is simply a lack of capacity brought on by high demand and, no surprise here, the shortage of drivers.
“The markets work in slow and disjointed ways, but the mood in the marketplace is more accepting of rate increases, surcharges and accessorial charges,” Bradley contends in the “stump speech” he gives to audiences inside and outside trucking.
“The reality is the trucking industry can no longer afford to absorb all its cost increases. Nor should it have to,” he argues.
“Moreover, our drivers expect to be paid a fair wage for their work and they are demanding that they be paid for delay times and who can blame them,” Bradley says. “Remember, drivers are not only integral to a carrier's business — they are also integral to the shippers' businesses. Who else knows your products, your logistics systems and your customers better than the truck drivers that move your goods?”
Bradley does admit, no surprise for any of us, that solving the vexing driver shortage issue is a complex matter “and will take years.”
On the other hand, he says cooperation between shippers and carriers to improve loading and unloading efficiency has been good in the face of hours of service reform.
“Most shippers seem to have an understanding of the [loading] situation and many are working with their carriers to improve efficiency and productivity together,” he notes.
“There is still a long way to go,” Bradley remarks, “but more and more the trucking industry is realizing it's its turn.”
In other words, think of this as payback time. Whether you survived deregulation and learned to prosper somewhat under it, or you're a more recent entrant still waiting for the expected big bucks to roll in, your day in the sun may at last be dawning. Just make sure you're awake to cash in.