Although they have softened pricing in some sectors in central and Atlantic Canada, the Freight Carriers Association (FCA) is urging fleets to up their freight rates 4.9 per cent from April 2, 2007. For rates from and to Alberta, there should be an additional increase of 3 per cent.

The FCA’s Tariff Advisory Committee recommends that if the trucking industry is to attract capital and maintain capacity, there must be an increase in rates. The TAC meets regularly to keep tabs on the economic conditions and profitability of general freight carriers. Some of the factors that are influencing the increase in costs for the trucking industry are driver shortage, rise in labor costs and regulatory changes.

The FCA, based on info developed by Statistics Canada, expects that labor costs for trucking companies have gone up by 4.2 % annually. The new regulations that are effective Jan 1, 2007, are those analogous to the US situation, where the impact is expected to be 1 – 5 %, based on the carrier’s operations.

Costs in Alberta have shot up because of demand for labor in the oil sands and connected sectors and there’s no way the industry can absorb these. The increase of an additional 3% for Alberta will therefore offset these costs.

The impact of 2007 model engines will add another $10000 to the cost of a new truck, which is not included in the rates. Other costs that are excluded from the rates are those related to appointment deliveries, waiting time, protective service, border crossing, return of pallets and handling of dangerous goods etc. 

This entry was posted on Saturday, March 24th, 2007 at 6:23 am and is filed under Freight-World. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.