Trade Resources Industry Views 67% of Ontario Truckers Are Feeling Optimistic About The Trucking Biz

67% of Ontario Truckers Are Feeling Optimistic About The Trucking Biz

If you've been feeling a bit chipper lately and looking forward to the rest of the year, don't be alarmed: you may just be part of the 67 percent of Ontario truckers who are feeling optimistic about the trucking biz.

According to the Ontario Trucking Association's (OTA) 3Q13 Business Survey, the trucking forecast for the province is the brightest it's been all year. There's more optimisim and less uncertainty in the short-term.

The survey showed that 67 percent of respondents (majority are small to medium fleets consisting of 10-50 trucks, noted the OTA) are optimistic about the upcoming quarter — that's 22 percent higher than the start of 2013 and the highest level 2012's 3Q.

Only 23 percent of carriers said they were uncertain about their prospects, OTA said, "exactly half who answered in the first quarter survey that they were unsure about the next three months."

Volumes

Carriers reporting improved intra-Ontario freight volumes dropped over the last three months (28% to 23%), but those that indicated decreased volumes fell down to 12% from 31% — that's encouraging, OTA noted. Stability also looks to be restored, with 65% of carriers indicating no change compared to last quarter's 42%.

"Carrier responses for freight volumes in Inter-provincial, southbound US, and northbound US lanes all mirrored the last quarterly survey, where 33%, 14% and 39% respectively indicated improvements," OTA said. Between 40 to 60% reported unchanged freight levels.

The average length of haul held steady at 77%, while carriers that reported overall loaded miles increased "dramatically" over the last year — from the mid-20's to 40 percent.

Thirty-five percent of carriers are expecting improvements in Ontario over the next six months, a five percent increase from last quarter. And, the OTA said, the level of pessimistic respondents dropped to 4% from 19%. Over two-thirds of carriers are calling for no change.

Inter-provincially, the 30% who predicted an improvement matched the last quarter, while southbound expectations are staying steady as 28% expect a boost. Pessimism is down here, too, specifically to 8%. That's the lowest level reported by carriers since 1Q2011. Over two-thirds of carriers say northbound volumes are unchanged.

Rates on Horizontal Trajectory, But Firm

Rates look to be on a horizontal trajectory, but the good news is that only 15% of carriers are anticipating shaved rates in the next three months. That's the second lowest level in nearly two years, OTA added.

Moreover, 77% said rates have firmed up, an 18-point increase from last quarter and the highest level of ever recorded in the OTA survey. "Perhaps most encouragingly, southbound rates bucked four straight quarters of falling expectations in the persistently soft sector and posted the highest rate since 3Q12," OTA said.

Replacement Capacity, Not Fleet Expansion Capacity

For 63% percent of carriers, capacity remains the same while 28% are calling for decreases – 10 points higher than the last quarter. "For the second straight quarter, the rate of carriers expecting to add capacity is under 15% — in line with historic lows of 2008."

Forty-seven percent of carriers said they are planning to add drivers, but that number has been consistent for the last several quarters, OTA noted. "However, judging by the low capacity expectations — as well as the number of carriers who plan to add power units remains relatively low (22%) — the increased hiring activity appears more indicative of replacement capacity than fleet expansions.

The Big Three Costs

The big three operating costs are still labour, the price of equipment and diesel.

"Seventy-three percent of carriers say they are paying 2-5% in wage increases, which is slightly lower than last quarter but still above the 60-70% who reported the same level of increases throughout most of 2011-2012.

Fuel costs look to be creeping back up, OTA reported. "Thirty-six percent report diesel price hikes of 2-5% while an additional third of respondents say they’re forking over 10% more for fuel. An average of nearly 20% of carriers indicated the same fuel increases during the last three quarters."

Source: http://www.todaystrucking.com/sunshine-lollipops-and-a-better-freight-outlook-for-ontario-truckers
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Sunshine, Lollipops and a Better Freight Outlook for Ontario Truckers