Canadian trucking rates bottoming out

The cost of ground transportation in Canada is starting to bottom out, according to new statistics compiled by the Canadian General Freight Index (CGFI). Overall ground rates for Canadian shippers dropped in the first six of the first seven months of 2009, declining a further 1.7% in July, with over-the-road transportation costs down 15.6% in July, when compared year over year, and 9.8% versus the end of 2008

The cost of ground transportation in Canada is starting to bottom out, according to new statistics compiled by the Canadian General Freight Index (CGFI). Overall ground rates for Canadian shippers dropped in the first six of the first seven months of 2009, declining a further 1.7% in July, with over-the-road transportation costs down 15.6% in July, when compared year over year, and 9.8% versus the end of 2008.

Yet according to Alan Saipe, president of Supply Chain Surveys and an analyst of the transportation and logistics industry, trucking rates should not fall any further this year. "Cross border TL and LTL rates declined sharply in July, while domestic rates were more stable … [but] rate declines of this magnitude are not likely to continue,” he said. “We expect freight costs will find a bottom in the fall of 2009 as the economy works its way out of recession.”

According to the most recent CGFI data – a service supported by transportation solutions provider Nulogx and developed in partnership with Saipe – year-to-date reduction in Canadian shipper costs is the result of the combined impact of declining fuel surcharges and reduced base rates charged by carriers.

In July, base rates declined 5.9% when compared to the end of last year, and 2.7% versus the prior month. But that reduction in costs would have been even greater if fuel surcharges hadn't continued their recent upward movement, increasing by 10.5% in July to an average of 12.4% of base freight Costs.

This level however is still lower than the 16.3% average experienced by Canadian shippers at the end of 2008, noted Saipe.

The most recent CGFI results are available at: www.cgfi.ca

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