Slower economic growth on both sides of the border is having a measurable impact on shipment volumes. For the past three years more than 60% of shippers reported double-digit increases to their shipment volumes, according to our annual Transportation Buying Trends Survey. For 2007, however, only 49% of shippers were expecting double-digit increases. The impact of lower shipment volumes is having a clear impact on trucking rates. Whereas back in 2004 and 2005 more than 80% of shippers reported increases to their freight rates, rate increase penetration was down to 64% in 2006 and only 59% of shippers expect higher truck rates for 2007. (Our annual Transportation Buying Trends Survey, conducted by our sister publication Canadian Transportation & Logistics in partnership with the Canadian Industrial Transportation Association and CITT, includes the participation of more than 700 shippers across Canada.)

2.9%

That’s the average increase in costs experienced by Canada’s largest for-hire carriers (companies earning $25 million or more annually) in the last quarter of 2006 compared to same quarter the previous year. Average per-carrier revenue increased only 2.3% from the fourth quarter of 2005, according to Statistics Canada data.

The top 91 for-hire carriers generated operating revenue of $2.4 billion and operating expenses of $2.3 billion in the fourth quarter. The top for-hire carriers’ operating ratio (operating expenses divided by operating revenue) stood at 0.94 in the fourth quarter compared to 0.93 in the same quarter of 2005.