Federal data is supporting the Canadian Trucking Alliance’s recent findings that, despite being an essential service, the trucking industry is far from immune to the economic shocks brought on by the COVID-19 crisis and that federal aid is required to provide much-needed relief to trucking companies.
Statistics Canada has released its Labour Force Survey for April, which quantifies the devastating blow various sectors like trucking have taken from the pandemic. StatsCan reports the transportation and warehousing sector saw a -14% year-over-year change in employment, illustrating just how severe the labour and operational challenges are for the industry, even though it’s being relied on to provide Canadians with food and essential products during the crisis.
Other sectors intimately tied to the trucking industry and supply chain also experienced severe job losses, including retail, manufacturing, natural resources, and hotel and food sectors.
Similarly, two recent CTA Business Conditions Surveys show how the pandemic is financially throttling carriers, particularly in drying up much-needed cash to maintain operations and labour.
The surveys reveal:
Cash-strapped carriers on average experienced a 27-percent decrease in revenue in April 2020, falling even deeper to 33 percent by early May. Many carriers also report more than a 300-percent increase in ‘empty miles’. Nearly 80 percent of carriers say they currently have major customers who are closed, and 63 percent of fleets indicated their customers have recently asked for payment deferrals or simply have not paid the trucking company for their services. More than a third of fleets have significant concerns whether they continue operations beyond the next three months unless there’s a near-term improvement in conditions.
CTA says the current situation is unsustainable for many trucking businesses and truck drivers. In order to help reinforce the security and stability of the supply chain, the Alliance is asking the Government of Canada to introduce a Payroll Tax Deferral Program – to provide fleets the needed cash to maintain operations – as well as an increase in the meal allowance for all truck drivers facing rising costs associated with operating during COVID-19.
“Simply put, our sector needs additional, directed assistance above and beyond what the Canada Emergency Wage Subsidy (CEWS) provides due to the nature of our sector and the critical relationship it has to the supply chain,” says CTA president Stephen Laskowski. “Although the CEWS may be enough for some sectors, it does not fully stabilize the Canadian trucking industry, which is a major support column of the Canadian economy.”
Demonstrating this point, the CTA survey showed that 49 percent of carriers indicated they do not qualify for the CEWS with a significant chunk of carriers nearly missed qualifying for the subsidy, with 38% of respondents saying they qualify and have applied for the CEWS; 13% believing they may qualify but have not applied yet.
“Many trucking companies say they are peering over the ledge of a perilous freight cliff,” says Laskowski. “While many trucks are still working to move COVID-19 related products and keep store shelves stocked, they struggle to find return freight, leading to evaporating margins and the inability to cover the full cost of operation. They report customer demands for their services are disappearing while payment and collection issues are mounting.”
Laskowski commended Ottawa’s willingness to work with the industry to find solutions and provide relief during the pandemic.
“We are hopeful the government will provide our industry the crucial, tailored financial support it requires so that carriers can help steer Canada out of this crisis by continuing to execute the essential services required by all Canadians.”