T&P Trucking, Ltd.

Looking Back at 2015

As we move forward into this new year we can’t help but look back at 2015 with appreciation over what we have achieved. We faced many challenges during 2015, but along with these challenges came opportunities. Let’s look back over the past year to see what it looked like, so that we can understand the challenges and appreciate the opportunities that came from them. Reflecting on these prepares us for what we may face during the rest of this year. What were some of these challenges, opportunities and statistics? What opportunities do we expect for the coming year?

Challenges

The challenges that we faced during 2015 were many. For instance, we faced uncertainty in the global economy, a weakening Canadian Dollar, diminishing oil production in Alberta, changes in our management, an increase in border regulations, soaring prices of insurance, repairs, and tires, new truck costs and their emissions problems, the long standing driver shortage, on and on it goes. While some of these existed prior to 2015, a few only revealed themselves or peaked during this past year.

The Global Economy

Despite the “recession” that rippled around the world in 2007-2008, Canada’s economic status remained largely unaffected because of high commodity prices worldwide and due to its conservative banking regulations, rich resources and stable markets. Investors quickly pulled their investments from unstable markets around the world and rushed them to the safe haven of Canada. As a result, the Canadian Dollar made great gains over major world currencies including the US Dollar, providing security and wealth across Canada.

Enter 2015. The US economy was already emerging from its slumber and quickly gaining ground as the standard world currency leader should, displacing the Euro and Canadian Dollar currencies. All the while, investors retreated from Canadian markets and began the shift to the US and other emerging markets. The OPEC nations had already begun ramping up their oil productions at an unprecedented rate, with Saudi Arabia leading the way, creating an oversupply worldwide that caused oil prices to plummet while dragging down other commodities in its wake. President Obama put the final nail in the coffin of the valuation of Canada’s oil supply, when axing the Keystone Pipeline deal, by calling it “dirty oil”. All the while, reform was rolling around Canada with the appointment of a new Prime Minister, Justin Trudeau, and the Liberal party. Change was taking place in 2015 at an incredible rate in Canada, and it happened so fast that it took many people, markets and industries by surprise.

How did it affect us in the trucking industry out west? By May 2015, the steady supply of shipments from the US to Canada as well as shipments to Alberta had slowed to a near halt. Meanwhile, Canada to USA shipments were not increasing as the US economy was still recovering – but not enough to make up for the decline in these other areas. Would we be able to find enough work for our drivers in these conditions?

Increased Security and Safety Regulations

Since September 11 of 2001, border trade and traffic flow has come under greater scrutiny by government organizations on both sides of the Canada-USA border. Over time, T&P Trucking has taken the initiative to improve the security of our own company and our supply chain by becoming a FAST approved carrier with FAST approved drivers, by joining CBP’s C-TPAT and the CBSA’s PIP programs. Since 2004, we have been filing all manifest entries for shipments entering the USA through their ACE Manifest program.

Make no mistake, we are still feeling the effects of September 11 at the border, encountering stiffer security and safety regulations, regarding truck traffic, year after year. To the average citizen, this may not seem like a big deal. For trucking companies, this makes it much more difficult to operate. While we fully recognize the need for safe and secure border channels, we also recognize that the more safety and security regulations changes there are, the more this can increase our overhead in operating costs.

An example of this, in 2015, was the implementation of the CBSA eManifest program finishing its trial run that year, with it coming into full effect along with the AMPS penalty program in January 2016. What does this mean for us? All shipments destined for Canada must be precleared electronically with a minimum of a 2 hour window prior to its arrival. This brings added challenges. For one, it adds 4-6 hours per day of additional work for our team of dispatchers, creating a heavier workload and an increased cost in operations. Second, the constant worry of hoping that each shipment and its documentation will be accepted by border officials brings the effect of added stress on drivers. Sometimes too much stress can create a decline in safety, as drivers are feeling the time pinch. This brings the chance of drivers focusing on on-time demand instead of job safety and security. Everyone likes to get home to spend quality time with their families. If drivers have to spend added time on the road due to extra border and inspection delays, this can leave them in a rough mental state. They may see the highways more than they do their own family.

Opportunities

Some challenges we must take on in full stride and without contest, while others afford greater opportunities to take advantage of. What opportunities did we find? And how have we reacted to these?

Fuel Prices

With the oil glut happening that was affecting worldwide supply, all the while grinding down Canada’s oil production and markets prices, it left behind lower fuel prices. You can see this here for the US Energy Information Administration statistics presented below.

This reduction in fuel prices greatly reduced our operating costs by as much as 20%-30% over the 2015 year. This, of course, gave us the opportunity to pass on these savings to our customers. As we stretch into 2016, we will continue to adjust our rates so as to increase everyone’s competitiveness in their own industry and market.

Exchange Rate

With the Canadian markets being greatly affected by the declining oil and commodity prices, the Canadian Dollar thus declined showing the lackluster support of Canada from national and foreign investors. An example of the decline can be seen here from the Bank of Canada records:

This, of course, is opening up new opportunities for Canadians country wide. Tourism is on the rise as more and more Americans come to Canada to take advantage of the ~40% savings to be found here. This also means that exports to the USA will be on the rise, as Canadian exports make the transition to diversification in manufacturing, which was high during 2003 when the exchange rate was comparable to now.

We see that low fuel prices and an aggressive exchange rate advantage will make it possible for us at T&P Trucking, as well as other Canadian companies, to compete more aggressively with our lower value Canadian Dollar against our neighbourly US transportation and US rail supply companies, which base all of their rates on their more expensive US Dollar. This greatly benefits our customers who sell to the USA or purchase from Canada, as we can pass on the savings from this exchange rate advantage, allowing our customers to be more competitive in their own industries and markets.

2015 Statistics

Now that we have explained both sides to our review of 2015, how did we actually fare? Covering almost all of North America means a lot of shipments need to be sent out and received on time. And our trucks spent a lot of miles driving that cargo around. How much exactly? What are some of our own statistics that we can share?

Accumulated Mileage

At T&P, our trucks alone travelled a total of 2,320,511 miles. If we could drive in a straight line around the circumference of the earth, over oceans and through mountains, that is enough of a distance to travel around the earth 93 times! This chart below shows the miles per Province/State that we ran in our typical routes during 2015.

Of course, we were not simply driving around aimlessly, 5 miles out of 6 were for hauling freight of every sort across more than 35 provinces and states. What kind of materials are we talking about?

Types of Materials Moved

As found on our services page, we are prepared to handle many different types and forms of materials. In the 2015 year, we transported everything from an LTL shipment of plastic, weighing 12 lbs, all the way up to a heavy full truckload (FTL) shipment of steel, at a net weight of 64,382 lbs. For the whole year, our combined numbers ended up at a staggering figure of 288,478,118 lbs. The following chart compares the quantities of the major commodities we transported during the 2015 year.

As you can see, we were kept busy moving more than 4800 full truckload shipments on our 25 trucks throughout last year. Steel is the greatest type of material that we move, being the most dense and compact. However, not to be dismissed is the amount of wood and rail products, as well as construction materials, that fill out our trucks on a regular basis.

Moving Forward

Throughout 2015, we encountered positive achievements despite multiple challenges. It was these challenges that encouraged us to adopt new ideas and skills, attributes that we will continue to use in the many years to come.

We have seen the advantages of adapting to the ever changing Canadian market. Not only did our changes benefit us, but we were pleased to pass on these benefits to our customers. We all agree that, if we keep our prices competitive, our customers will stay competitive as well. This motivates us to continue to maintain a close watch on the markets around us. We appreciate all of the support that we receive year after year from our customers, and we want to do everything we can to support them in return.

We don’t know what changes 2016 will bring, but we will continue to act accordingly to any new factors we encounter. T&P Trucking shares the attitude that true victory comes from cooperation. We enjoy working hard with our customers, and for them, in order to offer the best prices and service, so that we can share in a successful victory together.

Contributors

Sam Pattison

Rob Morris

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