TOP 100: Industry snapshot shows fleets getting fit

TORONTO — We were putting the finishing touches on this year’s Top 100 For-Hire carrier charts when into our inbox dropped another chart — this one from Nulogx Transportation Management. They’re the rate-tracking people who produce the monthly Canadian General Freight Index (CGFI).

The graph shows that overall freight rates have stopped their freefall and in some cases, began creeping upward to close out an awful 2009.

Rates were at their zenith last September and kept sinking for more than a year and they’re still dismally low. However, as David Bradley, the CEO of the Canadian Trucking Alliance (CTA) says, the worst is over but things are still "fragile."

Rates weren’t all that was sinking over the past 12 months. As the results of our annual tally came in, it became clear that the big fleets got a lot smaller. Count after count came in; and most told the same story. There are far fewer tractors and trailers out there.

At the top of the chart (which is now uploaded and ready to access online by clicking here), TransForce offloaded more tractors than most companies own. Their tractor count went from 7,200 last year to 6,630. TransForce’s owner-operator headcount went from 1,818 to 1,730.

Groupe Robert shed 54 tractors and 262 trailers, winding up a fleet of 787 power units and 3,620 trailers.

Not all the drops were so dramatic. Vitran reported 2,253 tractors last year and 2,042 this year.

Some, like Canada Cartage, reported their numbers remained stable.

A few fleets grew, most notably MacKinnon Transport of Guelph, Ont., but its numbers swelled primarily because of the much-publicized purchase of another former Top-100 fleet, L.A. Walker (which, as far as the nameplate goes, filed for bankruptcy in January).

But the fleet sizes are generally down and, presumably, more right-sized. As rates stop falling so will fleet sizes.

Furthermore, many people in the industry are expecting the right-sizing to continue as the upcoming new American enforcement regime, CSA 2010, forces unfit trucks and drivers off the roads.

"CSA 2010’s the best thing that ever happened to trucking," is how one Michael Ludwig of Ludwig Transport put it.

According to a recent report from the ACT Research company, old trucks are losing their value; banks are losing interest in propping up failing companies, and people are going to start buying rigs — eventually.

Kenny Vieth, a senior analyst with ACT explains it this way: "When you combine increased carrier bankruptcies with record large fleet-capacity reduction efforts, the truckload sector is forecast to see freight volumes outstripping tractor supply by mid-year, which will set the stage for dramatic improvements for both trucking and commercial vehicle demand."

Maybe it’s best summed up by one of the Ontario carriers who didn’t report shrinkage this year. Doug Mackie, of the Oshawa-based Mackie Group sees 2010 as a year of sustained but flat operations.

Says Mackie: "Stronger companies will survive."

Be sure to check out the Top 100’s supplementary article, Best in Class II, this week’s weekly online feature which reveals which Canadian LTL carriers are favored by their customers and why.

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