Semi-Sweet ’16: What 2016 Holds for the Trucking Economy of Canada

01.08.16 | Peter Carter, Today's Trucking

“It looks like Ontario and B.C. will be the growth leaders for Canada,” Scotiabank’s Chief Economist Warren Jestin told Today’s Trucking in early December, adding “although it’s not a hard race to win.” 

A few weeks earlier, Jestin gave the Toronto Trucking Association (TTA) his outlook for 2016 and it was laced with the same tepid enthusiasm.

Jestin’s counterparts at the Canadian Imperial Bank of Commerce (CIBC) agree. 

According to a recent CIBC report, British Columbia’s economy should grow by 2.8 percent next year and Ontario’s by 2.4 percent. Alberta is probably going to grow by only 0.7 percent; and that’s after a"get this"contraction in 2015. Of 2.4 percent.

“Provincial fortunes have been turned on their head,” says Avery Shenfeld, chief economist, CIBC World Markets, who co-authored the report, Provincial Outlook: The Changing of the Guard, with economists Nick Exarhos and Andrew Grantham.

The brighter news is coming out of B.C. and Ontario. And the fact that Canada’s economy is tied to America’s, because the American economy insists on bubbling along, showing signs of real, albeit muted, growth.

And the news from south of the 49th parallel?

In mid-December, the transportation consultants at  FTR & Associates announced that their proprietary trucking measuring stick, the Trucking Conditions Index, fell by more than three points from September to a reading of 5.06, but 2015 numbers had been better than expected, and FTR is forecasting three-percent or better growth next year.

FTR expects conditions to improve for truckers in 2016 as shippers become concerned with tightened capacity in the second half of next year.

Shippers are currently choosing capacity over cost savings due to low fuel costs. However, when the price of fuel begins to rise next year, FTR expects it to be difficult for trucker base rates. Trucking conditions are also expected to be affected by certain future regulations and rules.

“The trucking environment has slowed during 2015, but compared to recent history it is still operating at a reasonable level,” said Jonathan Starks, chief operations officer at FTR. “We expect conditions to improve as we move through the year as the market further prepares for tight truck capacity when the HOS, ELD, and speed governor rules are implemented over the next two years.

In a mid-December discussion on Trucking in 2015, FTR’s Senior Consultant Larry Gross underscored all his forecasts with a new-world caveat.

The North American transportation system is extremely fragile and “things can turn on a dime.”

“The transportation world has demonstrated in 2015 that it is volatile. Trying to forecast is like trying to catch a falling knife. A return to the good old days is not going to happen.” 

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