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Month: November 2014

Ontario carriers are optimistic

Ontario carriers continue to be optimistic regarding freight volumes and rates.
The Ontario Trucking Association’s members’ opinions on fourth quarter reports on the North American freight environment remain confident even though the second quarter had exceptional highs. The Ontario Trucking Association added that there is a continued level of enthusiasm, post the recession uncertainty that lingered for years over the industry is in the rear view mirror for the majority of carriers.

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This is how Ontario fleet executives differentiated the market conditions in the fourth quarter review.

Intra-Ontario said freight volumes have improved by 47% of respondents in the past three months which is up from 6% from the second quarter review.
Carriers reported a decrease in volumes of 3% in Ontario, which is an all time low. Intra-provincially carriers who said volumes increased, were down 6% from the last survey yet it was still the second best response since 2011.
Looking ahead, 29% of carriers anticipate improved volumes in the next six months compared to the 3% in the last survey.

Rates in Ontario are expected to increases by 45% of respondents, making the highest level recorded, a 14% increase over the previous survey. Thirteen percent of carriers expect to see softer rates north into Canada, yet 33% anticipate increases.

Expectations are largely unchanged for 45% of respondents, although 27% have experienced capacity increases of the last quarter. Looking ahead, 84% of carriers don’t expect changes and 42% expect further tightening. Still, 82% state customer contracts are not lengthening in spite of warnings in the shortfall of drivers and documented shipper concerns on truck service convenience.
On that note, 59% of carriers plan to add drivers; though based on recent trends, the majority are by replacement demand, not expansion.

Carrier costs are affecting capacity levels leading many carriers to increase wages for drivers, adding to the largest cost. In the forth quarters 2014 survey 78% reveal driver pay is increasing around 10%.

Overall, the top concerns are; driver shortage with capacity and rates being the second highest concern. The lowest number was the economy which is nearly half from 2013’s survey.

Natural gas truck market growing slowly

The choice to use natural gas alternatively to diesel fuel in the heavy-truck segment is expected to grow, but at a slower rate than first anticipated.
According to reports from ACT Research and NG Reality Check these are their findings;

At first reported by ACT they projected faster growth for natural gas trucks, however with lower diesel pricing it has had an impact.
This doesn’t mean natural gas has not grown; it will continue to grow but at a slower pace in the next few years. Truck and transit bus was 3% in 2013 but should reach 4% in 2014.

ACT is projecting natural gas vehicles will represent 23% of Class 8 truck and bus vehicles sold by 2025. This is a large quantity that will be shared by those aware and accepting of tomorrow’s truck transportation needs with a plan to get there.
With the emissions and greenhouse gas needs and regulations in place in the coming years, Ken Vieth, ACT Research’s senior partner and GM believes achieving those needs, natural gas penetration could be much higher since natural gas is equally available, cleaner and cheaper (cost per mile) fuel than diesel.