This week President Trump imposed a 25% tariff on imported steel and a 10% tariff on imported aluminum products from Canada, Mexico, and the European Union. The rationale was that this was done for reasons of National Security. In view of the very modest size of Canada’s military and the longstanding, peaceful relationship between the two countries, this explanation is ludicrous.

We are also being led to believe that the President apparently took these actions to protect jobs in the steel and aluminum industries, to correct what he deems as unfair trade practices by other countries and to bully Canada and Mexico into making concessions on the new NAFTA agreement that has been under negotiation for many months. Again, these are weak reasons to damage the strongest trade relationship between any two nations in the world.

In the case of NAFTA, the most recent sticking point has become the “sunset clause.” Vice President Mike Pence advised Prime Minister Trudeau last week that he'd have to accept this clause, which would make the trade agreement subject to renegotiation every five years. Trudeau said he couldn't accept the terms. The sunset clause is just one sticking point. The U.S. is also seeking changes to the "rules of origin" that govern how much of a car must be manufactured in North American to avoid import taxes in the three countries that make up NAFTA.

As a Canadian businessperson, I have two messages for Prime Minister Trudeau, push back hard against these bullying tactics and hit President Trump where it hurts. As the world has seen, persuasion, charm, diplomacy, and logical reasoning don’t work with this president. The fact is that both French President Macron and German Chancellor Merkel, two long-time allies, went to the White House in recent weeks to reason with him. Their visits appear to have had no impact.

While there are lots of great sports stories at this time of the year, the Vegas Golden Knights should rank at or near the top. Even if they don’t win another game this season, they have exceeded all expectations. They are currently among the two final teams battling for the Stanley Cup, an amazing accomplishment. While a number of other top professional hockey teams (the Penguins, Jets, Bruins, Predators, Leafs) have been eliminated, this first-year expansion team is still in the hunt. How do you explain this unprecedented success story?

Start with a Nucleus of Good People

The Golden Knights invested in good management talent. They hired a quality GM, good coaches, and support staff.

In my last blog, I identified one of the recurring problems we encounter in working with shippers on a day to day basis, namely a lack of complete and accurate information on their freight transportation activities and expenses. I would argue that “you cannot manage what you cannot measure.” Good quality freight data is an essential component in the management of freight transportation.

Detailed, quality freight spend data can allow shippers to identify consolidation opportunities, to address chronic operational inefficiencies that result in excess or accessorial costs, to highlight “maverick” spend (e.g. higher cost carriers being used that are not listed in routing guide), to rectify the use of non-core carriers or more expensive modes and/or to create opportunities to construct more efficient routes and round trips. Shippers with poor quality and/or inaccurate freight cost data place themselves in a vulnerable position. Here are some steps that shippers can take to address this shortcoming and improve their profitability.

1. Build a Quality Freight Spend Data Base

For the past 15 years, my colleagues and I have been working with shippers throughout North America to help them save money on freight transportation. In 2018, this cost has hit the radar screens of CEOs, as the tightness in freight capacity has placed upward pressure on freight rates. Many shippers have been experiencing rate increases in the high single digits and even double digits. Some CEOs have been highlighting the impact of freight costs during their quarterly investor calls and earnings reports.

A company’s freight costs often represent between two and ten percent of total revenues. For many companies in the manufacturing, distribution and retail sectors, their expenditures on freight have a direct and significant impact on their companies’ bottom lines.

Twelve years ago, I wrote a blog on this topic. In that blog, I identified one of the consistent problems we encounter in working with shippers on a day to day basis, namely a lack of complete and accurate information on their freight transportation activities. Twelve years later, this problem persists, and it is not limited to small companies. In fact, many companies with freight expenditures of five to fifty million dollars or more face the same problem.

“You can’t manage what you cannot measure.” Good quality freight data is an essential starting point in the management of freight transportation.

Last week’s TruckWorld event at the International Centre in Toronto was a great opportunity to connect with old friends and get updated on the state of the freight transportation industry. It was clear from the huge attendance at the show that is a very good year to be in trucking. The negotiating leverage has clearly swung over to the carrier side. Shippers are being told to accept rate increases or risk losing their truck capacity to other manufacturers and distributors.

One trucking company owner summed up the state of the industry this way. The industry is facing four problems: drivers, drivers, drivers, and drivers. This caused me to reflect on what various trucking companies are doing to address this issue.

Signing Bonuses

Companies are offering from $2000 to $10,000 bonuses to experienced (one year plus) drivers.