Ole! Carriers in bull-riding mood again: OTA e-pulse

TORONTO — Even though freight volumes softened last quarter, over 60 percent of Canadian carriers say freight levels have increased over the last year, leading to unprecedented levels of optimism among fleets since the fall of 2008.

So says the Ontario Trucking Association’s first quarter 2011 Business e-Pulse Survey, which indicates that 75 percent of carrier respondents are feeling optimistic "about the trucking industry’s overall prospects for the next three months" — up 13 percentage points from the 4Q10 survey.

Perhaps even more telling, only 4 percent of respondents are pessimistic about the coming months.

Just over 20 percent said they were unsure — reflecting, says OTA, "a degree of continued fragility in the marketplace no doubt in part due to ongoing questions about the strength of the US economy."

There was also an increase in the number of carriers that reported loaded miles are increasing (39 %), while the majority (53%) says there was no change and the average length of haul is also the same (75%). 

Ask An OTA Trucker: And he’ll tell you
the sky looks much clearer for 2011

The positive sentiment for the near future is especially good news considering the majority of carriers reported that freight volumes haven’t really picked up in the last three months within Ontario, inter-provincially and cross-border.

Southbound U.S. freight continues to be weak. Twenty-three percent say that volumes have decreased compared to the previous period.

Respondents also reported some softening in northbound US freight. Forty-five percent still indicate volumes are improving, but that is down 9 percentage points from last quarter.

RATE-CAP

While southbound U.S. lane rates remain weak — with 32 percent saying pricing is actually lower (up 10 percentage points from last quarter), the majority of carriers characterized the freight rate environment across Ontario and Canada as stable.

Overall, OTA reports there are continued indications of capacity tightening. Over three-quarters of respondents said that capacity had either decreased or stayed the same in the previous quarter and expected the situation to remain almost identical over the next 6 months.

TRUCKS & DRIVERS

About 45 percent indicate they plan on adding more tractors this quarter, which is consistent with recent surveys. The number of carriers who reported they plan on buying more trailers increased 11 percent to 46 percent.

As for manpower, "it appears that carriers are at a bit of a crossroads in terms of whether to begin hiring or not, with the industry pretty much split down the middle," says OTA.

Overall, 47 percent said they plan on hiring company drivers, while 39 percent say they’ll start interviewing more owner-ops.

SHIPPERS

If there’s any indication that the looming driver shortage is real, it’s that shippers believe it.

Fewer carriers are reporting payment problems from their customers, who are reportedly handing some buying leverage back to carriers as an attempt to secure capacity.

The majority of carriers (88%) say they are satisfied with fuel surcharges. Only 18 percent say it’s taking shippers longer to pay — the lowest level since OTA began its survey in 2008 and well off the peak of 59 percent in 3Q09.

Although most report no change, almost a quarter of respondents said shippers are lengthening the terms of contracts.

CREDIT CHECK

Access to credit also appears to have stabilized, with 75 percent reporting that there has been no change in access to credit (up 11%). However, only 13 percent said credit is tightening (the same rate as those who said it is easing), compared with 58 percent who believed banks had tightened the purse strings in the 6 quarters starting in 4Q08.