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Bedard warns against adding capacity

Posted: May 4, 2018 by Steve Bouchard

Alain Bedard, CEO of TFI International

LA MALBAIE, Que. – Alain Bedard, chief executive officer of TFI International, is emphasizing the value of a stable workforce — and warning carriers to avoid the temptation of adding capacity at a time when the demand for transportation is exceptionally strong.

“It’s appalling to see what’s going on, particularly in the United States, in terms of staff turnover,” he said in a rare appearance before the Quebec Trucking Association (QTA), during the group’s annual meeting. “I always say to my people: it’s nice to recruit, but the most important thing is to keep the drivers that we already have. We spend money to recruit, but what are we doing to keep them?”

As his father told him, the secret to running a business is understanding the concerns of people who work there.

“In full loads (truckloads), the driver is paid according to the number of miles traveled. It is obvious that, if there is no stability in the number of miles, it creates instability in the salary.”

Spending six hours in a customer’s yard, or stuck in Montreal congestion, create instability as well, he added.

With the economy running at full speed, the leader of Canada’s largest fleet also questioned the strategies of those buying new rolling stock to increase capacity.

“It’s the worst thing to do! In addition, there are no drivers, so why buy trucks?” he said. “Who’s crazy enough to add supply for a few months with something that lasts five years?”

Adding capacity also stands in the way of market forces that would increase prices.

“When there is a shortage in the oil industry, what happens to the price of oil?” he asked. “We have to focus on the return on investment. The concept of return of investment must be part of the everyday life of a company. Adding capacity is not the answer.”

Still, TFI International has found success by realizing the emerging opportunities linked to e-commerce. He recalled that his business entered the so-called final mile by chance when acquiring Dynamex in 2011. “We were lucky. We took part in e-commerce without knowing the revolution it would become. For us, the delivery of the last mile has been fantastic, “he says.

“E-commerce is changing, especially with the younger generation. Brick-and-mortar companies suffer, municipalities suffer the consequences, but nothing can be done against it. Let’s go. TFI International has a turnover of around $ 400 million in the e-commerce sector. About 42% of its activities are B2C.”

Looking to the future, Bedard believes autonomous vehicles will eliminate some of the challenges relating to a driver shortage. He just doesn’t know when that will happen.

“If you look at who is competing with banks today, it’s Apple Pay and other payment systems of its kind. There will be other major changes in the industry,” he warned. “You have to be flexible and be able to adapt to it.”

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