Ontario Trucking Association

Ontario Trucking Association

April 23, 2009 16:15 ET

2nd Quarter 2009 Survey of Bellwether Trucking Industry Indicates Continued Tough Times, But Perhaps First Signs of Stability

Most trucking companies still think economy has not reached bottom, not seeing signs that government stimulus is having desired impact just yet

TORONTO, ONTARIO--(Marketwire - April 23, 2009) - A survey of companies in the trucking industry, long considered a key bellwether of economic activity, shows the freight market continues to be hit hard by recessionary pressures, but it also may be showing the first indications of stability. The results are contained in the Ontario Trucking Association's 2Q09 Business Pulse e-Survey conducted between April 6th and April 20th.

Of the 74 trucking companies, of all sizes and from all industry segments, who responded to the OTA survey, the largest proportion (43%) said they were pessimistic about overall industry prospects over the next three months, but this is down from 52% in the 1Q09 survey. Moreover, the percentage of trucking companies that are optimistic about industry prospects rose to 27% from 17% in the previous quarterly survey. 30% said they are unsure of where things are heading.

'While we have a long way to go and more carriers remain pessimistic than optimistic, the narrowing of the gap between the two is perhaps an early signal that things may be stabilizing but it would be unwise to make that claim on the basis of one quarter's results," says OTA president, David Bradley.

As it stands today, 75% of the survey respondents still think that the Canadian economy has yet to hit bottom; 81% say the same goes for the Ontario economy. The majority (71% for Canada, 72% for Ontario) say they have yet to see any indication that the government stimulus programs are working.

The freight market - keep in mind that trucks haul 90% of all consumer products and foodstuffs as well as two-thirds of Canada's trade with the United States - continues to be characterized by decreasing volumes in most traffic lanes. Overall, 62% of respondents said that freight volumes had declined by more than 20% over the past year and another 27% said declines were between 10% and 19%. The proportion of trucking companies expecting freight volumes to improve over the next 6 months is still very low at 21%, although that's up slightly from the 1Q09 survey. More (27%) still think freight volumes will deteriorate over the next 6 months, but that is down from 42% at the beginning of the year.

"Things remain ugly, an indication of continued economic weakness," says Bradley. "But, in this survey more carriers are expecting freight volumes to either stay the same or improve over the next 6 months than those who expect it to deteriorate, which is a hopeful sign. However, if the automotive industry fails or things get worse in the US, all bets are off."

The industry is trying to cope with the economic crisis by managing its cash wisely and by reducing capacity. But, according to Bradley "it's a game of catch-up right now since the rate of decline in freight volumes has outpaced the rate of decline in capacity in recent months." This is evidenced in the survey. 38% of respondents said capacity has been reduced in their segment of the industry over the past quarter, but this is down somewhat from 46% who responded to the 1Q09 survey. 41% (compared to 25% in 1Q09) of respondents said that capacity has increased in their segment. According to Bradley, this could reflect capacity that has been shifting out of certain industries like automotive or north-south traffic into domestic laneways. However, he says "one thing is sure, when we come out of this mess, there will be less capacity in the trucking industry and those shippers that have tried to take advantage of the current situation may find themselves having a hard time finding anyone interested in hauling their freight."

Ontario Trucking Association (www.ontruck.org) -- is a business association representing motor carriers operating into, out of and within Ontario. The trucking industry is one of Ontario's largest employers. Trucks haul 90% of all consumer products and foodstuffs produced and consumed in the province and 80% of Ontario's trade with the United States. Founded in 1926, the association's membership comprises trucking companies of all sizes, shipping all types of commodities, from all regions of North America. OTA is a member of the Canadian Trucking Alliance www.cantruck.ca.

Contact Information

  • Ontario Trucking Association
    Doug Switzer
    VP Public Affairs
    (416) 249-7401 x 238