The latest data shows stability, even signs of growth, returning to the for-hire trucking segment. Canada’s spot market was flat in November, but the truck-to-load ratio improved for carriers.
ACT Research sees growth returning to the for-hire segment, but private fleet insourcing continues to be a headwind. And shippers’ conditions deteriorated in October as fuel prices firmed up and trucking capacity tightened.
Canadian spot market becoming more ‘carrier-friendly’
The Canadian spot market was steady through November, according to the latest data from Loadlink Technologies. There were no significant changes, suggesting that stability is returning to the market after last year’s volatility.
Loadlink is predicting volumes to rise when December data is released, due to the holiday season.
Year over year, freight volumes were down 10%. Both inbound and outbound cross-border loads saw a small decrease compared to November 2023. But equipment postings saw a more drastic drop, falling 24% for inbound loads and 23% for outbound.
Domestic loads were down 1% from October and 12% year over year, but equipment postings dropped 10% from October and 26% year over year.
The drop in equipment postings pushed the truck-to-load ratio down to 3.19, from 3.64 in October and 3.68 last November. “This trend suggests that the market is becoming more favorable to carriers,” Loadlink said.
“November 2024 showed that the Canadian freight market is steady, with some challenges and opportunities,” Loadlink concluded. “While freight volumes are lower than last year, the market is stabilizing after recent disruptions. As the holiday season approaches, a rise in freight volumes is expected. The data suggests a more carrier-friendly market, with fewer trucks available per load.”
For-hire market finally showing signs of growth
ACT Research’s latest For-Hire Trucking Index suggests growth is finally returning to the for-hire market. Freight volumes pulled back in November, according to ACT, but October volumes were buoyed by post-hurricane freight surges and the brief U.S. port strike.
“Overall, the U.S. economy remains resilient, and freight volumes are growing,” said Carter Vieth, research associate with ACT. “Consumers continue to buoy the economy, and for the first time in six quarters, retailers’ inventories are starting to outpace sales after considerable destocking. The looming ILA [port] strike in January and threat of tariffs are likely to pull freight forward, but opaqueness regarding the timing and scale of tariffs may reduce the amount of pre-tariff shipping. While the retail sector is healthy, interest rate-sensitive sectors like manufacturing and construction are sluggish. Continued tight financial conditions are likely to slow some volume improvement.”
While capacity rose slightly in November, Vieth said “After two years of weak profitability, for-hire carriers aren’t in the position to add significant new capacity. Given the current volume and rate environment, we would anticipate for-hire capacity additions to remain at replacement levels, leaving the index at around current levels.”
Private fleets continue to insource more transportation, which has slowed the pace of recovery in the for-hire segment.
“Private fleet expansion, which is not captured in this indicator, has resulted in a longer period with the market close to balance than in past cycles,” said Vieth. “Disinflation and lower interest rates will support the consumer outlook, as rising goods demand and a turning inventory cycle have resulted in improved import volumes. Private fleets are handling an increased share of volumes, which has been the sticking point keeping the for-hire market from turning up. A slowdown in private fleet growth is necessary for further improvement in the for-hire market balance.”
Shippers see worse conditions
FTR’s Shippers Conditions Index dropped to 1.3 in October, from 4.6 in September. Blame firmer fuel costs and tighter trucking capacity.
FTR anticipates the index will stay positive for shippers in the near term, but will be more neutral soon, reflecting greater balance between shippers and carriers. However, it cautions that volatility could be in store given trade policy changes that could be seen under incoming President Trump.
“Announced tariffs on imports from Mexico and Canada and increased tariffs on Chinese goods along with other likely tariffs raise the level of uncertainty over market conditions for shippers in the near term,” said Avery Vise, FTR’s vice-president of trucking.
“We expect any additional pressure on supply chains and freight transportation due to changes in trade policy to be mostly temporary, but a few hiccups seem likely. Fortunately for shippers, transportation capacity is considerably more fluid than it was during the stressful 2020-2021 period.”
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