Isaac Instruments brought the leaders of Quebec’s two largest trucking companies, Karine Goyette, co-president of C.A.T. Transport, and Eric Gignac, chief executive officer of Groupe Guilbault, together on stage to open its Horizon 2024 user conference at its Saint-Bruno-de-Montarville headquarters to discuss current industry issues and challenges.
The event began by presenting the top 10 concerns of U.S. fleets in 2024, the result of an annual survey by the American Transportation Research Institute. Asked if these concerns expressed by U.S. carriers reflected their own, Goyette and Gignac agreed that the number one concern, the economy, also topped their list.
“It all depends on the type of transport, what each company does, the regions served, but on our side, it’s actually the economy that has been the number one concern for the last 12 to 18 months. The economy has been at a very low level, especially since the pandemic, although we have seen a certain upturn in recent months, but in terms of volumes, as far as pricing is concerned, we have yet to see any improvement,” Goyette noted.
Gignac confirmed that 2024 is a difficult year for carriers, both in terms of full and partial loads. “Our customers are simply selling less,” he summed up. “Those who used to ship three pallets a day for the past 15 years are now shipping one or two.” As a result, the labor shortage is temporarily slipping down the priority scale.
Driver Inc.
But the big concern for Quebec carriers is the Driver Inc. scheme and the damage it is doing to freight rates and safety. “Many people underestimate the consequences for our trucking companies. It’s already hitting hard, and it’s going to hit even harder in the coming months if nothing is done,” Gignac warned, referring to the unfair competition and tax inequity engendered by trucking companies who knowingly fraudulently classify employees as incorporated businesses in order to avoid payroll taxes.
And then there are the safety risks on the road. “We’re also discovering that schools are issuing fake Class 1 driving licenses. If drivers aren’t trained, if they end up with bogus driver’s licences issued by bogus schools, then we end up with accidents like the ones we see on [Highway] 401,” said Gignac, who believes that data collection and use become very important in such a context.
Bob Costello, economist for the American Trucking Associations, predicted that the skies could clear for truckers by mid-2025.
“On the LTL side, the bottom of the barrel has been reached,” Gignac said. “Since mid-September, we’ve started to feel a small increase, and we’re not going back below the lows we’ve reached. According to our sources, spring 2025 should be more interesting.”
Goyette said that the full-load sector has also seen an upturn since September. “When we listen to our customers, we get a lot of feedback that the sectors we’re in are doing better. But we’ll have to see a tightening of capacity before we see an improvement in pricing, which is likely to happen in the spring.”
When it comes to the issue of labor shortages, which are always less pronounced during a slowdown, the panelists agreed that the key is in retaining the current workforce.
“I can’t remember ever having seen a recruitment period like the one we’re seeing today, so it’s easier,” Goyette said. “We’ve done a lot of work on our retention over the past few years, and in today’s economy, we’re still paying attention to our drivers, but mechanics still pose a big challenge, and for the first time, we’ll be exploring international recruitment on that side.”
At Groupe Guilbault, recruitment challenges lie more on the forklift operator side, and the crux of the matter is retention there too. “I always say to my HR people: before putting everything into recruitment, can we first look at the people we already have, and not just on the driver side, but also the people in operations, the dispatchers, the managers? We have to listen to them. Retention is hyper-important, even more so than recruitment.”
EPA 2027 implications
The Environmental Protection Agency’s 2027 emissions reduction standards for heavy-duty vehicles are forcing carriers to make choices now about truck renewal. Many intend to bring forward vehicle replacement to avoid the problems that can arise with new technologies.
The first repercussion is that trucks will cost more – some 30% more per unit, according to the most conservative estimates.
At Groupe Guilbault, truck renewal is being accelerated. “For the past four or five years, we’ve been renewing 30 trucks a year. Because of EPA 27, we’ve increased that. We’ll be renewing 60 trucks in 2025 and the same in 2026,” Gignac said.
C.A.T. has taken a few months’ break from renewing its trucks due to the economic situation. But because of recent acquisitions, the company needs to modernize some trucks and will have to renew several before 2027.
“We’re hearing a lot of comments that truck manufacturers won’’t be ready, that trucks will cost US$30,000 or US$40,000 more. If we can renew before then, of course we’re going to do it as much as possible,” Goyette said.
C.A.T. already has a long history with natural gas trucks, a technology that is even more part of its green strategy with the arrival of the new Cummins 15-litre natural gas engine. “We’re looking forward to the new 15-liter engine with Freightliner trucks, possibly in the fall of next year. We’ve been testing a 15-liter for a year, so we know what to expect.”
Cyber threats
C.A.T had a bad experience in early 2021, when hackers managed to encrypt data. The company realized this thanks to Isaac Instruments, and the damage was quickly contained. “We were starting to put measures in place to prevent hacking. We now have a system that is capable of preventing hacking, but we often say to our team: don’t ask yourself if it’s going to happen [a hacking attempt], but when is it going to happen?”
“More and more, with all the software we use, it’s true that it’s probably going to happen,” agreed Gignac. “It’s important to educate our employees, to invest in protection systems. It’s costly, but it’s necessary.”
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