TORONTO, Ont. — Increasing optimism and lingering uncertainty were the main feelings expressed in the Ontario Trucking Association’s fourth quarter Business e-Pulse Survey, conducted Oct. 5-23.
Seventy-one per cent of responding carriers felt the Canadian economy has hit bottom (up from 52% last quarter) and 64% felt the Ontario economy has bottomed out (compared to 46% last quarter). However, just 53% of respondents felt the US economy has hit bottom.
The Q4 OTA survey found 41% of respondents have an optimistic outlook for the rest of the quarter while just 22% were pessimistic. That’s a big improvement from the beginning of the year when only 17% voiced optimism and 52% were pessimistic. Thirty-seven per cent of respondents are still unsure about where the industry is headed.
“Obviously, there is a growing sense that the worst is now behind us, which is a very good thing,” said OTA president David Bradley. “However, I would inject a note of caution and say that things are relatively fragile. So much of Canadian economic activity is dependent upon trade with the United States and if the US economy continues to falter, then we will be impacted. That, along with the value of the Canadian dollar, continues to be the major wild card in terms of the industry outlook.”
Where freight volumes are concerned, improvements are expected for intra-Ontario freight (35% of respondents), interprovincial (43%) and northbound US traffic (38%). However, only 27% feel southbound US freight will improve while 24% expect it to decline over the next six months.
Overall, the majority of respondents are expecting freight volumes to remain about the same in all lanes as they are today.
The survey also showed signs of the continuing tightening of capacity. Forty-two per cent said capacity in their segment has decreased, compared to just 21% in the last survey. Almost one-third of respondents expect to see further capacity reductions in their segments.
There was good news for drivers as well, as it seems job losses may be coming to an end. Most respondents said they plan to keep their current numbers of drivers and owner/operators over the next three months.
On the rate front, most respondents expect rates to stay the same over the next six months while one in five are confident rates will increase in major traffic lanes.
“The current rate environment is not sustainable,” said Bradley. “Rates will adjust. We are seeing some improvement in volume. Capacity is not going to increase. It’s a matter of when, not if.”
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