U.S. Freight Tonnage Hits Record; Canadian Truckers Raise Rates

The American Trucking Associations (ATA) reported its April tonnage index rose 2.2% to a record high. In 2003, trucks hauled nine billion tons of freight or 68.9% of all freight hauled, according to the ATA. The trucking association also said motor carriers had collected $610 billion from shippers in 2003. While concerns over limited capacity have been on the rise, Bill Zollars, CEO of Yellow-Roadway Corp. said that the combined carriers have about 10% excess capacity. According to a report in Bloomberg News, Zollars said this would allow the company to handle the economic recovery through 2005. Meanwhile, north of the border, the Freight Carriers Association of Canada (FCA) said less-than-adequate profit levels, along with increased labor, insurance, security and other costs, are behind an announced 5.8% trucking rate increase.

With little excess capacity, major cost increases in labor, insurance, security and other non-labor cost components will further reduce that capacity, according to the FCA. The industry needs to invest in drivers and equipment to maintain current capacity levels and meet future demands as the economy rebounds. "The service levels that shippers currently receive and expect can only be maintained if the trucking industry's profits can attract investors," said the FCA announcement.

Labor costs have increased 5.8% on an annual basis, even before the effects of hours of service rules have been calculated.

Fuel costs have been, and should continue to be handled by the fuel surcharge program, FCA commented. FCA's Tariff Advisory Committee (TAC) reviewed current market conditions and cost studies conducted by FCA and has recommended a freight rate increase of 5.8% should become effective Monday, July 5, 2004. TAC also emphasized the need for carriers to charge for all services performed.

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