Trucking rates are under high pressure

Is this some sort of ”anarchic wit” from the trucking industry following the introduction of ELD’s in the USA this past December? That said, there are other factors also explaining the rate increases
in North America.

Electronic logging devices :

The ELD technology introduced in December 2017 by the USDOT has had a direct impact on the trucking industry . For one, it has accelerated the shortage of drivers able to drive on US territories. Many of the aging canadian drivers have simply opted for retirement or migrated towards intra-Canada and local transportation (less regulations).

Based on supply and demand, shortage equals higher costs! The sudden impact of ELD have been a key factor in the overall rate increase of transportation services. Be aware that the canadian trucking industry is now advocating for similar technology north of the border. Such regulation will certainly have a similar impact on the rates in our country.

Strong economies :

The shortage of transportation assets is also fueled by the strong economies both north and south of the border. The more we sell (or buy), the more we ship, and the more we use transportation assets. In doing so, we accelerate the shortage of assets and drivers. Let’s remember that shortage equals higher costs!

The ”amazon effect” :

Such effect has been seriously felt in our industry for the first time this past December and it is resuming. Online purchasing is pulling a lot of drivers out of the long-distance community and attracting them to the local transportation providers such as Fedex, Purolator, Ups and others.

Conclusion :

These factors have evidently caused issues to your logistics budget, and such budget swings will undoubtedly cause inflationary pressure and unfortunately force an economic slowdown. Considering the shortage of drivers, it is key for our industry to make itself more attractive to the young generation. We must evolve and promote our industry as an attractive long-term career option.

At AP International, we are proud to be an important actor in this wonderful industry. We look forward to
tackling the many challenges ahead. We are especially proud of our partnership with the education sector in the province of Quebec. Over the last few years, we have welcomed a number of interns from the logistics program and we will continue to do so in the years to come!

AP International is a leading canadian freight broker offering road, rail, air and ocean transportation services. AP has been helping its clients manage their logistics projects since 1995. We understand the pressure caused by the sudden rate hikes. You can most definitely count on us to maintain a solid grip on these inflationary rates.