The price of diesel in Canada is hitting record highs and displacing labor as most carriers’ top operating cost, according to David Bradley, Canadian Trucking Alliance chief executive officer.
Bradley made the comments before the Pharmaceutical and Personal Care Logistics Association June 20 in Gatineau, Quebec, Canada, according to a press release from the CTA.
He called the situation "bizarre" in which upwards of 40-50 percent of current revenues are the result of fuel surcharges. However, he added, "putting that genie back in the bottle is extremely difficult. Changing fuel surcharges in isolation of rates is not tenable for carriers. You want a new formula, fine. But you have to look at all the fuel used to pick-up and deliver your load. You want lower fuel surcharges, fine. But then rates have to go up. Whatever formula you come up with carriers want you to stick to it."
Bradley urged shippers to take a longer term view and lock in capacity now. "Many markets are soft right now, there is excess capacity and changing balance. But the capacity situation will resolve itself and when it does things could tighten quickly," he said.