Service companies need to make enough to survive

Estevan – “Your most important asset is your men, plain and simple.”

That’s according to Rod Benning with L&C Trucking of Estevan.

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Asked how things are going on March 2, he replied with a laugh, “They’re certainly not going.”

“We had a better January in 2017 than in 2018.”

They had hired extra people with the expectation of a busy winter season, but it never happened.

“We were at 40 to 44 people. We had hired probably five guys,” Benning said. The company, at peak during the boom years, had 78 people.

“I thought there would be a little more work than the drilling rigs,” he said, referring to production work.

“It just didn’t happen.”

He noted that smaller companies, who operate with lower overhead, and don’t pay for substantial safety programs or dispatchers, have taken some of the work. “There’s too many one-man shows, charging unsustainable rates that won’t cover their costs of wear and tear,” he said.

“Over the last year, we’ve worked to cover our manpower,” Benning said.

They bought a truck six months ago, used. They sold off five used trucks to get the one used unit.

“That was our first since 2014, new or used,” Benning said, echoing comments Pipeline News has heard from most trucking firms in southeast Saskatchewan in recent months. New trucks simply aren’t being purchased, throughout the region. He said the payback horizons are simply too long.

Overall, he explained, “It’s certainly far from fine.”

They’ve seen a slight increase in their rates, but it doesn’t cover the roughly 25 per cent increase in their fuel costs, compared to diesel’s low point. They don’t have a fuel surcharge, as Benning said, “They don’t go over well with most oil companies. It doesn’t seem to fly.”

He’s hoping the rest of 2018 sees activity levels as high as the first quarter, but added he didn’t believe that would happen. The broader reason, for that, he said, was, “We need pipelines.”

Service companies need to make enough to survive, he noted.

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