The deep shipper concerns about capacity in trucking that first surfaced in the final quarter of 2003 and paved the way for some of the most significant rate hikes since deregulation now seem a distan...
The deep shipper concerns about capacity in trucking that first surfaced in the final quarter of 2003 and paved the way for some of the most significant rate hikes since deregulation now seem a distant memory. A slowing Canadian economy which showed anemic growth in the final quarter of 2007, continuing fears of recession in the US, and the impact of a persistently high dollar reducing Canadian exports to the US have combined over the past year to greatly reduce shipper concerns that there were not enough trucks on the road to move all the goods that needed to be moved. In the late fall, our annual Transportation Buying Trends Survey polled shippers across Canada to gain a read on the depth of their concern about capacity by mode going into 2008. In the accompanying chart, a score of 5.0 designates balanced capacity. Any score below that indicates shipper perceptions of over-capacity and any score above that indicates shipper perceptions of a shortage in capacity.
Shippers believed both TL and LTL trucking to be in excess capacity. They also felt the courier and airfreight market were in excess capacity while marine and rail were considered to be just slightly tight on capacity.
Of course, easing concerns about capacity among shippers is translating into much more aggressive bargaining and rate shopping than was the case in recent years and is placing distinctly downward pressure on rates. The number of shippers accepting rate hikes of more than 4% (exclusive of fuel surcharges) has been declining significantly since 2005.
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