TORONTO, Ont. – Canadian carriers and brokers benefited from a strong
market in 2017, and are optimistic about the current year, according to
a new report from TransCore Link Logistics.
TruckTalk: Load volumes, investments, profit margins summarizes
findings from a survey that was sent to the head of every business in
the company’s database. Seventy-three per cent of respondents were
carriers, while 27% were brokers.
Most reported that the increase in load volumes seen in 2017
positively impacted their businesses, including 54% of carrier
respondents. They indicated the increase in load volumes allowed them to
be more selective about their loads, allowing them to grow revenue.
However, 21% of carrier respondents said the increase in volumes had a
negative effect on their business, primarily because they didn’t have
sufficient trucks and drivers to keep up. Those carriers cited an
inability to find quality, experienced drivers, as a problem.
Forty per cent of brokers said the increase in load volumes
positively impacted their business, while 31% said it was negative.
Those who said they suffered from the increase in load volumes listed an
inability to find trucks and drivers as a challenge.
Only 38% of responding carriers said their expenses increased in
2017, compared to 2016. The survey found 80% of all respondents made
investments in 2017. Technology was a key area of investment for
carriers, with 71% saying they invested in technology.
Fifty-two per cent of carriers said they invested in trucks, and 45%
invested in new staff. Other areas of investment for carriers included:
building space; trailers; security; and electronic logging devices
Interestingly, 6% of brokers said they invested in new trucks.
“It is possible for brokers to expand into the carrier sector by
purchasing trucks,” TransCore noted. “With freight volumes at an
all-time high, brokers may be struggling to find trucks. This could lead
them to invest in a trucking division of their own.”
In terms of profit margins, half of carriers reported 5% or better
margins in 2017; with 40% between 5-15% and only 10% of carriers had
margins greater than 15%. This means half of carriers had profit margins
below 5%. But 82% of carriers said they are optimistic about 2018.
A quarter of brokers said their profit margins were above 15%, with 90% having profit margins greater than 5%.
Not surprisingly, carriers with higher profit margins were less
affected by the U.S. exchange rate. Seventy per cent of responding
carriers and brokers said the “Trump Effect” had no impact on their
More than half of carriers and brokers felt freight volumes, rates,
and fuel prices would rise in the first quarter of 2018. But concerns
remain. Changes to NAFTA, the driver shortage, and the ELD mandate were
cited about equally as top concerns.
“Even with these concerns, businesses having a positive outlook on
the future are certainly justified,” said the report. “The beginning of
2018 showed that load volumes are the highest they have ever been.”
Download the full report here.
Source of article click here : Truck News