Canada's trucking sector is getting a bumpy ride on the country's economic highway as border headaches, tight margins and a growing driver shortage make it difficult for many Canadian carriers to keep on trucking, industry players say.

The Canada-United States border issue is a major concern facing truckers today, says the Canadian Trucking Alliance (CTA). New security measures implemented by the U.S. Customs and Border Protection and the Department of Homeland Security are causing transporters grief.

"There are huge volumes of new rules and regulations hitting the industry in cross-border traffic," says Elly Meister, vice-president of public affairs for the CTA. "And, if that weren't enough, then you have infrastructure problems at border crossings ... especially at the bigger ones, such as Windsor, that create constant delays."

Many companies are also frustrated by the sheer number of changes to customs regulations in recent years that don't always appear to be well thought out, says Bruce Taylor, president of Liberty Linehaul Inc., a trucking outfit based in Ayr, south of Kitchener-Waterloo.

Bayne Stanley, Business Edge
Northwest Tank Lines Inc. specializes in carrying hazardous goods to the U.S., but president Tom Blaney says his company planned well for regulatory changes.

"There have been more changes at the border in the last two years than in the previous 50," says Taylor, who also sits on the board of the Ontario Trucking Association. "They come out with a program ... sometimes not really thinking it through or not really being able to figure out how much impact there will be on the different sectors."

Many Canadian carriers are experiencing cross-border pains and point to regulatory changes around the free and secure trade (FAST) program and the border release advanced screening and selectivity (BRASS) system as the cause.

FAST, which arose in 2002 out of the Smart Border Accord between Canada and the U.S., is an initiative designed to move pre-approved goods across the boundary by reducing information requirements for customs clearance and dedicating special lanes at border points for FAST clearances.

To participate in the FAST program, drivers must undergo a background check and be admissible to the U.S. If approved, the driver is issued a FAST driver card.

BRASS is a line-clearance system adopted by U.S. Customs to pre-screen and pre-approve shipments for release when the truck hits the border. The importer provides a barcode representing the transaction, a manifest and a commercial invoice that is presented by the driver.

Starting on May 1, the U.S. government will require all drivers who wish to use the BRASS system to have a FAST card, a regulatory pothole expected to create problems, especially for companies that do just-in-time delivery to keep factories producing on the other side of the border.

Taylor notes that only about 30 per cent of Canadian drivers who cross into the U.S. will be FAST-eligible by May 1, while 75,000 drivers still wait to get through the system.

What's worse, Taylor says, is if the shipper or customs broker has failed to transmit the shipment manifest to a U.S. Customs agent before the driver reaches the border, he is told to turn his rig around and is slapped with a $5,000 US fine.

But not all U.S.-destined carriers have experienced so many troubles. Tom Blaney, president of Northwest Tank Lines Inc., a hazardous-materials carrier headquartered in Vancouver with offices in Woodstock and Calgary, says his company prepared itself well in advance for the FAST program.

"The cost to be able to work within the U.S. has climbed dramatically if you're not into the FAST program," Blaney says. "Our company, along with other responsible bulk carriers, has been able to deal with it in a timely fashion."

Canadian drivers hauling hazardous goods must undergo background checks, and fingerprinting is also coming down the pipe. Blaney adds his industry already has an alert system to deal with the possibility of the hijacking or theft of a tanker carrying deadly gases, such as sulphur dioxide.

"These are issues of terrorist threats, and we have to take that seriously."

Gene Orlick, president of Orlick's Transport, has avoided sending his trucks southward, choosing instead to stick to the Alberta and B.C. marketplace. But that doesn't mean the Calgary-based carrier is problem-free.

Narrow margins are making it tough for his and other trucking companies, even in the face of rising rates.

"We're not printing money, not like the oil-service companies. We're making a living ... but I can't say I'm proud of the earnings," Orlick says.

He says that while rates are on the rise, they are nowhere near where they should be to allow the carriers to make a buck. Some suppliers, he says, will delay delivering product to their companies if it means saving a bit on the transport costs. Those who are obligated to get the goods delivered by the next day will pay the higher rates.

Gasoline costs and higher insurance rates - particularly for those firms that deliver to the U.S. - take big bites out of the profit margins. But carriers are also being hit by sharp increases in labour costs, the result of too few drivers entering the industry.

Orlick says his labour costs have spiked 20 per cent in the last two years and he expects that trend to continue.

Brian Smith, vice-president with Vaughan-based J.D. Smith and Sons Ltd., is seeing similar developments in Ontario. Like Orlick's company, J.D. Smith is concerned about the lack of qualified, experienced drivers. Meanwhile, many of his current drivers are 50-plus and headed down the road to retirement.

"I'm sure anybody who's in the industry is telling their kids to stay in school and don't become a driver," Smith says. "That's just the way it is now - no one wants their kids to drive a truck anymore."

The CTA is also on top of this issue and working with its members to find solutions. One initiative the organization is pursuing is lobbying the federal ministers of labour and citizenship and immigration to change laws that would allow experienced foreign drivers to sit behind the wheels of Canadian trucks. So far, however, little progress has been made.

"The government doesn't view a truck driver as a skilled professional," Meister says. "So if you were a truck driver from Poland trying to get over here, you couldn't say, 'I'm a qualified truck driver from Poland, let me immigrate.' " (John Ludwick can be reached at ludwick@businessedge.ca)