Canadian Freight Costs Rose 1.8% in First Half of 2010

The cost of ground transportation for Canadian shippers increased slightly during the first six months of 2010, indicating that the market may have bottomed out
Sept. 9, 2010
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The cost of ground transportation for Canadian shippers increased slightly during the first six months of 2010, according to the Canadian General Freight Index (CGFI).

Overall freight costs increased by 1.8% from December 2009 to June 2010. Base rates, which exclude the impact of fuel surcharges assessed by carriers, also increased by 2.2%. Average fuel surcharges decreased marginally from 14.7% of base rates to 13.4%, which buffered the effect of the increasing base rates.

In addition, overall freight costs for June trended upward, increasing 1.9% when compared to May and 3.2% compared to April.

According to Alan Saipe, president of consulting firm Supply Chain Surveys Inc. and one of the developers of the CGFI, "While rates continued to trend downward in the first quarter of 2010, we have seen two successive months of increases, which may indicate that we reached bottom in April, although it is still too early to know for sure."

"Most of the increases are in the domestic truckload sector," adds Doug Payne, president of Nulogx, which sponsors the CGFI. "If fleet operators have eliminated their excess capacity, they may now be looking to secure price increases in this more volatile market segment."

CGFI results are derived from a database consisting of more than 5 million audited freight invoices, representing more than 100 corporate operating entities and approximately 1,000 carriers. Approximately 20% of transactions are to or from the United States, with a smaller percentage of transactions in US currency.

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