There has been a lot of movement in the trucking industry in North America. It is important to remember that trucking interests exist from Canada down through Mexico. And in our latest trucking update, we wanted to shift our vision to our neighbors to the north. There has ben a lot happening in the Canadian trucking industry.
Although they are still knee deep in winter, the Canadian government has been hard at work working on their own version of the electronic logging device mandate. What can U.S. trucking companies expect once the Canadian version of an ELD mandate goes into effect? Let’s take a deeper look.
Canada’s ELD Mandate
Just as it was on our minds two years ago, the ELD mandate is now on the minds of Canadian trucking companies. Check out this statement, released by Canadian Transport Minister Omar Alghabra on March 2:
“The impact of Covid-19 on commercial vehicle operations has been unprecedented and must be acknowledged. As such, with the support of provinces and territories, and in consultation with industry, we will work together on the successful and effective implementation of a progressive enforcement period. This will give sufficient time for industry to obtain and install certified electronic logging devices without penalty as of June 12, 2021. Early enforcement measures will consist of education and awareness.”
So, there you have it folks. Canadian truck drivers now have until June 12, 2021 to adopt ELD devices. Trucking advocacy groups within Canada had already been advocating heavily for a phased-in enforcement timetable. There are also other problems, such as a lack of certified devices from which Canadian trucking companies can choose from.
Individual Canadian provinces will be responsible for enforcement, but they may not be ready to carry out enforcement measures even by the June 12th deadline. The problem lies in the way the Canadian system of government works. Mandates like these do not have any enforcement mechanism until the provinces certify them within their own provincial regulatory environment.
The provinces aren’t unprepared because of opposition to the rule. Indeed, provincial governments have supported it as it worked its way through the Canadian parliament. Delays stem from different political priorities and other legislative timetables that don’t necessarily align with June 12.
The ELD Market in Canada
While there are several ELD suppliers ready to step into the Canadian markets, the problem lies with the government certification process. While one Quebec-based third-party tester has been approved by the Canadian government to begin certifying ELDs for Canadian trucking companies, their operation is not yet at full capacity.
ELD heavyweights like Omnitracs and MiX Telematics have already signaled their entry into the Canadian market. Omnitracs specifically put out a statement saying that they would release devices into the market with the intent of making them compliant “over the air” through future updates.
Compounding this murky picture is the fact that Canadian law enforcement has not yet been trained on enforcing a Canadian ELD mandate. The systems needed are not yet in place on provincial or federal level.
Canadian ELD Certification Process
It is important to note that the ELD certification process in Canada is not free, and in many ways is more onerous than the certification process in the United States. Canadian ELD providers will be on the hook for around $50,000 to get each ELD device used in the Canadian market certified by a third-party company. ELD devices will also have to be recertified annually, which is estimated to cost as much as $25,000, depending on the model.
When going through the certification process, the ELD provider must provide a full accounting of not just the device, but also the reporting processes. This encompasses the ELD itself, any accessories or devices it communicates with, such as tablets or smartphones, any apps it works through, and any corresponding back-office process.
As a result of a much more thorough and expensive Canadian certification process, many U.S.-based ELD suppliers will not be able to enter the Canadian market, which will create a squeeze in the marketplace. Perhaps as many as 15% of the ELD suppliers operating in the United States will bother even certifying their products for the Canadian market. By some estimates, on June 12 Canadian trucking companies may have anywhere from 25 to 50 ELDs available on the market.
Autonomous Truck Testing
Canadian governments and private companies have also been experimenting with autonomous trucking. As the U.S. market continues to wade deeper into autonomous trucking, Canadian operators and regulators have begun to dip their toe in. Here at the QuickTSI blog, we have been discussing the topic for some time, asking as far back as 2019 if disruption in the trucking industry from autonomous technologies.
This can be seen in the March 11 announcement that Canadian Tire Corporation was partnering with Toronto-based NuPort Robotics Inc. and the Ontario government on beginning a foundational autonomous trucking test within the province. The project is designed to run for two years and will see NuPort outfit its technology onto conventional Class 8 commercial motor vehicles.
The autonomous tests will be carefully monitored by Canadian regulatory bodies and a safety driver will be always in the cab of the truck. Currently, machines outfitted with these technologies are transporting freight between a Canadian Tire distribution center in Toronto and nearby terminals within a 20-kilometer radius.
Canadian authorities and their private partners in this program are focusing specifically on the middle-mile market. This is largely because the routes driven by trucking companies that operate in this space are predictable. As opposed to highway driving, urban middle mile routes are much more compatible with autonomous technologies.
Who Stands to Benefit?
Canadian Tire specifically stands to gain from faster product deployments and greater efficiencies within its supply chain. Over $3 million has already been invested in the project, with $1 million coming from the Ontario government, which has already set up an Autonomous Vehicle Innovation Network, or AVIN for short.
Although AVIN was set up by the Ontario government, it has already put its investments in other startups, such as Gatik, a California-based company focusing on middle mile autonomous technologies. The Gatik deal, which saw that company receive a $1 million grant from AVIN, is designed to help Ontario winterize current autonomous driving technologies.
The partnership with Gatik was likely a direct result from Gatik’s partnership with Loblaw, Canada’s largest grocery retailer. That partnership has seen autonomous box trucks on fixed routes delivering products in the greater Toronto area. So far, these initial tests have gone off without a hitch.
Still, don’t expect to see autonomous trucks driving en masse on Canadian roads and highways. Just as this technology is still in its infancy in the U.S., there is still a lot to be done, on both the regulatory and infrastructure fronts, before widescale autonomous adoption is expected in Canada.
The Truck Driver Squeeze in Canada
All of this comes amidst a backdrop of a truck driver squeeze in Canada. The United States has been stuck in the throes of a truck driver employment squeeze for a long time, and now Canada is feeling some of that pain. Just look at job listings. Canada currently has over 3,000 trucking jobs open and waiting to be filled right now.
According to data provided by Trucking HR Canada, Canada will be in the hole by around 25,000 truck drivers by 2023, which in the grand scheme of things is not very long. And this continues a trend, because in 2019, 61% of all trucking jobs in Canada went unfilled. By 2023 that number is expected to jump to 25%.
Fortunately, immigration might help Canada close the gap. Despite COVID-19 restrictions, Canada is expected to bring in over a million newcomers by the end of next year. The Canadian government has continued to accept and process visa applications, mainly at the behest of the business lobby, where there are massive deficits between the number of people available to apply for all the open jobs in the country.
Pay and benefits for Canadian trucking companies are comparable to the pay rates of their southern peers. Still, don’t expect immigration to fix the trucking employment squeeze in Canada any time soon. The problem is far too entrenched to be rectified in a year or two. And with the Canadian ELD mandate coming into effect, no one knows how that will impact recruiting. Overall, the health in the Canadian trucking market is good for everyone in North America.