After the acts of terrorism in the U.S. on September 11, 2001, customs officials became more vigilant at all U.S.—Canada border crossing points.

In the 2 weeks following  the attacks, carriers faced border delays of up to 24 hours.  The cost of these delays were above what the industry could absorb without passing at least a portion of it back to the customers.  In many cases carriers did not have rules in their tariffs specifically addressing this issue.

NATC/FCA conducted a carrier survey regarding this issue and found that all carriers agreed that they could not absorb this type of cost increase.

Problems in dealing with the border delays were the lack of information regarding normal border crossing times and the lack of a mechanism in place to recoup the cost increases.

The General Rate Committee (GRC) discussed the following carrier docket at its October 2001 meeting.

Docket 1007X-Implement a surcharge or accessorial charge to recoup a portion of the dramatic cost increases carriers are incurring in crossing the U.S.-Canada border.

Proponents Justification-In view of the acts of terrorism in the U.S. on September 11, 2001, customs officials are being more vigilant at all U.S.-Canada ports of entry.  This is causing significant increases in the cost of handling U.S.-Canada freight due to delays at the border.

The GRC deferred the docket and instructed the staff to conduct a survey that would provide the Committee with additional information on border crossing times and average costs of waiting at the border.  This information could be used to develop a baseline if future border delays occur.  It would then be possible to use the information developed by Canada Customs to develop appropriate charges based on the increased time at the border if a crisis occurs.

All carriers completing this survey will receive the aggregate results.

All individual carrier information will be held strictly confidential.  We need more study participants in order to develop meaningful information.  If you have this study on the back burner, please move it to the front.

Please contact Dave Sirgey at (800) 559-7421 ext. 214 with any questions or if you need a copy of the survey (it is an excel file).

By:  Dave Sirgey

The results of the latest Marketplace Survey, conducted in December 2001 and January 2002  are now available.

Some of the results of the  survey  are as follows:

September—November 2001 v. 2000 (average results):

Canadian Domestic LTL Revenue - up 0% to 4%
US—Canada LTL Revenue - down 4% to 7%
Canadian Domestic TL Revenue - down 1% to 6%
US-Canada TL Revenue - down 1% to 6%

Did the events of September 11, 2001 have a significant impact on rate levels?

• 76% of respondents replied either limited or no impact on rate levels.

• 55% of respondents said no.

Insurance Premiums 2001 v. 2000

• Average increase was 31% with the high of 100%
• Average increase in deductible was $15,000.

Current Capacity = Too Much Capacity

• Tractors—24% of respondents
• Trailers—19% of respondents
• Drivers—14% of respondents

If you would like to participate in future surveys please contact Julie Gauthier at (800) 559-741 ext. 218.

By:  Dave Sirgey

In short the answer is NO.  The fuel surcharge program is doing exactly what it was designed to do.  The fuel surcharge has dropped to reflect the drop in fuel prices.

Since the inception of the fuel surcharge program the cost of fuel has been excluded from the calculation of general rate increase percentages.

If the price of fuel was stable the current percentages of 1.7% - TL and 3.9% - TL, could be rolled into the rates to equitably end the program.  But the price of fuel is not stable and what would you do next week or next month when the price changes in either direction.

The fuel surcharge program is working by properly reflecting changes in fuel prices with changes in the surcharge percentage.  It is not time to try to fix something that isn’t broken.

By:  Dave Sirgey

Dave Sirgey made a presentation to The Consumers Goods Logistics Group, Inc. (CONLOG) at their March 1, 2002 board meeting.

The presentation covered the history of Fuel surcharges, the methodology, and the current fuel surcharge program.

In his presentation, Mr. Sirgey pointed out that the only equitable end to a fuel surcharge program was to either roll the surcharge into the rate level (if the price is deemed to be stable) or to wait until the price returns to the base price level.

If you would like a copy of Mr. Sirgey’s PowerPoint presentation please contact Dave at (905) 994-7421 ext 214. or email him at dsirgey@natc.com.

FCA/NATC staff recently reviewed over 120 Canadian trucking companies.  It was found that 30 or 25% of the companies do not have a site available (27% had no site available in the May/01 review).

There was an improvement in the appearance of many sites.  Also, I found the site map and search functions quite useful.  The site map makes it easy to find exactly what you are looking for.

The frequency with which specific functions were offered is as follows:
 

It was also noted in our review that some of our member carriers do not have websites or do not link their sites to FCA/NATC’s site.  For member carriers without websites we set up, free of charge, a company profile page that will list contacts and information about your company.

If you would like us to develop this page for you, or if you would liked to be linked to our website, please contact Mary Anne Vehrs at ext. 212.  If you would like a more detailed breakdown of out website analysis, please let us know we will be delighted to provide the details of the review.

By:  Ken Leising

We are in the process of planning this years’ users group meeting.  Last years’ meeting which was held in Toronto on April 24th was very successful.

We would like to determine if there is still a need to cover basics in addition to more involved uses of the software.

If you have any items you would like placed on the agenda or if you have any suggestions to improve the format of the meeting, please contact Ken Leising at (800) 559-7421 ext. 203.
 

By:  Ken Leising

It has been known for some time that many of the rates published by FCA for western Canada points served by non-member western carriers provide inadequate revenue.  This is primarily due to the non-member western carrier being paid a set FAK rate that has not been factored into the published FCA through rate.

This issue is becoming more of a problem as the use of FCA through rates continues to grow.  Each year FCA licenses rates to more and more North American Shippers and 3PLS who are looking for Canadian class rates to incorporate into their systems that they already utilize for U.S. and Canada/U.S. traffic.  These shippers then expect carriers to provide simple discount quotes from the FCA rates.

A member carrier has asked that we explore options to make these rates more palatable for carriers.  We can of course reconstruct the rates to better reflect the Western carriers’ local rates. For example, Toronto to Flin Flon, MB could be recalculated to reflect the Toronto to Winnipeg rates in Tariff FCA 501 plus the average Winnipeg to Flin Flon rates.

However if the western carrier continues to receive his set FAK rate for his portion of the move, how can the through tariff rates be discounted?  Programs could be developed to discount only the major point portion of the move (i.e. Toronto – Winnipeg), but that would make the through rates difficult to sell to shippers looking for straight forward discount numbers from the through class rates.

We will be surveying carriers in the near future to determine if a restructure of these rates should be undertaken, and if so what methodology can be used to provide adequate through rates that can be discounted.  Please contact Ken Leising with any comments or suggestions you may have on this matter.

By:  Dave Sirgey

FCA’s Non-Labour Index which represents the basket of goods purchased by a Canadian LTL trucking company dropped dramatically following the events of September 11, 2001.  From September 2001 to November 2001 the index fell 1.5%

The portion of the index that dropped most dramatically were traveler accommodations (-20%) and operation of automobiles (-7%).  The index increased slightly for December 2001 v. November 2001.

The latest Non-Labour index figures can be found on the FCA/NATC website at http://www.fca-natc.org.

A-P-A Transport of North Bergen, NJ closed its doors in mid February.  A-P-A had been a member of North American Transportation Council since 1980.

Douglas Dick, Director of Pricing & Traffic for A-P-A was a past president on the NATC Board of Directors and had served on the Board since 1988.

We wish the best of luck to Doug and all of the A-P-A employees and we thank them for their past support and friendship.

When carriers suspend credit privileges on delinquent accounts, the customer often attempt to obtain services from a competing carrier.  Since the account is not at that time considered “uncollectible” it is not reported to any credit bureau or collection agency.

Therefore the carrier who accepts to do business with that account has no means of assessing the risk of doing business with that customer.

The “Credit Alert” program has been operating successfully since June of 1994.  Weekly, program participants provide FCA/NATC with a list containing the name, address and date of revocation for all customers whose credit privileges were suspended during the prior period.  This information is then consolidated with lists from other carriers and forwarded to all program participants.

During times of recession it is very important for all companies to utilize all the tools available to protect themselves from monetary losses.  The cost to join this program is under $20 per month.

For further information contact Mary Anne Vehrs at (800) 559-7421 ext. 212.

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