Freight market update, 1 November 2021

Canadian freight pricing is set to climb

We have seen sharp price increases in the US domestic markets while Canada has seen minimal increases.

The US government support was also light compared to the Canada Emergency Wage Subsidy program that pumped 95 billion into the Canadian market.

That has now ended and we will continue to see prices rise as capacity in the Canadian and Cross Border trucking market tightens due to loss of driver capacity.

The price of freight in Canada is poised to surge higher as demand continues to outstrip the capacity to move goods and government wage subsidies end, the CEO of one of the country’s largest trucking and logistics firms said.

Fact check: 170 ships waiting off Long Beach and Los Angeles

The last time our newsletter went out there were just under 70 ships at both ports.

Now at 170 ships, the holiday backlog looks to be taking its toll in Long Beach and Los Angeles.

We have been seeing containers diverted to Vancouver and other West Coast ports to avoid major traffic jams.

There have also been reports that importers are battling mold as the prolonged transit times are increasing humidity inside the containers, this obviously does not help the supply chain in any way.

As two ports in California work around the clock to alleviate the backlog of cargo ships waiting to unload, some social media users are claiming the backup numbers in the hundreds of thousands.

The driver shortage, and what a shipper can do about it

Want to see freight rates go down with a driver shortage? good luck..

The industry has always battled driver shortages, but this one is serious especially if a vaccine mandate is enforced.

With the increased supply chain pressure, we could see governments stepping in to reduce barriers for transport companies to operate.

If there is one thing a shipper can do to help the cause, it's to make sure they load and unload trucks at facilities as soon as humanly possible. Waiting times are killing this industry. Driver logbooks are federally monitored, and we could possibly see the government stepping in around enforcement issues due to productivity.

The US trucking industry needs at least 80,000 drivers – a number that could double by 2030.

What insulates a Canadian carrier from the US market

Being a Canadian trucking company has its benefits and its challenges.

Most American carriers don't want to deal with the border and quite honestly might not pass driver admissibility requirements. This somewhat insulates Canadian trucking companies from the massive US operations, not to mention Canada is a very small market.

Canadian freight companies are often more competitively priced than their US counterparts, this also helps with the insulation.

One other factor is the extremely rugged terrain in BC and Alberta that would have the majority of drivers white-knuckling in some of the best weather.

Cross-border trucking opens up many new horizons for drivers. But on top of the additional earning opportunities comes greater scrutiny, and a new set of rules and regulations to understand.