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. Seventy-three percent 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. 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 percent of brokers said the increase in load volumes positively impacted their business, while 31% said it was negative. Only 38% of responding carriers said their expenses increased in 2017, compared to 2016. The technology was a key area of investment for carriers, with 71% saying they invested in technology. Fifty-two percent 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. “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 the 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 the 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 percent of responding carriers and brokers said the “Trump Effect” had no impact on their businesses. More than half of carriers and brokers felt freight volumes, rates, and fuel prices would rise in the first quarter of 2018.