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Fleets experiencing sticker shock with low loonie

MISSISSAUGA, Ont. — The challenges brought on by a low-value loonie was among the topics that came up several times during the Surface Transportation Summit here today.

David Zavitz, senior vice-president, sales and marketing with Canada Cartage, pointed out a $100,000 truck bought in 2010 costs 38% more today just due to currency fluctuations. In 2010, the loonie was worth more than the US greenback, so that same $100,000 truck would effectively have cost $97,000 loonies. Today, that truck, with a 75-cent Canadian dollar, costs $134,000. And that doesn’t include the 8% or so that OEMs have tacked onto the cost of a new truck over the past five years.

“The dollar today is creating some pretty significant sticker stock for asset-based carriers,” said Zavitz.

He said it’s particularly difficult for smaller fleets that may have to replace a large portion of their fleets in a single year, whereas most large fleets tend to replenish a smaller portion of their fleet every year. He also noted interest rates are higher today than they were in 2010.

Wes Armour, president and CEO of Armour Transportation Systems, said his company will continue to add new trucks, despite the weakness of the Canadian dollar.

“We upgrade our equipment every year,” he said. “I get upset over a 75-cent dollar.”
However, Armour said he still sees a benefit to buying newer, more efficient trucks.

“New trucks are giving us 8 mpg. Before that, we were lucky to get 6, 6.5 mpg. So there are some good things happening and as fuel prices increase, that benefit becomes bigger for us,” Armour said.

Mark Bylsma, president of Spring Creek Carriers, said the higher cost of new iron also means used trucks will fetch more on the secondary market.

“It’s important to have a modern fleet,” he said. “We are getting more on trade-ins than I thought we would’ve, so that offsets a little bit of the ratcheting up of overall cost of capital.”

James Menzies

James Menzies

James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at or follow him on Twitter at @JamesMenzies.
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2 Comments » for Fleets experiencing sticker shock with low loonie
  1. charlie bourgeois says:

    the cost of class 8 vehicles has gone up along with fuel mileages , but that does not justify the rates that Canadian carriers are hauling
    for [especially] the logistics companies. after 40 years in this industry
    through all of the ups & downs over the years. I am in disbelief what we are making our drivers & owner-operators work for. we have finally reached the bottom of the barrel

  2. Lee says:

    You are correct Charlie ….. But as long as guys continue to run for a loss, or hope that breaking even is a win, then they have what they want. We all slug it out like a seagulls fighting over a parking lot French fry , they keep rates pathetically low, freight still rolls, and Joe Average doesn’t pay another dime for his loaf of bread.

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