Follow us on Twitter!
Blog Header Logo
DG&A's Transportation Consulting Blog
Posted by on in Surface Transportation Summit
  • Font size: Larger Smaller
  • Hits: 3849
  • 0 Comments
  • Print

Some Takeaways from the 2014 Surface Transportation Summit Part 1 – Economic and Trucking Trends

A sold out crowd attended the 2014 Surface Transportation Summit at the Mississauga Convention Centre on October 15. This year’s conference had 30 speakers and panelists and two networking tracks. While I was not able to attend all of the tracks, here are some of my key takeaways from this year’s sessions on Trends in the Economy and Trucking.

The 2015 Economic Outlook track featured a leading economist and transportation equity analyst along with two trucking company executives. Despite the recent turbulence in the stock market, Carlos Gomes, Senior Economist with the Bank of Nova Scotia, highlighted that the US economy is trending positively and expects this momentum will carry into 2015. Mr. Gomes stated that U.S. and Canadian household balance sheets are in their best shape in some time as interest rates remain low and energy prices have trended lower. In terms of economic activity, orders for manufactured goods in the U.S. have picked up and the number of backlog orders is at the highest level in years.

In addition, annual automobile sales are above 16 million units and will likely remain at elevated levels due to the average age of cars in the U.S. and Canada. Exports are also trending upwards in Canada and should be sustained by the low Canadian dollar and the fact that the U.S. remains Canada’s largest trading partner. This combination of variables suggests that Canada will benefit from the strong relationship with the United States. Mr. Gomes expects GDP growth in Canada of 3.5% this year and 4% next year.

David Newman Equity Research Analyst, Cormark Securities, noted that regulatory changes in the U.S. and driver shortages are leading to pricing improvements in the trucking and rail sectors. These shortages are pushing spot and contract rates upward. Looking at the PMI (Purchasing Manager’s Index) and ISM (Institute of Supply Management) indices, there is momentum in freight volumes. This could support healthy freight activity through the first six months of 2015. Truck orders are back to 2006 levels that reflect the confidence in the economy. Truckload carriers are consolidating with TransForce and Celadon making major acquisitions. Mr. Newman expects more consolidation in the Canadian market but he also expects the truckload division of TransForce to be spun off.

Mark Seymour, President, Kriska Holdings Limited, talked about the “discipline” and technology that Kriska employed to drive improved pricing and profits. This discipline has allowed his company to have a good “run rate” over the past few years. Driver wages and the treatment of drivers are keys to future growth at Kriska. Mark highlighted the requirement for short term (one year) pricing with long term commitments (“annual pricing conversations”).

Mark observed that the Americans are coming to Canada. It is important to build scale against an American incursion. Shippers are currently more interested in talking about capacity rather than price. He spoke at some length about his joint venture with the Mullen Group and noted that Kriska/Mullen are planning to make acquisitions that will produce more capacity and build more scale. He also noted that there has never been a better time for truckers to look at costs and yields so as to make sure your business is healthy. Mark identified three values that are at the core of the two companies. They are “Profitable, Disciplined and Safe.”

Patrick Cain, Vice President, Business Development, Cain Express and Titanium Transportation Group, has seen increases in volume and his company is focused on taking advantage of opportunities that have “healthy” margins. He also spoke about his company’s acquisition by the Titanium Group and noted the advantage of joining forces was not just increased capacity but the ability to offer a broader range of services than were previously available from Cain Express. The attraction of being acquired by the Titanium Group was that they had the vision and resources to make the strategy work. He noted that he expects to see more small to medium sized companies being integrated into larger companies that can provide more size and scale.

The Executive Panel then focused on business strategies to move their firms ahead in the years ahead. Rob Penner, EVP and COO of Bison Transport, mentioned his company’s efforts to attract drivers through both higher pay and incentive pay. He also highlighted the need to manage costs effectively and make sure that revenue models relate to current market realities.

Ian Murray, Managing Director, Intermodal Marketing, CP Rail, spoke about the expectation that the driver shortage in North America will likely have a positive impact on Intermodal volumes. CP Rail has been making major investments in operating efficiencies (e.g. train speeds, train weights) and terminal improvements which are designed to increase business volumes.

Finally, Doug Harrison, President and CEO, Versacold Logistics talked about the challenges in the temperature control sector of the logistics industry. He specifically touched on the increasing complexity of the business, the globalization of supply chains and the increased use of technology in this sector of the business. These are some of the key trends to watch over the next year.

 

To stay up to date on Best Practices in Freight Management, please join our group (https://www.linkedin.com/groups?gid=4357309&mostPopular=&trk=tyah&trkInfo=tarId%3A1409587506329%2Ctas%3Afreight%20management%20best%2Cidx%3A1-1-1 ) on LinkedIn. To follow me on Twitter, go to @DanGoodwill.

0

Comments

  • No comments made yet. Be the first to submit a comment

Leave your comment

Guest Thursday, 28 March 2024

Most Recent Posts

Search


Tag Cloud

Blockchain business security IANA broker security Blogging routing guide home delivery Rail Schneider Logistics Electric Vehicles supply chain management Job satisfaction fuel surcharge robotics freight rate increases YRCW broker bonds Yield Improvement bulk shipping online shopping Ferromex employee termination risk management driver shortages Truckload Accessorial Charges KCS Government Driver Shortage Life Lessons Warehousing Loblaw Trucking Stephen Harper Trade Vision CRM Surety bond Transportation Toronto Maple Leafs LinkedIn LTL Celadon Canada-U.S. trade agreement YRC Canadian truckers economic forecasts for 2012 JB Hunt dynamic pricing cyber security Grocery cars University of Tennessee freight transportation conference US Housing Market Hudsons Bay Company freight costs capacity shortage Retail FMS Donald Trump driver Transport Capital Partners (TCP) rail safety Online grocery shopping 3PL natural disasters Climate Change NS Broker CN computer Muhammad Ali Emergent Strategy US Election 2013 Economic Forecast Business Development Management Digitization computer protection shipping freight broker Canadian Protests Leadership President Obama Hockey cheap oil buying trucking companies UP BNSF ProMiles asset management USMCA business start-up computer security CN Rail 2014 economic forecast peak season Right Shoring Carriers Dedicated Contract Carriage home delibery Trucker Protest small business autonomous vehicles Sales Training Doug Nix Outsourcing Sales Success failure entrepreneur capacity shortages US Manufacturing consumer centric shipper-carrier roundtable 2014 freight forecast dark stores FCA digital freight matching Covid-19 customer engagement transportation audit 2014 freight volumes TMS Retail transportation USA Truck truck capacity Coronavirus Leafs Swift Masters in Logistics MBA Freight Shuttle System Value Proposition Reshoring freight marketplace Transportation service NAFTA MPG Freight Management Uber Freight Politics Software Advice pipelines Packaging APL NCC Railway Association of Canada TransForce TMP Worldwide Microsoft marketing Distribution Horizontal Supply Chain Collaboration Comey Social Media in Transportation coaching tanker cars truck driver Crude Oil by Rail Montreal Canadiens Spanx drones mentoring shipper-carrier contracts Sales Management economy freight bid shipping wine Anti-Vax RFP Transplace autos financial management Finance and Transportation Map-21 Tariffs Rate per Mile Scott Monty Transportation Buying Trends Survey energy efficiency Business Strategy Canadian Transportation & Logistics Regina $75000 bond Failure Deferred Packaging Shipper Global Transportation Hub driverless Fire Phone freight transportation in 2011 laptop Dan Goodwill freight RFP Inbound Transportation Search engine optimization Digital Freight Networks Canadian freight market hiring process ShipMax Career Advice CP Rail FMCSA Derek Singleton Entrepreneur Dedicated Trucking CSA scores selling trucking companies 360ideaspace Freight Business Transformation Strategy professional drivers transportation newspaper US Economy recession truck drivers China technology dimensional pricing Education Impeachment Omni Channel Canada freight payment Otto Adrian Gonzalez derailments New York Times e-commerce Consulting intermodal General Motors Doug Davis freight audit Rotman School of Business shipper-carrier collaboration 2015 Economic Forecast freight cost savings future of freight industry Colilers International the future of transportation US Auto Sales BlueGrace Logistics EBOR small parcel Wal-Mart Harper Davos speech trade Transloading Conway Associates Social Media Business skills Trump Driving for Profit Amazon economic outlook Keystone Pipeline carrier conference Freight contracts Success freight transportation Justice Tracy Matura Geopolitics David Tuttle automation NMFC CSA freight payment freight audit Global experience Bobby Harris Sales Strategy Freight Capacity Crisis management Werner Load Boards Canada U.S. trade Habs Twitter 3PLTL CSX Freight Matching FuelQuest solutions provider LCV's freight forwarders Canada's global strategy last mile delivery driver pay Whole Foods ELD Freight Recession Infrastructure transportation news Training New Hires Training 2012 Transportation Business Strategies. Jugaad FCPC Freight Carriers Association of Canada Canadian economy network optimization Transcom Fleet Leasing CITA Shipper Pulse Survey Freight Rates trucking company acquisitions Cleveland Cavaliers Load broker Sales Facebook Toronto freight agreements

Blog Archives

March
February
December
October
September
August
June
May
April
March
January