Leaders from Canada’s largest fleets say the freight economy remains stuck in a difficult cycle, with no near-term relief expected until capacity finally leaves the market. Carriers have little choice but to manage costs with discipline, protect core talent and simply endure until supply and demand realign.
Murray Mullen, president and CEO of Mullen Group said that market conditions are unlikely to improve quickly, and carriers need to be realistic about how long the downturn may last.
Speaking during a panel discussion at Ontario Trucking Association’s (OTA) 99th annual conference in Toronto, he added that survival remains the priority as some privately held fleets weigh whether to sell in a soft rate environment.
Freight volumes are not the primary issue, but rates are, and shippers continue to hold most of the leverage. His message to operators was to stay focused on cost control and prepare to ride out a prolonged stretch of weaker revenue.
Steve Brookshaw, senior executive vice president, TFI International, offered a similar view, saying the recovery hinges entirely on capacity leaving the system. He said carriers must keep investing in the people they will need when demand returns, even as they cut other controllable expenses.
Automation in warehousing
Automation will continue expanding, particularly in repetitive and error-prone work, but he cautioned that striking the right balance is difficult because cutting too deeply risks being unprepared for the eventual upturn.
Panel moderator Avery Vise, vice president, FTR Transportation Intelligence, noted that truckload employment has already slipped but cannot fall much further without compromising a fleet’s ability to react once rates begin climbing. He also asked the executives about the impact of tariffs, given that freight volumes have not meaningfully changed.
Mullen said that tariff concerns have been overstated. While sectors such as steel, aluminum and some automotive segments faced more pressure, he said the broader market has not experienced major disruption. Uncertainty, not tariffs, is the larger drag on investment. He said constant policy swings discourage capital spending, and the industry can adapt to almost any rules as long as governments provide consistent direction.
The future of CUSMA
Brookshaw said the larger threat is not individual tariffs but the future of CUSMA (Canada-United States-Mexico Agreement) itself. If the agreement were weakened or abandoned, he said cross-border transportation would face significant challenges. He warned that investment depends on predictability and that the sector needs the stability CUSMA provides.
Both executives said Canada-U.S. negotiations should occur quietly to avoid unnecessary anxiety. Regardless of political outcomes, Mullen said freight will keep moving and the industry will adjust.
The panel also confronted the persistence of the Driver Inc. model. Mullen said it is too narrow to blame the industry’s problems on a single issue. Trucking has always been entrepreneurial, he said, and many operators entered because they were earning money.
Lack of clear, enforced rules
The deeper problem, in his view, is the lack of clear, consistently enforced rules. He added that the uneven playing field allows customers to exploit compliant fleets. If regulators choose to allow certain structures, he said carriers will adapt.
Brookshaw said the U.S. system is easier to monitor because income is tracked through 1099 filings. Canada lacks an equivalent tool, and he said the effects of Driver Inc. vary widely across the sector. Flatbed and steel haulers feel the impact more acutely than specialized divisions.
Even if federal enforcement tightens, he said Driver Inc. operators will remain competitive, though a more level field could produce modest rate improvements.
A fragmented industry
Mullen added that the industry is deeply fragmented. Organizations like the OTA represent only part of the sector, while a large number of carriers operate outside association structures. He said entrepreneurial operators will continue pushing the edges of the model, and over time market forces will correct some of the imbalance.
Maintenance costs, equipment failures and greater driver awareness of the pitfalls in certain arrangements will eventually exert pressure. Government action could speed up that process, he said, but economics will ultimately guide the transition.
Credit: Source link
