The 2019 Surface Transportation Summit will take place at the International Centre in Toronto on October 16. Canada’s leading freight conference will try to make sense of the roller coaster that Canadian shippers and carriers have experienced over the past couple of years.

Josh Nye, Senior Economist, Royal Bank of Canada, will kick off the conference with his assessment of the current state of the Canadian and U.S. economies and share his insights on where they are headed in 2020. Two other panelists, David Ross, Managing Director, Global Transportation & Logistics, Stifel Financial Corp. and Stephen Laskowski, President, Canadian Trucking Alliance & Ontario Trucking Association, will provide their outlook on the state of the freight transportation industry in the U.S. and Canada. Following these presentations, Scott Tilley, President, Tandet Group and Anna Petrova, Supply Chain Director, Canada, Conagra Brands, representatives of a leading shipper and trucking organization, will share their perspectives on where the industry is going.

The next panel will include business leaders from five segments of the Canadian freight industry: small parcel and last mile delivery, LTL and truckload transportation, shipping by rail, fleet equipment leasing and real estate. Lucas Murua, Senior VP of Sales and Marketing, Dicom Transportation Group, Doug Munro, President and owner, M-O Freightworks, Al Boughton, Co-Founder, Trailcon Leasing, Tim Roulston, Director of Sales and Truckload Operations, Intermodal, CN Rail and Mark Cascagnette, President, Managing Partner, Lee & Associates, Toronto will share their thoughts on where their segment of the industry is going.

The always popular Shipper / Carrier Roundtable will feature Taimy Cruz, Director of Logistics, Broadgrain Commodities, Sylvie Messier, Corporate Transportation and Customs Manager, Ipex, Rob Nichols, Managing Director of Domestic Intermodal, CP Rail, Norm Sneyd, Vice President, Business Development, Bison Transport, Imtiaz Kermali, Vice President, eShipper and Joe Lombardo, Director or Freight, Transportation and Logistics, Purolator who will debate some of the most important issues facing transportation professionals in the Canadian freight industry.

Whether you obtain your news from TV, newspapers or social media, it is hard to escape the drumbeat of downbeat updates about the North American and global economies. The negative news is puzzling to those people who monitor some of the leading, and still positive, economic indicators.

As noted in a recent paper by Jim Allworth, Co-Chair of the RBC Global Portfolio Committee, 5 of the 6 most commonly tracked economic indices on the bank’s Recession Scorecard are still positive. These include:

Unemployment claims

These are the major developments shaping the freight transportation industry in North America in the second half of 2019.

1. We are entering a period of Economic Uncertainty

Despite a climate of record low unemployment levels, low inflation, a positive ISM manufacturing index and other encouraging economic indicators, the US Federal Reserve cut interest rates on July 31 by a quarter point, the first such rate reduction since 2008. This action is being framed as a precautionary measure to protect the United States from slowing growth in China and Europe, and from uncertainty over President Trump’s trade war. The fact is that this unpredictability is beginning to weigh on business investment in the United States and abroad. Shippers and carriers should closely monitor the key economic indicators to assess whether this and possible other rate cuts will sustain the decade long economic expansion or ease the impact of an approaching downturn or recession.

During the wild and woolly 2018, freight bid activity subsided as shippers searched for capacity wherever they could find it. As we have seen, 2018 was an anomaly, a one of a kind. As we pass the mid-point of 2019, the dynamics of the freight market have changed significantly from the prior year. Business volumes are strong but not at the levels of 2018. To meet shipper demands, many carriers added capacity to their truck fleets. The theme of 2019 is more capacity chasing more moderate freight volumes. What does this all mean from the perspective of freight rates?

Looking at the results of the most recent Morgan Stanley Truckload Sentiment Survey, only 14% of the respondents consider the current truckload demand to be strong while 62% describe it as neutral (supply and demand in balance) and 24% consider it to be weak. Three months down the road, 67% of the respondents expect truckload demand to be neutral while 15% expect it to be weak; only 18% expect freight demand to be strong.

Forty-one percent of respondents perceive truckload capacity to be abundant while 50% consider it to be neutral; only 9% categorize capacity as tight. Three months from now, as we enter the fall shipping season, 25% expect capacity to be abundant while 61% still expect it to be neutral; only 14% expect capacity to be tight.

There are approximately 540,000 truckload carriers registered with the Federal Motor Carrier Safety Administration in the United States. These range from 1 truck to 20,000 truck fleets. The majority have less than 20 pieces of equipment in their fleets. These companies generated approximately $350 billion in revenue in 2018.

Revenue/Tonnage Growth in 2018

Here is a link to the top 50 truckload carriers in the United States and Canada that are listed in Transport Topics (https://www.ttnews.com/top100/tl/2018). Swift Transportation, Schneider National, Landstar System, J.B. Hunt Transportation Services, and Penske Logistics are the five largest US based truckload carriers; TFI (formerly TransForce International), Mullen Group, Canada Cartage, Bison Transport and Challenger Motor Freight are Canada’s largest truckload operators. It should be noted that TFI that has its head office in Canada now derives a significant share of its revenues from the United States.