Bradley not as bullish but predicts steadiness for ’07

TORONTO — Canadian truckers, in some sectors anyway, aren’t exactly partying like its 2004. But that doesn’t mean that the industry isn’t relatively strong, says Ontario Trucking Association David Bradley.

The economic signals seem to be pointing to another year of unspectacular growth for trucking in 2007, says Canadian trucking’s top lobbyist on the first say of the OTA annual convention, but there will be growth all the same.

“The economist in me says that modest, sustainable growth is better than wide, boom-bust swings in the business cycle anyway. However, in an industry whose growth has outpaced that of the economy virtually every year since World War II, it is hard to accept sluggishness,” he says in a communiqué to the industry. “This is especially true when only a few short years ago, the industry was experiencing — for the first time in decades — a capacity crunch which in turn provided the impetus for concerted efforts to improve the rate structure.

It may be slowing down, but sustainable growth is
better than boom and bust swings anyway, says Bradley

In his view, the economy is churning out precisely the right amount of freight given current levels of aggregate demand, but the problem is, “and this has been a chronic industry issue, there are perhaps too many trucks chasing that freight.”

This is particularly true in certain sectors, which are more susceptible to exchange rate fluctuations or changes in consumer buying patterns, such as automotive manufacturing, pulp and paper. “It’s not surprising then that bulk haulers are in general busier than van operations, which tend to be more susceptible to capacity swings.”

While 2007 should still see modest growth, the prospects for the U.S. economy remains a wildcard, says Bradley. “Over the past couple of years, the industry has already had to adjust to shifting traffic patterns, where shipments from the U.S. in many cases displaced exports to the U.S. as the headhaul. Canada’s trade surplus with the US has shrunk significantly. Yet Ontario’s economic prosperity is still overwhelmingly dependent upon exports to the U.S.

“The US government’s fiscal imbalance is soaring into the stratosphere. Consumers are in debt up to their eyeballs. However, one thing that history gas shown us is never to count out the US economy. This bears watching.”

It could be a rough ride at times next year, says Bradley, but he says he remains on balance optimistic. “Despite its problems, the economy has shown more resiliency than perhaps we anticipated. Capacity will continue to be an issue and trucking will continue to be the preferred and predominant choice of shippers. As always the trucking industry will rise to whatever challenges are thrown its way.”