President Donald Trump’s process of threatening then postponing tariffs on goods coming into the U.S. has created problems for the Canadian trucking industry.
The Canadian Trucking Association this week said a recent survey found carriers belonging the CTA or provincial association boards, indicate “current business conditions are perilous.”
A statement from the association said almost 70% of respondents indicate loads to the US have been cancelled or paused, and include most commodities like lumber, oil products, fertilizers, farming equipment, tires and general food products.
Many report tariffs are essentially bringing trade to a halt, as customers and suppliers struggle to figure out the actual declared product value, who pays for these additional costs, and customers adjusting to just-in-time/emergency delivery options to manage costs associated with tariffs.
Alternatively, counter tariffs are seemingly having little effect on Canadian imports to the US, as 70% of carriers report no impact on demand for northbound freight.
While only a small percentage (8%) of trucking fleets have announced layoffs, almost 70% of carriers said they are monitoring the size of their labor pools. Even more concerning is the fact that many carriers (60%) state that a prolonged trade war could put their business operations at serious risk, according to the CTA.
“About 80 percent of Canada-US trade moves by Canadian trucks,” said CTA President & CEO Stephen Laskowski. “We are now entering a business cycle with a tremendous amount of uncertainty brought on by tariffs. This is further compounding poor economic conditions prior to tariffs being implemented, an underground economy that is wiping out competitiveness in the Canadian trucking industry and an artificial rush to get product over the border to avoid new tariffs.”
“Our members’ customers are facing a precipitous drop in demand for their goods which could leave trucks parked on the sidelines indefinitely. More bad news could be the breaking point for many in the industry.
“Once capacity is drained from the cross-border sector, it will be dumped into the Canadian market, creating unsustainable business conditions and a nuclear winter for Canada-U.S. freight movement. The Canadian economy, and the trucking industry that fuels it, are entering a dangerous point in history, leading to a game of attrition where companies compete to see who can hold on the longest before declaring insolvency.”
The Canadian Trucking Alliance said it has made several recommendations to the Council of the Federation to help address this situation, including the removal of internal trade barriers, tax and labour code changes and addressing the out-of-control underground economy in the trucking industry.
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