Canadian trucking rates bottoming out

TORONTO — Freight rates in Canada shouldn’t fall any further this year as the economy slowly works itself out of recession, according to the latest stats from the Canadian General Freight Index (CGFI).

"There has been a clear trend toward reduced transportation costs for Canadian Shippers," says Dr. Alan Saipe, president of Supply Chain Surveys, which complies the index along with Nulogx. "Lower fuel prices, excess carrier capacity, and a highly competitive marketplace created a "perfect storm" for Canadian carriers and shippers have benefited as a result." 

From CFGI report

Still, Saipe is confident that bargain basement rates have hit bottom.

"Cross border TL and LTL rates declined sharply in July, while domestic rates were more stable. The combined result maintained the downward trend in both rates and costs into July. Rate declines of this magnitude are not likely to continue."

Overall, ground rates for Canadian shippers dropped in the first six of 2009, declining a further 1.7 percent in July. Over-the-road transportation costs are down 15.6 percent in July, year-over-year, and 9.8 percent versus the end of 2008.

In July, base rates declined 5.9 percent when compared to the end of last year, and 2.7 percent versus the prior month.

The reduction in costs, though, would have been even greater if fuel surcharges hadn’t continued their recent upward movement, increasing by 10.5 percent in July to an average of 12.4 percent of Base Freight Costs.

"This level however is still lower than the 16.3 percent average experienced by Canadian shippers at the end of 2008," the report stated.