The road ahead for the Canadian trucking industry remains smooth despite concerns about driver shortages, plant closures and the new North American Free Trade Agreement, a survey by Transcore Link Logistics revealed.
“Fears of an industry-wide downturn may have been overly exaggerated and the positive outlook from industry members bodes well for the strengthening trucking industry,” TransCore said.
As reported by Truck News, 71 % of the respondents identified themselves as carriers, 21% as brokers and 8% as both a carrier and broker.
“Responses were a bit more varied as a slow period of freight activity in the last quarter of 2018 may have dampened short-term expectations,” the survey said. “Nonetheless, 2018 proved to be a year of remarkable new highs and respondents felt 2019 would offer more familiar-levels of activity.”
Over half the carriers surveyed had profit margins above 5%. Compared to 2018, there was a 6-percentage point decline in carriers who had margins below 2%, while there was a 3-percentage point increase in those who had over 15% margins, TransCore said. Brokers came out on top with a leading 34% of respondents having margins above 15%. The survey also showed that it was a busy year for investments, with the industry pouring money into technology, personnel, real estate and security.
In addition, the survey revealed that the majority of respondents (57%) were considering expanding their operations into new markets, while 14% indicated they would be interested in purchasing or acquiring another transportation company.
The industry also has a lot of concerns. Among them, the perennial problem of driver shortages and the introduction of steel and aluminum tariffs between Canada and the U.S.
“As an important commodity that is frequently traded, the negative effects of these tariffs were felt by carriers and brokers alike,” the survey said. The U.S. and Canadian governments lifted the tariffs last month.
The industry was also concerned about the Sino-U.S. trade war, but the survey noted that compared to other domestic-related issues, the effects of this dispute were not as significant based on the submitted responses.
The issue of driver shortages continues to affect the industry, with a large majority of respondents voicing concern about it.
“Responses showed that the more trucks a carrier had, the more likely they would be concerned with a driver shortage. Naturally, this relationship makes sense as having more trucks would equate to needing more qualified drivers to operate them. The underutilization of assets would also negatively impact a carrier’s bottom line,” the survey said.
The respondents also raised concern over looming plant closures.
Despite all these concerns, the survey showed, 71% of all respondents were optimistic about the industry for 2019. It noted that at the time of the release of the report, early 2019 load volumes and truck numbers had risen at a faster pace.
The full report can be downloaded from TransCore.ca.