Freight Rates Are Stabilizing in Canada

Current results published by the Canadian General Freight Index (CGFI) indicate that although the cost of ground transportation for Canadian shippers declined by 9.6% since December of 2008, freight costs appear to be stabilizing in early 2010.

From December 2008 to December 2009, base rates, which exclude the impact of fuel surcharges assessed by carriers, fell 7.8% and average fuel surcharges also fell by a total 13.1%, resulting in an overall decrease of 9.6%.

“During the first eight months of 2009 there was significant volatility in freight costs; however, it appears that the index has begun to stabilize,” says Alan Saipe, president of Supply Chain Surveys Inc. “While there are slight pressures in base rates, these are being offset by modest increases fuel surcharges.”

In December 2009, overall freight costs rose by 0.2% when compared to November. Base rates, which exclude the impact of fuel surcharges assessed by carriers, fell 0.1%. This small reduction was offset by a 3.7% increase in average fuel surcharges when compared to the prior month. December’s stabilization has been consistent since September 2009, with freight costs having varied by only 0.4% in total.

“This data correlates well with the prevailing opinion that our economy is slowly starting to recover from the recession that started more than 18 months ago." says Doug Payne, president of Nulogx. “The continuous flat-line performance over the past few months suggests that carriers have adjusted their operations to match changing market demands, and that we will continue to see stable freight prices in the near future.”

The CGFI is sponsored by Nulogx, a provider of transportation management solutions, and is used by shippers and carriers to benchmark performance, develop business plans and secure competitive agreements. It was developed with the assistance of Alan Saipe.

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