TORONTO — The Canadian freight market continues to be knocked around by recessionary pressures — hold on, hold on, we have some good news this time — but it also may be showing the first indications of stability, according to the Ontario Trucking Association’s 2Q09 Business Pulse e-Survey.

The survey, conducted between April 6th and April 20th, shows that out of 74 trucking companies of all sizes and sectors interviewed, the largest proportion (43%) said they were pessimistic about overall industry prospects over the next three months.

That’s not so good news, of course. But what’s changed is that this is down from 52 percent who said the same thing in the first quarter. Plus, the percentage of carriers that are optimistic about industry prospects rose significantly from 27 percent from 17 percent.

OTA says 30 percent said they are unsure of where things are heading, which, for those who subscribe to the theory that no news is good news, would be quite happy with.

"While we have a long way to go and more carriers remain pessimistic than optimistic, the narrowing of the gap between the two is perhaps an early signal that things may be stabilizing but it would be unwise to make that claim on the basis of one quarter’s results," says OTA President David Bradley. 

Shippers who have been taking advantage of the
capacity situation during the downturn will get a rude
awakening when things recover, says OTA.

But don’t start partying like it’s 2004 just yet. About 75 percent of the survey respondents still think that the Canadian economy has yet to hit bottom and even more (81%) believe Ontario in particular will slip farther as well.

The large majority (71% for Canada, 72% for Ontario) say they have yet to see any indication that various government stimulus programs are working.

Overall, 62 percent said that freight volumes had declined by more than 20 percent over the past year. The proportion of trucking companies expecting freight volumes to improve over the next 6 months is still very low at 21 percent, although that’s up slightly from the last survey, more (27%) still think freight volumes will deteriorate over the next 6 months.

Carriers are trying to managing cash wisely and reduce capacity. But, according to Bradley “it’s a game of catch-up right now since the rate of decline in freight volumes has outpaced the rate of decline in capacity in recent months.”

The survey shows that 38 percent of respondents said capacity has been reduced in their segment of the industry over the past quarter, but this is down somewhat from 46 percent. Meanwhile, 41% (compared to 25% in 1Q09) said capacity has increased.

This, says Bradley, could reflect capacity that has been shifting out of certain industries like automotive or north-south traffic into domestic laneways. "one thing is sure," though, "when we come out of this mess, there will be less capacity in the trucking industry and those shippers that have tried to take advantage of the current situation may find themselves having a hard time finding anyone interested in hauling their freight."

Yes, things remain ugly, says Bradley. “But more carriers are expecting freight volumes to either stay the same or improve over the next 6 months than those who expect it to deteriorate, which is a hopeful sign."

But, as Bradley always sticks to the end of any optimistic forecast, "all bets are off" if the automotive industry fails or things get worse in the U.S.