The Iran conflict is pushing up diesel

0:00America leads the world in medicine development. It matters. We get new medicines first nearly three years faster. Five million Americans go to work because we make medicines here at home and not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them or will we choose to stay ahead? When America leads, America cures. Let's tell Washington to keep us in the lead. Learn how at americacures.com. Pay for by Farma. The war in Iran is sending shockwaves through global energy markets and that's starting to show up in the cost of transportation. Now with shipping, disrupting, disrupted in the straight of our moves, a route that normally carries about 20 percent of the world's oil supply, fuel prices are climbing. Airlines are already warning that higher jet fuel costs could eventually push up airfares. But the impact was much further than air travel. Take a listen to Dan McTeig, who joined us during the three o'clock hour. He's the president of the Canadians for affordable energy and he talked about gas prices and even diesel prices and what impact this will all have

1:03starting tomorrow. Take a listen. It's really important people understand that tomorrow, Thursday, gas will drop a net seven cents a liter and diesel will fall about 11 cents a liter. So tomorrow's the day. Why? Because I can already see ahead on Friday where gas will be up five cents a liter. It looks like diesel is going back up eight to 10 cents a liter. So there you go. The volatility is there diesel. The fuel that powers trucks is also rising as Dan said and that matters because trucks move more than 90 percent of the goods that keep British Columbia's economy running. Joining us now to talk a little bit about this issue is Dave Roe, president and CEO of the BC Trucking Association. Dave, good to see you. Good to see you as well. Give me a sense of what you're hearing from truck drivers, the industry itself in regards to this particular moment. Well, I mean, everybody is struggling with the same issue jazz, his increasing prices. Diesel has been markedly higher than gasoline for many, many months for a whole bunch of reasons and it like gasoline has really escalated in the past, you know, 11 to 12 days

2:04with the continued volatility in sight. It's just greater cost for everybody involved in transportation. Yeah, Dan was saying to me earlier that even for gasoline, he easily, you know, it's going to hit potentially $2 a liter for sure. It's only 10 cents away. But could go even higher than that based on what's happening. Walk me through just the broader issue of the industry itself and its reliance on diesel and what can be done in any way in regards to supply chain in regards to choke points. What can help the industry at this particular point? Well, it's interesting. In terms of the broader, you know, what does this mean to you and me? About a third of operating costs in British Columbia for trucks is related to fuel. So if you see an increase of about a third on that, then that that kind of starts to tell you where things are going. Goods that are sensitive to price increases are not high value goods. So if you think about, you know, if a bill running something, you know, goes from $5,000 to $6,000, if the loads worth a million dollars, next to

3:08a hundred million, extra thousand cents, big deal. If it's produce, where it's worth 30 or $40,000, it is a significant, a more significant impact. But even when you break it all down, Jazz, what we're talking about is a 30% rise in fuel prices might equate to a five cent rise on your head all that is. So it's not this massive increase, but it's everywhere. It's everything. And that's when you and I start to feel the pain. So, you know, what can be done, you know, really what we're talking about is efficiency is really what we're talking about is removing congestions. And, you know, it's the same conversations we've been having forever infrastructure investment. You know, having people sit in lines for hours at a time, it costs money. And ultimately, you and I pay. And until we make those changes, this is where we dance. At what point do those costs get passed on? I mean, I'm sure some of it is absorbed by these by these companies or no. Not a dime. What happens, Jazz, is this gets built into ongoing contracts. We have fuel surcharges, fuel reference points. And so those get altered based on the contractual language, or they move in the spot

4:12market. So literally, there are drivers sitting there, an operator sitting there right now looking at load boards. And they're being bid on, you know, and so how much are you going to be paid per mile to move the goods? It's very, very quick. It's incredibly responsive. The day after tolls went off the port man bridge here. Our members were removed the tolls from their billing, both because they had to be transparent, but more than that, their customers demanded it. So it goes up and it goes down very quickly. So those boards that you're talking about, they change every single day then? Every moment. Oh, every moment. Yeah, literally. I mean, like you're looking at bidding, and so someone will have a load trying to move, you know, from Calgary to Winnipeg and whatever it may be. And those boards will be there, and it will be bid on. And if they can't get it to move at one price, they'll try another So in New York, it's a sensitivity to fuel price increases. Food is the one that's most sensitive anyway. Absolutely. The lower the value of the commodity being moved and foods pretty heavy,

5:17you're moving it in refrigerated units a lot of the time, particularly, you know, fresh produce. It's expensive to move because on a per unit value because it's relatively heavy and relatively cheap. Again, $1,000 extra on a load of electronics that's worth $10 million. That's not going to show up necessarily in the bottom line. You're sure going to notice it on apples. Would if we had our own energy infrastructure in this country, more refineries, more pipelines, would that help the industry? It's a good question, Jazz, and I don't know that we can really answer that because it's more the old that that what if would we be insulated from the shocks of world value, of world price changes? Hmm. I don't think so. You know, it would be helpful in that we would be able to leverage it from an economic development standpoint and from a wealth generation standpoint. To me, that's a really important conversation that we're not having enough of. Would it help our members? I suspect our prices would still rise. Does your industry get undue blame for these costs?

6:17Oh, absolutely. You hear it from the cost? Absolutely. What'll happen now, but it's interesting. I say undue blame. You and I will go to and we saw this in other circumstances, be it the floods, be it the pandemic, whatever it may be, and you saw things talking about price rises, and there's a grain of truth to that. Everything gets more expensive when fuel gets more expensive. But I talked about five cents on a head of lettuce. Well, if you're seeing 25 cents on a head of lettuce, it's not just trucking. Now, it can be a whole bunch of other things related to fuel costs. If we're talking about production, we're talking about what stuff being used in the fields, we're talking about fertilizer. All of these things get built in, but it's not just that last mile. Wow. In regards to the trucking industry itself, how would you describe its efficiency at this moment? You have a generational change. You're seeing more younger drivers. How would you describe just sort of the transition that's occurring right now? It's a really interesting time. So you talk about transition in terms of drivers. We also talk about transitions and use of technology. We've moved away from manual logbooks to electronic logging devices, mostly as a compliance tool.

7:23But it's really allowing for some interesting learnings. What's really driving efficiency is advanced telematics. What is that? We have members. If listeners are familiar with watching any of this, any of the racing movies, shows, whatever it may be, that level of telematics you see on F1 cars exists on a lot of trucks right now. We're talking real-time RPM throttle position, steering angles, gear selection, fuel consumption available in real-time 24-7365 anywhere in North America. We have geofence speed limiting where a driver may be going into a corner too quickly, and it'll ping an alert to their dispatch or their safety and compliance manager to flag it for that driver to say, hey, you're driving too quickly. There are some companies that have the ability to throttle back and simply say, remotely, limit the speed and the vehicle to make sure that the driver isn't speeding in real-time. It's amazing. The efficiencies are we learn exactly

8:26where and when and how, where acceleration works, where it doesn't. Predictive cruise. There's a whole bunch of technologies that are all incremental. But, as they're incremental, they save fuel, which saves money, which improves profit, and it reduces GHG emissions. It's a win, man. It's a win. I get that. And in regards to, you're talking about the technology here, are you still have, do you have challenges of attracting people into the business? Because I keep hearing about lots of older truckers retiring. How much of a challenge is retention at this moment? It's a really interesting time because what we saw with this long-term, chronic driver shortage, all that went away. A couple of years ago, we had these waves of people entering the industry and carrier sitting up, particularly after COVID. And when we've seen the pullback in freight volumes, when you and I no longer were buying things, when we could actually go back to do things, we saw this massive capacity in the system. That's what we're seeing back now is a pullback.

9:27I haven't had a call from a member in two years, unable to hire an experienced driver. I suspect that's going to change by middle of next year because of retirements. We're going to be back into a situation where we're waiting in it. We don't have enough people to do what we need to do. So we've got to see what immigration to them, which we slow down. Absolutely. So we've got a period of time to do it right. And we're doing some really good work with the federal government redesigning programs specifically for our industry to address the issues that were there. So I'm optimistic we'll have it and ready to go when not if, but when we come back around. I did want to chat with you about another topic here, Dave. And we just heard about this recently. The province is now installing an over height detection system with sensors and flashing warning beacons to alert drivers before they reach the overpass. In this case, specifically, it's a number three road overpass in Chilliwack, which has been struck six times since 2021. From a trucking industry's perspective, I mean, do you support that? It's the right thing to do.

10:30Jazz, it's the right thing to do, but I cannot tell you how frustrated our members and I am dealing with this. That overpass has been there a long time. It's not lower. And no folks, it's not settling and no, it's not that the highway is getting higher and no, it's none of that. It is a problem that we have inside the industry and people just not doing what needs to be done. So yumps an important step. I think it's important also to remember a few things. We're down about 60 percent from the peak of how much was going on, which is great, but that's still 40 percent too much. The other part of it is, this is a worldwide problem. There's 15,000 overpass strikes a year in the United States. Australia has some really interesting technology. They actually use water curtains and projectors. They will drop water in front of a truck approaching an overpass with a big stop sign on it. I'm trying to stop this happening everywhere we go. So it's usually 15,000 in the United States. Overpass it's in the United States every year. Every year. You know, it's

11:30amazing. So I mean, this is a problem everywhere we go and it's just not paying attention to what we need to pay attention to. And I guess here in Metro Vancouver, we haven't had something like this happen in such a short period of time. I know we've had overpass it before, but over the last three or four years, the numbers are just crazy. Oh, it just went off the charts. I mean, we started seeing it all the time and then now it seems to have abated, but it's still happening and it happens in the interior and it happens in other locations. And it is again that sign of people just not thinking about what they need to be doing on that day. So do you think the rules and regulations that are there right now, the government's brought in to rectify this to chat, to hopefully change the mindset? Is that enough? Or do you think we need to do more? You know, it's a really good step, but I mean, this talks about compliance over all. What do we need to do in the, you know, the culture of noncompliance? I mean, one of the things that what we talk to government about is being creative and thinking differently, fines are one thing. Seizing equipment is another. You know, we're not

12:32talking about mistakes. Mistakes happen. We're talking about deliberate, willful noncompliance. Well, if you're deliberately and willfully ignoring the law, why should you have anything to be able to operate and continue to do that? So ongoing conversation. So in your mind, you'd be supportive of the industry being supportive of those players, who as I say, it's not an accident. Those happen, but they are willfully ignoring safety concerns issues, not meeting the minimum requirement. If they do this repeatedly, it starts easing their equipment. Absolutely. You'd be supportive of that. Yeah, absolutely. In regards to, well, we've got another minute or so left. In regards to this particular challenge day when it comes to energy, what do you think the next two or three or four months are going to look like? Because I've been hearing like if this even prolongs for another month or two, we're in a lot of trouble globally in regards to inflation, in regards to energy costs, in regards to just pricing of everything, especially your industry. How do you see it? Yeah, it's going to be, I mean, again, Jazz, I'm tired of saying, we're in interesting times or I'm anticipated or unprecedented. But here we go again.

13:37We're in space that we haven't seen before. We don't know what's going to happen. We have senses and we have ideas, but we've never seen this. We never crossed this Rubicon. So what does it mean? I don't know. Is it going to be with a bumps? Absolutely not. Are we going to get through it without a doubt? Yeah, but it is probably, I mean, if it is for a long, there is impact. Absolutely. 100%. Yeah, Dave, we're always good to see you. Thank you so much. Thanks, thanks for having me. Rinse knows that greatness takes time, but so does laundry. So rinse will take your laundry and hand-deliver it to your door, expertly cleaned. And you can take the time pursuing your passions. Time one spent sorting and waiting, folding and queuing, now spent challenging and innovating and pushing your way to greatness. So pick up the Irish flute or those calligraphy pens or that daunting beef Wellington recipe card and leave the laundry to us. Rinse, it's time to be great.