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OTA fleet survey reflects slowing economy

TORONTO, Ont. -- A summer slowdown was evident in the responses to the Ontario Trucking Association's Q3 survey of Ontario fleets.

TORONTO, Ont. — A summer slowdown was evident in the responses to the Ontario Trucking Association’s Q3 survey of Ontario fleets.

The survey indicated 64% of responding fleets were optimistic about the industry’s overall prospects for the next three months, an 8% drop from the second quarter survey. The number of carriers that were “unsure” rose 5% over last quarter, to 26%. Only 9% of responding carriers reported they were pessimistic about the next three months.

Sixty-seven per cent of responding carriers said freight volumes were up compared to a year ago, however fewer carriers reported improvements over the past three months. Sixty-two per cent said intra-Ontario freight volumes are about the same as they were three months ago while 32% said volumes within Ontario had improved. Interprovincially, 49% of carriers said freight volumes had stayed the same.

Cross-border carriers noted a softening of the US market, with 31% reporting southbound US loads decreasing compared to three months ago, up 14% compared to the Q2 survey. Only 19% of respondents said southbound volumes were improving, compared to 39% who felt that way last quarter.

Just over half (51%) of responding carriers said northbound freight volumes are improving, down 10% from the Q2 survey.

Meanwhile, carriers reported sharp increases in all major operating costs. Thirty-eight per cent reported fuel costs increases of 15-20% compared to last year while 23% reported costs increases of greater than 20%.

Most carriers also noted rising maintenance (98%) and tire (89%) costs. Most responding fleets reported maintenance cost increases of 5-10% while 61% of responding fleets reported tire costs rose a similar margin. 

Ninety-one per cent of carriers also reported labour costs were on the rise, with the majority of respondents indicating driver wages increased 5-10% in the quarter.

Forty-five per cent of fleets indicated loaded miles are increasing, which is the highest proportion of respondents to report this since the survey was launched in the third quarter of 2008, the OTA noted. Seventy-two per cent of fleets indicated the average length of haul is staying the same while 18% suggested it is increasing.

When it comes to rates, 26% said intra-Ontario freight rates were improving, up 4% compared to the second quarter, but the majority (61%) felt rates were about the same. Forty-six per cent of respondents noted improving rates for interprovincial freight. However, continued weakness in the southbound US market was reflected in the rates with only 14% of carriers reporting improving rates – down 11% since the last quarter. The majority (58%) reported southbound rates were about the same.

Northbound rates, on the other hand, were stronger, with 55% reporting improving rates and only 2% of responding carriers indicating northbound rates were decreasing.

Carriers seemed split on whether they will be adding drivers and owner/operators over the next three months, with 51% of respondents indicating they plan to add more company drivers and 49% planning to add more O/Os.

A slight majority of carriers say they have no plans to add new tractors (54%) or trailers (53%) over the next quarter.

The OTA survey also found 85% of shippers are paying reasonable fuel surcharges, a 7% increase over the last quarter. A third of responding carriers noted, however, that shippers are taking longer to pay their bills, another indication the economy may be softening.

The OTA survey was based on responses from 50 Ontario fleets between July 4-25, 2011.

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