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Ontario carriers lacking optimism


TORONTO, Ont. – Ontario motor carrier executives are less optimistic about their business prospects over the next quarter than they were three months ago.

The Ontario Trucking Association (OTA) Q4 business conditions survey found only 49% of respondents felt good about their overall prospects for the next three months, down from 55% in the previous survey and well off the 86% who were confident in the first quarter of 2015.

One-third of respondents said they were “unsure” about their prospects, marking the highest level of uncertainty seen since 2009. Twenty per cent reported being “pessimistic,” more than twice the number who felt that way two years ago, the OTA reports.

Respondents said the “peak” pre-holiday shipping season was subdued this year. Forty-three per cent of fleets said northbound freight volumes have decreased, the second highest number to report that since the fourth quarter of 2015. The majority of respondents (61%) said there has been no fluctuation in intra-Ontario freight volumes.

Those carriers reporting an increase in loaded miles, at 14%, are the smallest percentage to do so since 2009. Sixty-two per cent of respondents reported no change in loaded miles, while 23% reported a decrease.

Looking further ahead, 81% of respondents predicted no change to intra-Ontario freight volumes over the next six months. Only 19% of carriers expect improved volumes, down from 26% last quarter. Similarly, 77% expect no interprovincial freight volume changes. Seventy per cent of respondents expect no improvement in southbound loads, marking a new high for this category.

Carriers also reported stagnant rates. Only 6% of respondents conveyed pricing growth in the last quarter while 27% reported worsening rates.

Fifty-three per cent of respondents reported no shift in capacity over the past three months and aren’t expecting a turnaround over the next quarter.

Respondents indicated more shippers, 46%, are looking to lock in capacity, marking an all-time high.

“This is perhaps an early indication shippers feel the brink of a transportation cost surge on the horizon, likely in the form of fuel prices, new environmental equipment and salary raises in a market short of truck drivers,” the OTA reported.

Fleets also reported they continue to grapple with rising costs. Eighty per cent of fleets reported the cost of tractors and engines has gone up 10% or more. Also, a third of respondents said their fuel costs have gone up. The three top concerns cited by respondents were, the driver shortage, the economy and rates/capacity.


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1 Comment » for Ontario carriers lacking optimism
  1. As we approach 2017 there appears to be a lot of uncertainty in our industry. With apparent rising costs in equipment and fuel, perhaps its time for carriers to look at inefficiencies in their back offices. Outsourcing seems to have less of a buzz lately however there is no denying the cost benefits and level of expertise you can acquire when compared to the costs of paying a full-time employee salary!

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