A key measure of Canadian truckload freight on FreightWaves’ SONAR platform has recovered by roughly 27% since hitting a low two weeks ago.
The Outbound Tender Volume Index – Canada (OTVI.CAN) hit 9,631.88 on Tuesday, April 28. The index has trended higher since reaching its April 15 low.
While a traditional post-Easter bounce may explain some of that recovery, it appears to have continued. Toronto, Montreal and Calgary are the strongest performers.
“We saw a decline, and then over the last two weeks, we’ve definitely seen things coming back,” Shawn Girard, CEO of Quebec-based trucking and logistics company Energy Transportation Group. “But we’re not back to 100%.”
The rebound came as Canada’s provinces prepare to begin re-opening portions of the economy in May.
“I think businesses started to realize that things will return to normal,” he said.
Low rates in the spot market, however, continue to put carriers and owner-operators under pressure.
“We haven’t seen rates this low since maybe 2007, 2008,” Girard said.
Did you know?
The U.S. Strategic Petroleum Reserve contains more than 600 million barrels of crude oil and has capacity for an additional 200 million barrels. Logistics professor Darren Prokop notes in a FreightWaves commentary that it’s up to Congress to fund additional purchases.
“What we see with the states is there’s a patchwork approach and that there is a degree of uncertainty.”
– Daniel Boccio, risk intelligence analyst at Resilience360, discussing COVID-19 disruptions to North American supply chains.
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The recovery in Canadian freight also came as the federal government began accepting applications for a program to subsidize up to 75% of businesses’ wages. Trucking companies that don’t meet the eligibility criteria are asking the federal government to temporarily defer payroll tax withholdings to preserve cash flow.
Hammer down, everyone!