As 2023 winds down we surveyed several Canadian fleet executives to find out what they feel 2024 has in store. Today, we turn our attention to the west coast and ask Glen Parsons, owner of Alchemist Specialty Carriers what he sees in store in the year ahead.
What is your outlook for freight and business conditions in the Canadian transportation sector in 2024?
If we are looking at all aspects of this industry I think we have a long road ahead. Most of our industry is consumer-driven and I think spending has not been the same as in the past year and once we hit the January blues people will start to tighten their belts.
Some of the interest rate issues, and higher cost of living has not hit us fully and once it does I think we will see a pullback in spending even more. I have spoken to some colleagues that I know and they have not seen the Christmas rush they have seen in the past, so that makes me feel we are in for some slow times ahead.
Some of this industry that is not as consumer-driven will do better but it is still a drive to survive with pressures on rates and the overlap of additional equipment and high cost of borrowing we encountered over the last year. This part of the transportation and logistics industry should see a quicker return to stability since it is more resourced based and are hauling necessities not consumables that consumers require.
What will be the keys to succeeding in that environment in the year ahead?
For ASC over the last two years we have purchased a lot of new equipment and replaced old equipment while prices for used was very good. We replaced 80% of our trailers and this also streamlined the fleet so that all our components and equipment sizes are consistent. Although we may have an additional 10- 15% equipment today we are able grow more with this equipment due to fact that we have an overall fleet that is compatible. A new fleet will also give us lower operating cost over the next two years, which in this industry can be substantial.
While doing this we also were able to push a lot of cash back onto our balance sheet. We also solidified a really good relationship with all of our lenders and are keeping them informed on our business since they all have a concern about this industry and the year ahead.
Operationally, we are focusing on cost controls; we are also taking advantage to do more overall training of our drivers especially on safety and importantly to make sure we are servicing our customers to the highest level so we can keep the competition away.
If you have good people, good equipment and a good customer base you will be able to survive this market uncertainty into the future and will be stronger coming out the other end of it. This is a market cycle that we have all seen in the past and is part of running a business.
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