Freight carriers’ group urges rate hike close to 5%

FORT ERIE, Ont. — Despite the trucking industry’s cost cutting measures during this recession, fixed and variable costs continue to rise and carriers should be looking for raises of at least 4.9 percent this spring.

That’s the latest recommendation from the Tariff Advisory Committee (TAC) of the Freight Carriers Association, which monitors economic conditions affecting the industry’s profitability and issues rate recommendations, suggests the increase should take effect by March 29, 2010.

"The continuing economic recession is taking its toll on the trucking industry. Declining volumes and fierce competition has forced industry earnings well below acceptable levels. The industry is not generating sufficient income to re-invest in their businesses," FCA stated in a press release. "Re-investment is essential for truckers to continue to provide service and to meet their customers needs. The industry needs to have the ability to attract the capital required for re-investment."

Especially hard hit are equipment costs, which will rise dramatically due to the new U.S. EPA standards for the 2010.

The FCA excluded fuel surcharges from its cost change analysis.

"Experience has shown that the most efficient method of handling fuel cost changes is through the use of fuel surcharges that fluctuate with the price changes."

While Ontario-based TCA’s work is based mostly on central Canadian freight economy conditions, the general analysis could easily apply to most Canadian fleets facing cost and pricing pressures.