TORONTO, Ont. — The soaring Canadian loonie is increasing pressure for trucking rate increases, according to David Bradley, president of the Ontario Trucking Association (OTA).
“Carriers need a rate increase to make up for what they are losing as a result of the change in the value of the Canadian dollar vis–vis the U.S. currency,” Bradley said in a recent press release.
Bradley explained a cheaper Canadian dollar allows carriers to offer shippers lower rates and still make a decent profit, because most cross -border carriers are paid in U.S. dollars.
But with the loonie gaining ground, carriers are experiencing an immediate shrinkage in revenue, which, along with increased fuel and equipment costs, insurance premiums and a tightening of border security, are making already thin operating margins even thinner.
Bradley is calling for a rate increase to widen the gap.
“The profit margins just aren’t there to absorb the currency shock as well as all the other cost shocks the industry is trying to cope with,” Bradley said.
“This is very serious. I have had carriers tell me that they are prepared to park parts of their fleets if they can’t get higher rates; they have no choice.”
Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry. All posts by Truck News