TORONTO, ON — We don’t know what your New Year’s resolution was, but maybe Ontario’s truckers got together and decided to be more optimistic in 2014 because they’re more positive about trucking’s future than they’ve been in years.
In Ontario Trucking Association’s (OTA) first quarter 2014 survey of business conditions, carriers showed across-the-board improvements – unprecedented, in some cases – in all four sectors monitored (Intra-Ontario, inter-provincial, southbound US, northbound US).
The results show that improving economic conditions, especially in the U.S., are being reflected by sustained freight volume increases. Meanwhile, freight rates seem to oppose the recent trend of not keeping pace with volume expectations.
Although this time of year is usually slow for trucking, the OTA found:
- 42 percent of carriers said freight volumes increased in Ontario in the last three months (the highest level since early 2011);
- Six percent reported a decrease in volume;
- 48 percent reported better volumes in southbound US lanes (highest ever recorded level for this sector);
- 38 percent said volumes improved inter-provincially (same as last quarter).
Looking ahead at the next six months, more carriers see growth:
- 48 percent say they expect improvements within Ontario;
- 54 percent say they expect US volumes to keep growing;
- Only seven percent say they think volumes will drop, which is the lowest number since the survey started;
- 39 percent say volumes will remain static;
- 44 percent said they expect volume growth inter-provincially.
What’s more, carriers seem to be positive about rates as well:
- 29 percent said southbound US rates are rising;
- Only 18 percent said rates will drop, which is the lowest ever recorded number;
- 23 percent reported higher rates within Ontario;
- 28 percent said inter-provincial lanes rates are stronger, which is double the last quarter and four times more than the same time last year.
After several quarters of unyielding, yet consistent capacity, things seem to be changing.
- 52 percent of carriers still say capacity is unchanged;
- 27 percent report supply constraints, which is at least 10 points higher than three out of the four quarters in 2013;
- 36 percent expect capacity to get squeezed further over the next six months – the highest since the start of 2010.
Just under half of fleets plan to add tractors, trailers, drivers or owner-operators.
Rising costs and effect of Canadian dollar
- 88 percent of carriers report higher fuel costs, up from 58 percent last quarter
- 61 percent said fuel prices will climb by 10 to 15 percent, the highest reported hike since the OTA started surveying carriers on cost issues
Carriers say their top concern is:
- 29 percent reported that fuel prices are their top concern, up from 18 percent;
- 29 percent said it’s driver shortage;
- 42 percent said it’s capacity;
- 19 percent said economy, which dropped from 30 percent.
On the bright side, the lower Canadian dollar is a benefit to some carriers, though few carriers want it to slip too far. Only 15 percent of carriers said they’re comfortable with a dollar as low as $0.80, while 30 percent said $0.85 is a good spot for the loonie to settle and 42 percent preferred a $0.90 landing.
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