Changing trade patterns point to long-term challenge for trucking

sportsou

Well-Known Member
Staff member
Costs for Canada’s largest carriers are continuing to rise faster than revenues and that should be cause for concern on two fronts.

First, obviously, because cost containment is proving particularly difficult and will remain so because fuel prices remain volatile, equipment costs are on the rise due to the new emission standards for heavy duty truck engines and labor costs are expected to retain their upward momentum.

These costs have been high for several years now but their impact I believe is being felt more, and will continue to do so, because the slack economy and excess capacity in certain lanes – particularly in US-bound traffic – make it increasingly difficult to gain the healthy rate increases carriers had become accustomed to since 2003 and which made rising costs bearable.

Whereas back in 2004 and 2005 more than 80% of shippers reported increases to their freight rates, rate increase penetration was down to 64% in 2006 and only 59% of shippers expect higher truck rates for 2007. (This according to our annual Transportation Buying Trends Survey, conducted by our sister publication Canadian Transportation & Logistics in partnership with the Canadian Industrial Transportation Association and CITT.)

A major concern for the long term has to be the change in trade patterns we’ve experienced since 2002.
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