Good evening, Mr. Chairman and subcommittee members.
My name is Ron Lennox. I'm a vice-president with the Canadian Trucking Alliance, a federation of Canada's provincial trucking associations representing some 4,500 carriers and trucking industry suppliers nationwide. CTA is a member of the Canadian Supply Chain Food Safety Coalition, who appeared before you earlier this evening. With me is John Gyoroky, corporate dock manager and HACCP coordinator with Erb Transport. Erb is a family owned carrier based in New Hamburg, Ontario, specializing in refrigerated transportation, operating a fleet of 1,000 refrigerated trailers, 500 tractors, 150 straight trucks, and employing some 1,200 people and 140 owner-operators.
Erb was the 2008 recipient of Canadian Transportation & Logistics magazine's Shippers Choice Award, as well as the Premier Carrier Award from food giant Sysco Corporation. Erb Transport was also one of the first carriers in Canada to implement CTA's HACCP-based trucking food safety program, which I will speak to in a moment.
I had the pleasure last week of speaking before the full agriculture committee as part of its study on the competitiveness of the Canadian agrifood industry. During my remarks, I made the point that you can't have a competitive agrifood industry unless you have a competitive transportation industry as well. The same holds true here. Virtually every food product we consume is moved on a truck at some point, probably several times for that matter. If you want a full picture of the state of food safety, you have to look at every link in the supply chain, and trucking is a key component.
I'll keep my remarks fairly general. I want to give the subcommittee a sense of the regulatory landscape that the trucking industry operates in, as well as some background on CTA's HACCP-based program.
Most of you here this evening heard my description last week of the highly competitive nature of the trucking industry in Canada: 10,000 carriers employing a quarter of a million drivers, 375,000 people overall, and generating about $30 billion in annual revenue from the for-hire sector. The industry provides service to virtually every town and city in Canada and the U.S. and is responsible for about two-thirds by value of Canada's trade with the United States.
Erb Transport alone provides temperature-controlled service for 1,800 shippers delivering their food products to 24,000 consignees throughout Canada and the lower 48 U.S. states. It is often said that trucking is the most regulated deregulated industry in Canada. The days of economic regulation of trucking rates and routes are long behind us. The carriers nevertheless face the daunting task of compliance with federal, provincial, and state regulation in areas such as road safety, environment, and labour. While most of Canada's trucking industry falls under federal jurisdiction, we are nevertheless impacted by provincial and state regulation in areas such as vehicle weights and dimensions, where no fewer than 63 sets of requirements exist in Canada and the U.S.
Food is no different, where both provinces and the federal government set standards and regulate. The challenge for a trucking company is to ensure that they are familiar with and comply with the standards in all of the jurisdictions in which they operate. Government regulation is of course just one fact that will influence carrier practices in the safe transportation of food products. The second important consideration is the market. Carriers sell their services to food shippers, and if they want to win new freight contracts and retain existing business, they must meet the service standards they negotiate with their clients.
When it comes to the food business, there is probably nothing more important than meeting shipper requirements dealing with food safety. We have seen the irreparable damage that can be done to a food manufacturer or retailer, and the health risk to the public, if a food product is subject to chemical, biological, or physical contamination.
Food shippers have a very clear interest in ensuring that the carriers they use have standards and procedures in place to ensure vehicles are adequately cleaned and sanitized, that there is no cross-contamination of food products with other commodities, and that the cold chain is maintained throughout the transportation process, from the loading dock to the receiving dock. On the receiving end, consignees also need to satisfy themselves that food that arrives on their dock has not been contaminated during transport, and that they have procedures in place to monitor, for example, the temperature of loads during transport.
I'm certainly not here to suggest that the market is somehow a substitute for food safety regulation. But going back to what I said to the full committee last week, there is probably not a more competitive industry in Canada than trucking. A carrier is not going to last very long in this business if they fail to live up to their obligations to shippers in vitally important areas like safe food handling practices. It's not just about price.
In a similar vein, there are various things carriers can do to go beyond regulatory and shipper requirements for food safety, the most notable one being HACCP. I'd like to take a few minute to describe CTA's involvement in this area.
Back in 2001, CTA was approached by the Canadian Food Inspection Agency regarding the Canadian food safety adaptation program. It provided funding for HACCP-based programs to national associations representing the off-farm sector all along the supply chain. Our first question, naturally, was what HACCP stood for, because nobody on staff at CTA had heard of it. We were also reeling at the time from a spate of new security programs being introduced in the wake of 9/11, and the last thing we really needed was another project.
However, the more we talked to CFIA, the more we realized two important things. First, if CTA didn't get engaged in the development of a HACCP-based program for trucking, somebody else would do it for us, so better to steer the ship than just be along for the ride. Second, HACCP programs were beginning to spread among the customers we served, so we felt it important to give carriers a program they could adopt that would dovetail with shipper programs. We wanted to create a situation where a carrier would not have to comply with multiple shipper programs, but instead would have one that was uniquely tailored to our industry.
I won't go into all of the details, but CTA applied for and received funding from CFIA, and later from Agriculture and Agri-Food Canada under its food safety and quality program, to develop a HACCP-based food safety program geared specifically to trucking operations. We assembled an advisory team consisting of carriers, CFIA technical experts, and national food associations such as the Canadian Meat Council, the Canadian Council of Grocery Distributors, the Canadian Produce Marketing Association, and the Canada Grains Council. While CTA had overall responsibility for the project, the actual work of developing the program was contracted to Kasar Canada, a Nova Scotia-based company with significant expertise and experience in the development and implementation of FSEP and HACCP.
Work began in 2001 on the development of a strategic plan. A draft food safety program was put together with the input of the advisory committee. It was piloted by 10 carriers from across the country operating in different parts of the food industry such as meat, dairy, grain, and dry goods. It was revised according to the lessons learned during the pilot phase, and ultimately submitted to CFIA for technical review.
I'm pleased to note that in February 2005, CFIA advised CTA that our trucking food safety program, consisting of a set of core elements and supported by 10 product-specific modules, met the agency's technical requirements. CTA subsequently contracted with Kasar to deliver the program on its behalf and assist carriers on a consulting basis to integrate the trucking food safety program into carrier operations and to oversee implementation through annual audits.
I'll be perfectly blunt with you in saying that we've fallen short of expectations in moving our HACCP program into the marketplace. As of today, we have 14 certified carrier participants. Some, like Erb Transport, and Midland of Moncton, New Brunswick, are major players in the food trucking business. Other, smaller carriers in different parts of the country have also come on board. What accounts for this? There are several reasons I can suggest.
We believed from the outset that the major push for HACCP would come from the food shipping community, but it seems this took longer than expected to materialize. A lot of carriers got in touch with Kasar to learn about the trucking food safety program when it came out, but many backed off, saying, “We already comply with regulations. We're already meeting any additional requirements that our clients place on us, so we'll do HACCP if and when shippers demand it.”
One other thing carriers noticed when exploring HACCP was that they already did most of what was required, but they didn't have the detailed record-keeping systems in place to demonstrate compliance with HACCP principles.
Though my information is only anecdotal, I would say that the tide seems to be turning in this regard. As Mr. Gyoroky will attest, food clients are increasingly demanding signed food safety agreements from their carriers, including HACCP programs, perhaps in reaction to high-profile food safety incidents, perhaps in response to the huge attention given to food and product safety generally in the United States, and perhaps in response to inquiries such as these. Whatever the reason, we're beginning to see positive signs.
We had also thought that if the federal government were to confer official recognition on off-farm HACCP programs such as CTA's, they would have more cachet with shippers. While there has been a number of discussions between industry--under the auspices of the food safety coalition--and government representatives from CFIA, the discussions have not yielded anything concrete thus far.
Thank you, Mr. Chairman and subcommittee members, for allowing us to appear today. Both Mr. Gyoroky and I would be pleased to respond to any questions you may have.
Thank you.