Canada’s trucking industry is seeing low profits and high costs coming out of the pandemic due in part to fewer shipments and a lower freight rate. 

The industry also faces a drop in consumer demand, especially in relation to how much people were buying and having delivered during the lockdown.  

“It’s slow right now, not too many loads,” said Jas Singh, 45, who owns the Brampton-based trucking company JK Transport.

Singh said that prices in the industry have shot up, saying that the price of buying a new tractor now is $225,000, an enormous jump from what he paid for in 2019, costing him $135,000. Singh also mentioned that trailers for his fleet are now twice the price, at $80,000 each.

Last year, he could charge $2.30 per mile and now Singh can only charge $1.50 per mile for deliveries. “A lot of problems this year,” he said in a phone interview with the Globe and Mail.

Trucking HR Canada released a report that revealed the industry let go 7% of its overall workforce in the beginning of 2023, over 20,500 jobs. 

“As the economy has essentially softened a little bit, so has demand for trucking services,” said chief programs officer Craig Faucette for Trucking HR Canada.

Drop in freight demands has alleviated the industry’s labour shortage during the pandemic, however the industry faces new challenges from the decline as well. 

“As things opened up, we saw a slight downturn as people returned to travel, restaurants … as opposed to the items to renovate their houses or their backyards,” said Mike Millian, president of the Private Motor Truck Council of Canada.

Consumers are also less likely to make purchases as a result of rising interest rates and overall inflation. “You need less trucks to move it because there aren’t as many goods moving,” said Millian.

“You’re seeing a lot of smaller fleets struggling, especially ones that rely on what we call the spot market,” continued Mr. Millian, referring to single shipments as opposed to long-term contracts or regularly scheduled shipments. 

The U.S. has seen an even bigger drop in shipments, which also affects Canadian truckers as they often won’t have loads to haul back to Canada after making a delivery south of the border.

“We wait for one to three days for it to come back,” said Singh, talking about preload wait times for his shipments to California.

Yellow Corp, an American trucking company in the U.S. filed for bankruptcy in August, after 94 years in business. John Gradek teaches supply chain management at McGill University and he said that Yellow Corp’s bankruptcy was just the “tip of the iceberg.”

“You have a number of carriers that are in very, very tight financial scenarios,” said Gradek.

Truckload carriers that take multiple loads of cargo to be delivered to different clients, known as less-than-truckload (LTL) operations, are even more vulnerable than truckers who have stable contracts that they can rely on. 

Gradek said that the “mom-and-pop shops” of trucking companies have to bid daily for shipments through different apps like Freightera and FreightSimple.

There are even some large scale companies relying on LTLs as well, like TFI International, based out of Montreal, who employs over 25,000 people and has more than 11,000 tractors on the road. “Our Canadian LTL revenue is down big-time,” said CEO Alain Bedard.

Bedard said that while the drop in LTL operations was unexpected, it’s not unique to just that type of shipping. 

“We never anticipated such a major, major disruption in the market in Q2,” said Bedard. “Everybody’s going through a sort of very tough patch in the freight environment.

In the first six months of 2023, total revenue in the trucking industry fell by 22% compared to that same time period in 2022. Additionally, the B.C. port strike in July also added strains to the industry, according to Bedard.