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Optimism Drops Again in Latest OTA Business Survey

TORONTO — The Ontario Trucking Association (OTA) released the results of its 4Q12 survey yesterday, noting that, while there is a slim majority of executives and owners that are optimistic, confidence levels are slipping among those surveyed.

That optimism was at its lowest (52 percent) since the first quarter of 2010, OTA said, and has dropped five out of the last eight quarters.

Still though, that optimism is higher than it was back in 2008 and 2009.

Top concern this quarter was, like most business surveys are reporting, the economy.

Freight Volumes and Rates

The majority of respondents said that freight volumes have been holding steady from three months ago. Those respondents that did reporta decrease in volumes are seeing those drops in intra-Ontario, interprovincial and northbound US markets, OTA observed.

The southbound US market is sending mixed signals, OTA said, with 43 percent of carriers in that market reporting volumes staying steady and 37 percent reporting a decrease. Those that reported southbound US volumes increasing has doubled from Q3, but is still only sitting at 20 percent. "Compared to a year ago," OTA said, "61 percent of respondents say that freight volumes in the Ontario trucking industry declined."

Shippers Taking Slightly Longer to Pay

While still in the minority, the amount of carriers reporting that shippers are taking longer to pay increased. If that trend continues, if could be become problematic, OTA said. Still though, the majority of carriers reported that shippers were taking the same amount of time to pay their bills. Interestingly, the majority of carriers said their payment terms were for 30 days, and only 25 percent of carriers said that charge interest on invoices not paid on time.

Capacity Stays Tight

"Tight capacity appears to be holding," OTA said. The proportion (15 percent vs 31 percent) who said that capacity was decreasing declined from quarter to quarter and those that said capacity had increased rose from 15 percent to 23 percent.

That was offset by a larger majority of carriers who said that capacity in their respective segments stayed the same from last quarter. "Compared to six months ago the proportion of respondents who reported that capacity had increased, remained the same (23 percent), but the percentage who reported a decrease in capacity actually jumped from 17% in the 3Q12 survey to 23 percent."

Are more shippers locking in capacity? It's starting to look that way, OTA said, noting an increase (16 percent to 27 percent) in the number of respondents who said customers were extending the timeframes in contracts.

Discipline

Discipline is still the mantra when it comes to adding capacity, with 55 percent of those surveyed saying they aren't planning for "change in the number of drivers in their fleets over the next three months. Forty-three percent said they were planning on adding drivers, and 55 percent if carriers said they have plans to bring on onwer-operators (up from 50 percent from the previous quarter.

Sixty-one percent of carriers have no plans to add to the net number of tractors over the next three months. Forty-one percent said they have no plans to add trailers, up from a reported 36 percent in Q3, with 11 percent planning to reduce their amount of trailers, and 48 percent planning no change either way.

 
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