Several Canadian trucking companies are approaching the “ledge of a perilous freight cliff” due to dropping customer demand and mounting payment issues.
While public appreciation for carriers is at an all-time high, the Canadian Trucking Alliance (CTA) said many are struggling to find return freight leading to evaporating profit margins and the inability to cover the costs of their operations.
The CTA wants federal aid to provide relief to trucking companies whose operations have been severely strained by the impact of the pandemic.
“The Canadian trucking sector has worked as hard as it can during this crisis to ensure Canadians continue to have access to essential items such as food and sanitary products,” said CTA president Stephen Laskowski in an April 22 release.
“But it is becoming increasingly clear that as our industry continues to serve the supply chain and economy as required, it also faces unique and rapidly escalating challenges that require tailored solutions to protect the stability of the supply chain during the COVID-19 crisis and its aftermath.”
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Laskowski said the trucking industry needs a specific financial aid package that goes “above and beyond” the Canada Emergency Wage Subsidy.
“Although, the (subsidy) may work for many sectors, it does not stabilize the Canadian trucking industry.”
The CTA is asking for the government to introduce a Payroll Tax Deferral Program, providing fleets the needed cash to maintain operations.
The industry group also wants an increase in the meal allowance for all truck drivers facing rising costs associated with operating during COVID-19.
In the CTA’s survey of close to 100 members, on average, carriers have experienced a 27 per cent decrease in revenue.
The companies also report a 300 per cent increase in ‘empty miles’ when trucks are travelling but not generating any payload revenue.
Unless conditions improve, 37 per cent have significant concerns about whether they can remain in business.
Sixty-three per cent of respondents said customers are recently asking for payment deferrals or simply haven’t paid their freight bills.
“Ottawa has been vigilant in working with the Canadian trucking industry during the crisis to ensure the trucking industry continues to execute the essential services required of our sector,” said Laskowski.
“We are hopeful the government will provide our industry the crucial, tailored financial support it requires to help steer Canada out of this crisis.”
