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Market Mania

Catching up with the progressive province and its food terminal
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The Canadian Council of Motor Transport Administrators (CCMTA) is in the process of finalizing its own proposed ELD mandate, which will likely take effect by 2020. Canadian officials have already published a draft set of rules that would make ELDs a lawful requirement for drivers. Canadian truckers who cross the border into the United States, however, are already required to use an ELD (for extensive information on the industry’s reaction to ELDs, look for the other supplement to this edition of Blueprints, on transportation and logistics).

“No doubt, the biggest issue for us this year is logistics,” remarks Davidson. “We’re dealing with the e-log situation and the hours of trucks, and that’s affecting everyone across the continent.”

Davidson says the ELD requirement adds a full day to the delivery time of product coming in from the United States. “In the past, you could have a boat unloaded in Philadelphia or Wilmington pretty much anytime of the day today, and it would be here by tomorrow morning,” he explains. “This new e-log essentially adds a day to our expectant receiving times, so that really changes things—especially when you’re trying to be just-in-time and keep your inventory under control.”

Higher rates
The ELDs are also associated with higher costs. “Because of e-logs, trucking companies are having to pay drivers for an extra day of work, so it’s adding to the cost,” adds Formusa.

Jaime S. Furman, president of Sunbelt Logistics Group, a transportation company based in Mississauga, offered his thoughts: “Back in October and November of 2017, transportation costs began to escalate to levels unseen in our industry,” he recounts.

“This caused major instability and prices spiked to exorbitant levels,” Furman adds. “Since then, we’ve seen a softening in transportation costs—however, they still remain about 35 percent higher than last year this time. I expect this increase will not ease, and that as demand for transportation increases, so will prices.”

There is at least one purported benefit to the ELD mandate. “We need to remind ourselves that the overriding reason for ELD introduction by the U.S. Department of Transportation is safety,” points out Furman. “Safety on the road is paramount as more and more goods flow by truck across North America.”

Controlling other costs
In addition to higher transportation and shipping costs, Ontario’s buyers and sellers are looking for ways to absorb these and other operating expenses.