The Canadian trucking industry faces a shaky market as volumes and freight rates continue to fall – along with falling consumer demand – from pandemic highs.
According to a report by Trucking HR Canada, the industry lost more than 20,500 driver jobs – or 7% of the workforce – in the first three months of this year compared to the end of the year. 2022.
“As the economy has slowed somewhat, so has the demand for trucking services,” said Craig Faucette, program manager within the occupational group.
Small fleets with fewer resources and fewer contracts are particularly prone to a downturn, which comes as consumers spend more on services and less on household items.
“A lot of small fleets are struggling, especially those that rely on what we call the spot market,” said Mike Millian, president of the Canadian Company Trucking Association, in reference to spot shipments that don’t make subject to long-term contracts or recurring schedules.
The even steeper decline in shipments to the United States has also hurt Canadian truckers’ incomes, Millian said, as they scramble to find loads to bring back to Canada after making deliveries south of the border.
Earlier this month, 94-year-old U.S. trucking giant Yellow Corp filed for bankruptcy after years of financial woes, a demise that supply chain expert John Gradek calls “the visible part of the iceberg”.
“A number of carriers are in very, very tight financial situations,” he said.
LTL companies, which deliver multiple shipments to different customers at once, face a particularly competitive market.
Rather than having long-term contracts and regular income to rely on, “small businesses” are bidding daily for shipments on a range of apps such as Freightera and FreightSimple, Gradek analyzed.
At the same time, profit margins in a competitive industry are shrinking further, with prices for long-haul loads falling 7% year-on-year in the United States, according to that country’s Bureau of Labor Statistics. .
This comes amid exploding operating costs, as diesel fuel prices approach 2022 highs, interest rates on truck leases rise and loopholes in the supply chain persist.
