Truckers Feeling Good About Freight Market

TORONTO- Ontario truck carriers remained optimistic about the freight market in the fourth quarter of 2014, according to the Ontario Trucking Association’s (OTA) most recent survey of business conditions.

Freight Volumes

• 47 percent of carriers said intra-Ontario freight volumes improved in the previous three months; a six point jump from the 2Q survey;
• Three percent of carriers reported lower volumes within the province;
• 53 percent said volumes increased intra-provincially;
• 55 percent of carriers reported increased freight volumes for southbound U.S. lanes.

“Remarkably, for the second straight survey, no one reported decreased U.S. volumes – the first time ever that’s happened and an obvious indication Canadian carriers are aided from an improved U.S. economy,” the OTA claimed.

Looking ahead, 29 percent of carriers expect improved volumes over the next six months – about half as many who said the same in 2Q, but consistent with the 4Q13 rate. Nearly 70 percent said volumes are unchanged, while those who predict less freight is still barely measurable at three percent. Intra provincially, the 40 percent who expect an uptick is also lower by nearly half, but still 10 percent higher than the same period last year. The number of carriers who forecasted a boost in southbound freight was also down by 20 points (73 percent to 53 percent), but double the rate of 4Q13.

Rates

• 45 percent of Ontario carriers expected price hikes – the highest ever recorded – and 14 percent more than the last survey.
• No carrier surveyed expects decreases either within Ontario or throughout the other provinces.
• 47 percent expect increases inter-provincially
• 45 percent of carriers expect higher southbound pricing
• 52 percent foresee unchanged rates, a reflection of bolstering confidence in pricing stability.
• 33 percent expect increases northbound and there’s a slight increase in those who expect lower rates, but that’s still only 13 percent of carriers.

The effect of sustained volume increases along with a worsening driver shortage continues to squeeze capacity, the OTA found.

Looking ahead, 84 percent of carriers either don’t expect change or expect further tightening. Still, 82 percent say customer contract timeframes are not lengthening, despite all the warnings of driver shortages and documented shipper concerns over truck service availability. On that note, 59 percent of carriers say they plan to add drivers; but that could be replacement demand, not expansion, the OTA says.

Carrier Costs

Seventy-eight percent of carriers say driver pay is rising, with about 10 percent of those respondents reporting raises in the 10 percent range – more than the previous high in 2011.

“It’s also clear that next generation, clean emission trucks and all the added safety and environmental technology is increasing the cost of new equipment,” the OTA says, adding, “only six percent of carriers report fuel price increases in the 15 percent-plus range.”

 


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