Canoe

Wednesday, September 13, 2000

Bleak winter predicted for truckers Amid rising fuel prices By JAMES STEVENSON-- The Canadian Press

TORONTO (CP) -- Canadian truckers face a bleak winter this year with fuel prices already spiralling higher than last spring and rumblings of renewed protests over dwindling profits.

"I think that the outlook is rather grim," said David Bradley, chief executive of the Canadian Trucking Alliance.

Fuel prices, which have risen about 40 per cent over the summer months, will likely continue upwards over the next several months, said Bradley, whose group represents about 3,500 trucking companies.

"So when the cool temperatures re-emerge as they inevitably will, we suspect we could see the return to the kind of pressures diesel was under earlier this year."

Dave Sirgey, with the Freight Carriers Association of Canada, says the high fuel prices are particularly daunting at this time of year.

"Historically, September is kind of a low month," he said, after the summer driving season and before the cold weather.

"Once the demand starts kicking in for the heating fuel as well in Canada and especially the northeast U.S. I don't know, it's kind of scary actually," said Sirgey.

Sky-high world prices for crude oil have pushed up the costs for refined gasoline as well as diesel and heating oil in North America while causing serious shortages throughout Europe.

In England, gas shortages were reaching critical levels Wednesday as bank machines began running out of money, hospitals cancelled non-emergency surgery and supermarkets rationed essentials like bread and milk as shoppers stockpiled the bare necessities.

Truckers in central and eastern Canada held several large-scale protests in February -- including shutting down the Trans-Canada highway between New Brunswick and Nova Scotia for two days -- to draw attention to rising fuel costs that were eating into take-home pay.

Bradley said rumours abound of truckers returning to the protests, and said discussions involving individual truckers, suppliers and governments are needed quickly to avoid any problems.

Ottawa has offered to review cuts in fuel taxes if the provinces would also take part, but so far there are no concrete proposals on the table.

"It's frustrating to see the apparent lack of recognition of the economic impact that this could have," said Bradley.

Higher fuel prices makes it harder for individual truck owner-operators to earn a living, creating a shortage of truck drivers.

This in turn puts added stress on Canada's supply network, boosting shipping costs for just about everything. About 90 per cent of Canada's consumer products and foodstuffs are hauled by trucks.

But while higher fuel costs threaten to boost inflation rates, Sheryl King, an economist with the Toronto Dominion Bank says it's important to keep things in perspective.

"We're not talking about 1970's energy crisis-type levels at this point yet, we're probably still about 30 per cent below that."

King also said the super-charged North American economy can absorb some rising transportation costs. Pre-tax corporate profits in Canada last year were 23 per cent and are forecast to go even higher this year.

"It can't go on forever, obviously, but right now people are going to hope that this is going to come off pretty soon and not have to adjust their prices."

-- Rachel Gibson (rgibson@hotmail.com), September 14, 2000