These are distressing times for Canadians. Despite numerous meetings between the Canadian and U.S. (and Mexican) delegations over the past year, NAFTA negotiations reached another impasse on Friday, August 31. It is not surprising.

The Americans have negotiated in bad faith. Canada was excluded from the recent negotiations between the U.S. and Mexico. Rather than just negotiate the exchange of auto parts and minimum salaries for auto workers, the two parties reached an agreement on a much more extensive range of issues. Clearly the Americans sought to and succeeded in muscling the Mexicans into agreeing to a 2-way pact with them. The Mexicans were also not forthcoming in advising their Canadian counterparts of their intention to reach a multi-faceted two-party agreement with the Americans.

President Trump is threatening to apply a 25 percent tariff on auto parts manufactured in Canada if he doesn’t receive concessions on access to Canada’s dairy market, on a dispute settlement mechanism and an increase in the level of duty-free purchases. According to a John Holmes, a Queen’s University professor emeritus and research fellow at the Automotive Policy Research Centre (https://www.macleans.ca/economy/what-will-happen-if-trump-slaps-a-25-per-cent-tariff-on-canadian-made-cars/?utm_source=nl&utm_medium=em&utm_campaign=mme_weekly&utm_content=202508&utm_term=0&sfi=df0198bed6a37f0cdd34c52c77052eef ), the impact on Canada would be “disastrous.”

The oddity in applying these tariffs is that American consumers would be the first ones to feel the impact. According to industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants, automakers would pay an extra $5,000-$7,000 for the vehicle they plan to sell. “Unless the auto companies chose to eat some of the extra costs, it would price most of those vehicles out of the marketplace,” DesRosiers says. “There’d be no choice for consumers.” Americans won’t be happy paying thousands extra for a Toyota RAV4 simply because it came from Canada—meaning the nearly 1.8 million vehicles Canada ships south of the border annually would have a much tougher time finding a home.

Those of us who came into the freight transportation industry in the 80s and 90s remember when there were distinct sets of service providers. There were small parcel carriers, LTL carriers, full truckload service providers and rail carload operators. Of course, during slow times, truckload carriers would move some large LTL shipments. The small parcel carriers targeted shipments in the low end of the LTL freight sector. Even back in the 80s. truckload consolidations (of multiple LTL shipments) were popular in certain industry segments (i.e. auto parts). However, these four labels were a pretty good reflection of the major types of transportation services available at that time. Companies in each of these segments had a unique core competence and tended to operate in their area of expertise.

Today, Transport Topics and other journals still publish lists of the top 100 truckload carriers and top 50 LTL carriers. However, when you examine the business activities of a number of companies in each sector, you realize that these labels no longer fit well with the diversity of services that many trucking companies currently provide.

As an example, JB Hunt has been known for years as one of the premier truckload carriers in North America. At one point in time, this was a very accurate description of this company. However, when you examine the revenue of this company, over-the-road truckload freight now represents only five percent of the total. Through a focused business strategy and organic growth, intermodal transportation, dedicated fleet movements and freight management now make up the bulk of their business.

XPO Logistics, through their acquisition of Conway, has $3.6 billion in LTL revenues and now ranks third in the rankings of LTL carriers. This company, well known for its large logistics operation, now has a strong presence in two of the major sectors of the freight transportation industry.

Ten years ago, my colleagues at Newcom Business Media and Dan Goodwill & Associates set out to create a high quality educational and networking event for Transportation Professionals and Decision-Makers. From humble beginnings, the conference has evolved into Canada’s premier event in the Surface Transportation Industry. The Surface Transportation Summit now attracts hundreds of Logistics executives, Transportation Industry owners and leaders, vendors to this industry, government officials, consultants, educators, and students.

To celebrate the tenth anniversary of the Summit, the organizers, in partnership with the Freight Management Association of Canada, the Canadian Trucking Alliance and the CSCMP Toronto Roundtable have created an agenda that encompasses the most important issues of the day and assembled an elite group of moderators and panelists to address these topics. As always, the conference will begin with a discussion of the top forces that have shaped the economies and the freight industry in Canada and the United States in 2018 and will power it in 2019. Paul Ferley, Assistant Chief Economist, Royal Bank of Canada, will provide an overview of the direction of the Canadian economy. He will be followed by Walter Spracklin, Managing Director, RBC Capital Markets and David Ross, Research Managing Director, Stifel Financial Corp who will discuss the trucking and rail industries in Canada and the United States. This will be followed by a moderator led discussion with Paul Roach, President & CEO, Belmont Meat Products and Scott Smith, President, JD Smith & Sons who will share their insights on the economic projections for 2019.

The will be followed by an inside look at New Freight Transportation Technologies for Manufacturers, Distributors, and Retailers. In brief interviews, Brian Hodgson, VP, Transportation Strategy, Descartes Systems will provide some thoughts on Shipment Visibility, Dave Brajkovich, Chief Technology Officer, Polaris Transportation Group, and Iliana Oris Valiente, Managing Director, Accenture | Founder at ColliderX Blockchain R&D Hub, will discuss the Blockchain movement, Martin Abadi, Counsel, Borden Ladner Gervais LLP will provide his insights on Connected Trucks and Charles Fallon, Principal, Supply Chain Intelligence will talk about Warehouse Automation.

The Shipper-Carrier Roundtable has always been a popular track. This year Dan Einwechter, Chairman and CEO, Challenger Group of Companies, Tracy Raimondo, Vice President, Logistics, Normandin Transit, John Ferguson, President, Purolator, Andrew Fuller, Assistant Vice President, Domestic Intermodal, CN Rail, Geoffrey Joseph, President & CEO, Joseph Haulage Canada, Martin Pede, Manager Zinc Sales, Hudson Bay Mining and Fiona Renzi-Fantin, VP, Supply Chain, Maple Leaf Foods will debate some of the hot issues facing shippers and carriers in 2018.

The truckload sector of the freight industry is different from the LTL and small parcel segments in two significant ways. Unlike the other two segments, anyone who can buy or finance the purchase of a tractor-trailer unit and can drive the rig, can enter the industry. Freed from the requirement to build cross-dock facilities and/or buy sorting machines, the barriers to entry are low.

There are approximately 540,000 truckload carriers registered with the Federal Motor carrier Safety Administration in the United States. These range from 1 truck to 20,000 truck fleets. The majority have less than 20 pieces of equipment in their fleets. These companies are projected to generate $358.6 billion in revenue in 2018. The comparable Canadian number would probably be in the range of ten percent of these numbers. The truckload sector is about ten times the size of the LTL sector.

Revenue/Tonnage Growth in 2018

The following is my annual report on the state of the LTL Freight Industry in the United States and Canada. Here are links to the top 100 carriers in Canada (https://www.todaystrucking.com/top-100-ranking-canadas-largest-hire-fleets/ ) and the top 25 LTL carriers in the United States (https://www.logisticsmgmt.com/article/the_top_25_trucking_and_less_than_truckload_ltl_companies_in_2017 ). The combined revenue of the 25 largest U.S. LTL trucking companies remained unchanged at $31.8 billion in 2015 and 2016, according to The Journal of Commerce’s 2016 ranking of the Top 25 LTL Carriers, prepared by SJ Consulting Group. In 2017 annual revenues grew by 7.8% to $34.5 billion.

The Booming Freight Market of 2017 - 2018

Freight volumes are strong as we approach mid-year. Carriers, hampered by a lack of drivers and faced with new time constraints due to mandatory electronic logging devices (ELDs) in the United States, are increasingly being selective in picking the best-yielding freight for their freight lines. LTL carriers are picking up volume from the tightening TL market. Some large TL carriers started rejecting lighter loads of 5,000 pounds to 10,000 pounds earlier this year, and that freight is now moving via LTL carriers. The net result is LTL freight base rates are soaring with some experts projecting increases of 4 to 5 percent or more. In addition, LTL carriers are doing a better job quoting accurate dimensional pricing and accessorial charges which also places upward pressure on rates. This environment will likely continue for the remainder of this year.

The LTL Industry remains a Non-Union “Big Boys” Game