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Wednesday, 15 November 2017
Loblaw launches home delivery, to close 22 stores ahead of ‘difficult year’

Loblaw Cos. Ltd. is taking big steps to compete in an e-commerce world, and warning the changes will come at a cost.

The country's largest supermarket chain said on Wednesday it is launching home delivery of groceries in two major cities and shutting 22 unprofitable stores as it takes on rapidly shifting consumer preferences along with rising labour costs.

Loblaw is teaming up with the U.S. delivery technology startup Instacart to begin fresh food and other grocery shipments to customers beginning Dec. 6 in Toronto, and early next year in Vancouver before it rolls out more broadly. The service will come with premium prices and delivery and service fees.


The store closings and other efforts are aimed at helping Loblaw find ways to shave expenses and gear up for multiple financial pressures that retailers will feel in 2018, including rising consumer demand for e-commerce, higher minimum wages in Ontario and Alberta – and possibly elsewhere – and generic-drug reforms.

"Given all the headwinds, we expect 2018 will be a very difficult year," Loblaw chief executive Galen Weston told a quarterly analyst call, adding later the "headwinds" next year are potentially "more significant than anything that the organization has experienced before."


On the e-commerce front, grocers face Amazon.com Inc., which this year acquired organics grocer Whole Foods Market Inc. for $13.7-billion (U.S.) and is expected to expand its online food-order deliveries, putting heat on incumbent retailers to offer that service.

Canadian grocers have been generally slow to offer extensive home deliveries because of the considerable cost of shipping perishable products, as well as many low-cost, sometimes bulky items to customers' homes.

Loblaw has led the way in the more economic e-commerce model of what it calls "click and collect," in which consumers choose their groceries online and pick up their orders at the stores.

Mr. Weston said Loblaw has had success with click and collect, which he said has been a convenient service for many Canadians and is being expanded in more of its stores, today reaching more than 30 per cent of the country's population.

Still, Kaan Yigit of Solutions Research Group said consumers prefer "no fuss" grocery deliveries over click-and-collect e-commerce.

"I am not sure that you can be a consumer-facing 2017 company and not offer a true mobile contact point and a delivery option, especially in the largest markets," he said.

But, he noted Loblaw and other grocers are still struggling with the economics of home delivery. He said Loblaw's home-delivery service with Instacart is relatively expensive, thus potentially discouraging many consumers from using it.

Even so, Mudit Rawat, founder of Canadian online delivery startup Urbery.com, said customers have to pick up some of the costs of home delivery in return for the added convenience.

His company failed to find a big enough grocer such as Loblaw to partner with to do deliveries, making the economics of the business unworkable, he said. He has now switched to doing online deliveries for consumer-product companies.

He said Loblaw's online delivery service is not for mainstream customers but rather for those ready to pay a premium. "Could it become a big enough business for Loblaw? Probably," he added.

The Instacart delivery fees will range from a low of $3.99 (Canadian) depending on the size of the order and deliver time, to as high as $9.99 for one-hour shipments of an order of less than $35. And there will be an added service fee of 7.5 per cent of the value of the order. Home-delivered grocery prices will be higher than Loblaw's regular prices.


Loblaw hasn't disclosed its home-delivery pricing yet. "This is a financial tradeoff," Mr. Weston said. "There's lots of room to modify the cost structure depending on the consumer appetite for the service. So we will monitor it closely and we will make the necessary adjustments."

He said Loblaw has a road map to reaching profitability in its grocery e-commerce, but he would not disclose how long that would take.

In the debate over pickup-versus-delivery, consultancy McKinsey & Co. has found click-and-collect generates higher profit margins: After variable costs, such as marketing, margins are 13.8 per cent for pickups and just 10.7 per cent for home deliveries. That's in a "best-case scenario" of densely populated areas in Europe, it says in the 2013 report. "The economics of pickup can be substantially more attractive."

Mr. Weston said Loblaw will try to refrain from raising prices to cover burgeoning costs of e-commerce, minimum wages and drug reforms.

Among other moves to rein in costs, Loblaw last month told its largest suppliers it was introducing a "supply-chain handling charge" of 0.79 per cent of the value of their orders starting in 2018, an initiative that has angered many vendors.

Michael Graydon, CEO of the suppliers group Food & Consumer Products of Canada, said Loblaw and the country's major grocers are pushing more costs onto their vendors than merchants in other major trading markets, "further hampering our already-lagging manufacturing competitiveness … "It's time to simply call the increase what it is – a direct transfer of costs from retailer to supplier to ensure [or increase] retailer profitability," Mr. Graydon said.

Loblaw CFO Richard Dufresne said the new supplier fee is just one of many strategies to deal with overall headwinds.

Loblaw has made other recent moves to offset cost pressures, including laying off 500 employees from its office and store-support operations, along with finalizing plans to close 22 stores, most of them by the first quarter of 2018. It expects to record charges of about $135-million, most of which are expected in the fourth quarter, and generate $85-million in annual savings.

In Loblaw's Instacart program, shoppers will order from local Loblaws, Real Canadian Superstore or T&T locations through the Instacart website or app; Instacart will pick, pack and deliver the orders.

Loblaw reported it more than doubled its third-quarter profit to $883-million, or $2.24 a share, from $419-million, or $1.03, a year earlier. Revenue climbed to $14.19-billion from $14.14-billion. The results included a $432-million gain on the sale of the company's gas-station business to Brookfield Business Partners.

Source: Marina Strauss, Globe & Mail 

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Wednesday, 08 November 2017
Brake Safety Day finds 14% brakes out of service

OTTAWA, ON – Enforcement teams completed 7,698 inspections during the Commercial Vehicle Safety Alliance’s Brake Safety Day on September 7, placing 14% of vehicles out of service for brake-related violations.

Of those inspections, 1,337 were completed in Canada, with the rest in the U.S. Twenty-two percent of inspected vehicles were placed out of service when all vehicle violations were considered.

Many jurisdictions also surveyed compliance with anti-lock braking systems (ABS), counting violations when malfunction lamps didn’t work or stayed on – indicating a fault. Of the 5,456 inspected air-braked power units with ABS, 11% had related violations. Trailers fared a little worse, with 14% of the 3,749 trailers showing an ABS violation.

“Brake-related violations are the largest percentage of all out-of-service violations cited during roadside inspections,” said alliance president Capt. Christopher Turner of the Kansas Highway Patrol. “Our goal is to reduce the number of crashes caused by faulty braking systems, by conducting roadside inspections, educating drivers, mechanics, owner-operators and others on the importance of proper brake inspection and maintenance.”

Brake Safety Day is part of alliance’s Operation Air Brake Program in partnership with the Canadian Council of Motor Transport Administrators (CCMTA) and the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA). More than 3.4 million brakes have been inspected since the program’s inception in 1998.


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Tuesday, 07 November 2017
Canada Cartage buys Doyle Transportation

GUELPH, Ont. – Canada Cartage has announced its acquisition of Doyle Transportation.

Doyle provides dedicated fleet outsourcing, full truckload, and less than truckload services to customers, both domestically and cross-border.

The company has a 20,000 sq.-ft. facility in Guelph, which includes four cross-dock doors, warehouse space, and truck maintenance bays. Canada Cartage says it is bringing on all 60 Doyle Transportation employees.

The company said in a release the acquisition strengthens its service in the Kitchener, Waterloo, Cambridge, and Guelph areas while complementing its own southern Ontario terminal and warehouse network.


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Monday, 06 November 2017
Canada Cartage consolidates brands

TORONTO, Ont. — Canada Cartage revealed it is consolidating its branding to better reflect the evolution of the company’s fleet outsourcing and logistics offerings.

Previously, the company operated its warehousing division under the Direct Distribution Centres name, and the managed freight division under the Vanguard Delivers banner. Going forward, these divisions will be consolidated under the new banner of Canada Cartage Logistics Solutions. The firms dedicated fleet transportation services will be marketed under the Canada Cartage Fleet Outsourcing banner.

“The brand consolidation represents a significant milestone for Canada Cartage,” said Jeff Lindsay, president and CEO of Canada Cartage. “Over the past decade, we have transformed from being a purely dedicated fleet supplier to our current position as a national logistics company. The new branding reflects our full range of services including dedicated fleet outsourcing, value-added warehousing services, managed transportation of small package, LTL, and TL freight, and B2C home delivery of large format goods.”

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Monday, 06 November 2017
Class 8 orders surged in October

BLOOMINGTON, Ind. – Preliminary North American Class 8 net orders reached 35,700 units in October, marking a 62% month-over-month increase, according to FTR.

That’s a 167% increase from October 2016.

“Class 8 orders surged in October. The market seems well situated for a strong production environment to persist into 2018,” said Jonathan Starks, chief operating officer of FTR. “FTR has been anticipating a strong 2017 fall order season since early this year. The market continues to follow our expectations and highlights that the market fundamentals remain solid as we approach 2018.”

FTR reported nearly every manufacturer enjoyed a month-over-month increase in orders in October. Class 8 orders over the past 12 months have now totaled 261,500 units.

Preliminary Classes 5-8 net orders totaled 55,700 units, up 65% year-over-year, ACT Research reported. This matched a level not seen since December 2014.

“Seasonally adjusted, orders rose 5.7% from September to 48,900 units,” said Kenny Vieth, president and senior analyst at ACT Research. “For 2017 year to date, orders after seasonal adjustment have been very consistent, ranging from 41,400 units in May to October’s 48,900 unit tally.”

ACT’s total for Class 8 net orders was 36,200 units.

“October’s orders represented a 160% year-over-year jump from a particularly easy, cancellation impacted, year-ago comp,” noted Vieth.

ACT says the strength in Class 8 orders reflects improving freight conditions and rates in 2017, that should lead to a rebound in carrier profitability in 2018.

“October’s preliminary orders clearly put upward pressure on ACT’s expectations for Class 8 demand next year,” said Vieth. “At the same time, we recognize the potential that this year’s NACV show (September) may have pulled-forward the timing of orders that would normally have been placed through the fourth quarter.”


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Friday, 03 November 2017
World’s largest truck stop getting bigger

WALCOTT, IOWA – The world’s largest truck stop is about to get even larger, with a $10 million expansion plan moving forward.

Iowa 80 Truckstop will add 23,000 square feet to its 100,000 square foot main building in a three-phase process.

Phase one includes infrastructure upgrades to drainage, transformers, and a new fiber optic network. The second extends the building to the west toward new gas islands, which were installed last year. This will include the food court shifting to this new area and will incorporate additional food concepts to offer a total of 10 restaurant options.

Also during phase two, the convenience store will be expanded, a semi-tractor and antique trucks will be added to the main entry, and merchandise areas will be upgraded.

“The new entry is going to be really beautiful and welcoming,” said Delia Moon Meier, senior vice-president of Iowa 80 Truckstop.

The final phase will add a boulevard that leads drivers to the diesel islands, truck service center, Truckomat truck wash, and parking areas, which will be reconfigured to pull-in, pull-out spaces for better organized traffic flow.

“We will have an extra wide roadway with curbs, lighting and signage,” said Meier. “There will even be a beautiful new arch welcoming drivers into the truck entrance. We really want this to have a Main Street USA feel.”

The truck stop will remain open during construction with all services and amenities available.

“We know drivers depend on us, so we will do whatever it takes to provide the products and services they need,” said Meier.

The expansion is expected to be complete by the end of 2018.


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Wednesday, 01 November 2017
Human error to blame in recent collisions: OTA
TORONTO, Ont. — After several high-profile commercial vehicle collisions, the Ontario Trucking Association (OTA) says the key to commercial vehicle safety is improving on the human element of truck safety performance:
According to the Ontario Ministry of Transportation (MTO), mechanical fitness is a factor in less than 2% of fatal collisions involving trucks. When examining those same collisions, the driver of the truck was shown to be driving properly 70% of the time.
“This data reflects the elevated level of commitment to road safety by both professional truck drivers and fleet managers, but it also shows that if we are going to improve truck safety in any meaningful sense, the opportunities are related to human factors,” said OTA president Stephen Laskowski.
There are multiple areas where the trucking industry is currently working with research institutes and various government organizations to address human factors related to commercial vehicle safety:
  • OTA and the Ministry of Transportation (MTO) partnered to introduce mandatory entry level training for commercial drivers. Ontario is the only province that requires mandatory training for truck drivers, which provides new entrants practical industry experience, making them safer drivers from the start of their career.
  • The introduction of the speed limiter rule for commercial vehicles in 2008.
  • The recent introduction of the mandatory installation of electronic stability control (ESC).
  • The mandatory introduction of electronic logging devices.
  • In 2016, OTA and the Canadian Trucking Alliance formed a working relationship with the Transportation Research Injury Foundation to examine education, enforcement and technology options to improve factors related to distracted driving.
  • The OTA lead the development of a working group consisting of the OPP, MTO and OTA to examine ways to improve commercial motor vehicle safety, including distracted driving. This group will meet for the first time this month.
Most trucking companies have already introduced company policies to manage driver behavior such as reviewing engine and satellite data to monitor hard braking incidents and developing progressive discipline and education for their drivers. Carriers are also starting to introduce technologies to monitor driver alertness and collision mitigation systems such as forward collision warning systems and automatic braking. Preliminary data shows such technology could eliminate rear end collisions involving commercial motor vehicles by up to 70%.
“There is a reason why since the mid-90’s we have seen a 66% decline in the fatality rate from large truck collisions despite an increase in truck traffic of 75%,” added Laskowski. “Our companies and professional drivers are committed to improving road safety.”
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Monday, 30 October 2017
Shipping conditions will worsen in 2018: FTR

BLOOMINGTON, IN – Fuel cost increases following Hurricanes Harvey and Irma, and increased logistic costs for shippers, caused shipping conditions in the United States full-load market to take a negative turn for the month of August, according to analysts at FTR Intelligence.

Although the increased fuel costs are temporary, the group says it expects the increase in logistics costs to continue into 2018.

Spot prices continue to rise as the labor market tightens, leaving fleets with no excess capacity. This labor pressure isn’t expected to ease anytime soon, FTR said, which will keep shipping conditions down in the new year.

Jonathan Starks, chief operating officer at FTR, said the decrease in available trucks is leaving shippers in a tough position.

“We have known for some time that the trucking industry has been operating with very little excess capacity, however, the weak pricing environment masked that phenomenon for the last year,” he said. “Hurricanes Harvey and Irma exposed shippers to this new reality. There just wasn’t enough excess capacity to deal with spikes, and the result was a significant spot market pricing gain that persisted through early October.”

Starks says spot rates have begun to normalize, but they are still up more than 20% compared to the same time last year. He says contract pricing is also starting to climb, and is likely to continue that trend into 2018.

“When you couple the Hurricane impacts with increased freight demand and the fast approaching ELD implementation, there’s a real fear that loads won’t get delivered,” said Starks.


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Friday, 20 October 2017
Attracting women to trucking is about visibility

MISSISSAUGA, Ont. – If you want to attract women into your fleet, you have to show them they can work for you.

That’s according to Jane Jazwary, CEO of CarriersEdge, who spoke at this year’s Fleet Safety Council conference about gender inequality and promoting diversity in trucking.

Growing up, Jazwary said she wasn’t told she could be an astronaut, or a police officer, or anything she wanted, like her male counterparts were. She was told she had to be pretty and look good. This message was hammered home by media images of women growing up to being nurses and sectaries and nothing else.

And these images are still out there today, Jazwary said. So if trucking wants to attract women, they need to put images out there that show women can be drivers.

“We need to show women doing other things,” she said, noting Challenger Motor Freight does a great job of this, and has a good ratio of men to women in its fleet.
Challenger actually puts women in its ads, to show women they can do the job, Jazwary said.

“Other fleets just put trucks in their ads,” she said. “But Challenger puts people. And women so they can see they can do the job.”

Prime Inc. is also making its female drivers visible, Jazwary said. Prime has a program called Highway Diamonds. The group is comprised of Prime’s female drivers who go out and educate others on the upside of truck driving as a career.

“They have doubled the number of women drivers in their fleet because of this program,” Jazwary said. “Because women are visible and they represent the fleet.”

Jazwary added that another way to attract women into the trucking industry, is to address the elephant in the room – harassment – which she says happens everywhere. Jazwary said to implement a policy for harassment and know how you’re going to deal with these claims before they happen.

“If you want women drivers, you must think about harassment,” she said. “You don’t want to think that it happens, but it does. It happens everywhere all over the world. So if you’re not thinking about what to do, you’re failing your drivers.”

She warns about just having an “open door” policy that is up for interpretation by most.

“If you want women in this industry, ask for it,” she said. “Show them they can do it. Show them doing the job in your advertisements. At truck shows, have your women drivers attend to represent your company.”


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Wednesday, 18 October 2017
‘Real reciprocity’ is what Canadian trucking execs want from NAFTA talks

MISSISSAUGA, Ont. – Reciprocity is what most are looking for on this side of the U.S.-Canada border when it comes to NAFTA discussions.

That’s according to some of the trucking industry’s most prominent players who gathered at special Canada-based Truckload Carriers’ Association (TCA) event called ‘Bridging Border Barriers.’ to talk about their opinions on the NAFTA negotiations and what they believe the ideal outcome would be.

“These are difficult times,” said David Bradley, president of the Canadian Trucking Alliance (CTA). “What we’re looking for in NAFTA is things that would improve the efficiency and the productivity of trade across the Canada-U.S. border. So. things like enshrining the current in-transit pilot, and making it an actual program. Because a pilot can be taken away quite easily.”

Bradley also said it would be nice if borders were properly resourced.

“We are also looking for…making sure that we have real reciprocity when it comes to the security programs, many of which have been introduced in the last couple of years. For example, making sure you only have to apply for a FAST card in one country and it’s recognized in the other…those sorts of things,” Bradley said. “Do I think that NAFTA is going to deal with these issues? I think it’s difficult, because they’re not top of mind/front page type of things. But what I’m hoping is, at least in NAFTA we will establish some new processes for dealing with these sorts of issues that make an agreement work better.”

Ultimately though, Bradley said he hopes these NAFTA negotiations result in anything but the agreement dissolving entirely.

“If we can maintain the agreement that we’ve got now, that would be better than the alternative, which is to get rid of it,” he said.

According to John Lybolt, the TCA president, the association wants free trade and wants NAFTA to continue.

“The bottom line is we want free trade,” Lybolt said of the TCA. “Since 1993, when NAFTA was first brought into play, we’ve realized a gain in freight movement and profit…so the true success of the trade agreement according to the TCA, is making certain we have harmonization within the trade agreement…The transportation of goods internationally is in all of our best interests.”

On the carrier side, Geoff Topping, v.p. of human resources at Challenger Motor Freight says that his hope is that with an already thick border to get through, that these negotiations don’t confuse things at the border even more.

“We need the border to be a faster, more efficient process for the driver, for the carrier, and ultimately for the exporter or importer,” he said. “There’s too many delays…and in order to have good trade amongst our countries we need that border to run smooth.”

Echoing Topping’s remarks, Bison Transport president Rob Penner said: “We want as few transactions at the border as possible…The equipment’s pre-cleared, the driver’s pre-cleared, we don’t understand how these shipments need to be physically cleared at the border any more.”

Wendell Erb, president of Erb Group of Companies, said he is also hoping for some reciprocity to help ease the painful process of going through the border as well.

“As truckers, we are punching bags for whatever regulations come down the line,” he said. “Honestly I think there’s a completely lack of trust and you see what we go through for inspections, and when it’s crossing the border, it’s the same inspection. You would think there could be some reciprocity, where what’s good in Canada is good for the U.S.”

Bradley said an added bonus of  these NAFTA trade talks is that they could provide an opportunity for Ottawa to start talking about the second crossing at the Windsor/Detroit border again.

“The completion date is 2022, but we haven’t seen a shovel in the ground yet,” he said. “One has to think if NAFTA is terminated, it raises the question as to will we need that bridge? Having said that, the Ambassador Bridge is falling down…they need to build a new stand on that bridge. I’ve always said, it’s not either/or, we need whatever capacity we can get…because if NAFTA is terminated one would think down the road, we would hope to see a normal trade relationship again and then we’d need that bridge.”


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