Ontario fleets reducing capacity, bracing for further challenges: OTA

Avatar photo

TORONTO, Ont. — Trucking companies are reducing capacity and bracing for even greater challenges over the next three to six months, according to the Ontario Trucking Association’s Business Pulse e-Survey for the first quarter of 09.

 

The survey polled Ontario trucking companies between Jan. 12 and Jan. 20. Of the 82 fleets that responded, 51% said they were pessimistic about overall industry prospects over the next three months, which was up sharply from 34% who expressed pessimism in the same survey in the fourth quarter of 08.

 

Only 17% of respondents said they were optimistic about the industry’s prospects over the next quarter, down from 24% in the last survey. The survey suggested the industry is expecting a freight recession to continue for at least the next six months.

 

Seventy-four per cent of respondents said they are experiencing declining freight volumes, compared to just 52% of respondents in the last survey. Sixty-one per cent said loaded miles are decreasing, up from 36% in the fourth quarter. On southbound lanes into the US, 82% of respondents said volume was down, compared to just 51% in the last survey.

 

“This is something shippers and carriers need to work together on,” David Bradley, president of the OTA said.

 

The survey suggests trucking companies are parking trucks to cope with decreased demand – 45% of respondents said capacity has been reduced in their segment and 53% said they expect to see further capacity reductions over the next six months. Twenty-three per cent of fleets said they will be reducing the number of company drivers they employ while 28% said they will scale back their owner/operator fleet.

 

“A lot of this can likely be handled via natural attrition, but unfortunately there may be layoffs in some cases,” predicted Bradley “Still, most companies said there would no net change in the number of drivers and owner/operators and good drivers will always be in demand.”

 

The survey also held bad news for truck manufacturers and dealers. Sixty-seven per cent of respondents said they would not be adding tractors to their fleet and 23% said they’d reduce their fleet size. Only 10% of respondents said they’d be adding equipment to their fleet over the next three months. Buying intentions for trailers mirrored those of tractors, the survey indicated.

 

Most fleets said they expect rates to remain the same over the next six months. Twenty-two per cent said shippers are moving to secure long-term contracts, up from 16% in the Q4 08 survey. But most, 65%, said contract timeframes are not changing. Forty-one per cent of respondents complained that shippers are taking longer to pay their bills.

 

On the positive side, 88% of fleets said customers are paying a fair fuel surcharge.

 

Bradley said OTA members “are doing a good job of controlling what they can control to manage their way through these difficult times. Of course if the freight recession becomes a freight depression or it takes longer than expected for the economy to begin to right itself then all bets are off. But, most of what is being produced and consumed will continue to be shipped by truck. The industry is not going to disappear.”

 

To obtain the full survey, contact the OTA or visit www.ontruck.org.

Avatar photo

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.


Have your say


This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.

*