Freight demand continues to grow as a usual period of slowing demand is overturned by recovering conditions amidst pandemic.
TORONTO – Following a four percent month-over-month increase, July load volumes surpassed the June preceding it for the first time in Loadlink history. The month of July normally signals the start of the summer season when freight typically weakens on the Canadian spot market, but the continuing pandemic has caused tradition to be broken.
As stated in prior Loadlink Freight Index publications, recovery from the pandemic continues across Canada. July load volumes have historically averaged 18 percent lower than June numbers; however, the usual seasonal downturn was heavily negated by improving economic and social conditions. Year-over-year comparisons were favourable as July was up one percent compared to the same period in 2019. This represents the first year-over-year increase in load volumes for 2020 since pre-Covid. Monthly truck volumes reached a high year-to-date, but the overall truck-to-load ratio contracted due to rising load volumes.
Early outlook for August has load volumes trending slightly upwards, with a predicted four to five percent increase in freight volumes. If this pace continues, July and August may provide the first consecutive months with positive year-over-year comparisons since June and July of 2018 when load volumes were at record highs.
JULY HIGHLIGHTS
Early July load volumes are usually a precursor to overall lesser volumes for the month, due to holidays on both sides of the border. Despite the lessened number of workdays, July held strong as improved volumes stood out starting in the second week of the month.
Outbound Cross-border Activity
Overall cross-border outbound and intra-Canadian volumes improved on a monthly basis, with inbound loads from the USA seeing a small decline. Outbound loads from Canada to the United States increased 26 percent while inbound loads from the USA fell nine percent. This nine percent decrease was contributed to a seven, nine, and 14 percent drop in loads to Ontario, Western Canada, and Quebec, respectively. Intra-Canadian load postings were up 13 percent mostly due to a greater quantity of loads originating from Ontario (+23%), Quebec (+15%) and Atlantic Canada (+17%). In terms of where loads were destined, Western Canada (+18%) and Quebec (+33%) were the major contributors.
Inbound Cross-border Activity
Similar to last month, the province of Ontario was once again the front runner in terms of lanes with the largest absolute increases in load volumes. The inbound market of Ontario was busy as it occupied six of the top 10 lanes with the largest amount of new postings in July.
Lane Increases
In terms of percentage changes, several different cross-border market lanes saw the largest percentage boosts in load volumes. British Columbia to California skyrocketed 144 percent; Alberta to Minnesota jumped 135 percent; Quebec to Virginia increased 114 percent, and Ontario to Connecticut rose 98 percent.
Loadlink Technologies also tracks the number of unique companies posting in each lane. During these times of economic recovery, this is a potential indicator of markets where manufacturers and shippers are seeing better activity; hence, brokerages are having access to more loads from customers in additional markets that are recovering. The top five lanes that saw the largest percentage increase in unique companies posting in that lane were Alberta to Washington (+58%), British Columbia to California (+43%), Alberta to Minnesota (+37%), Quebec to Virginia (+30%), and Alberta to Iowa (+28%). Naturally, some of these lanes coincide with the lanes that saw the largest percentage boost in volumes as that would occur as a result of more posters in these lanes.
Compared to June 2020 which saw 79 of the top 100 busiest city-to-city lanes see positive month-over-month gains, July was down slightly with 63 of the top 100 lanes seeing a positive month-over-month change. In contrast to last month’s consistent and steady gains across the board, July’s increases were more varied with a wider range of volume changes, which is more in line with regular monthly data.
Table 1: Lanes with the Largest Load Volume Increases Month over Month
| Market Lane | Rank | Monthly LoadVolume Change | Monthly CompaniesPosting Change |
|---|---|---|---|
| Quebec – Ontario | 1 | +49% | +15% |
| Ontario – Ontario | 2 | +14% | +6% |
| Alberta – British Columbia | 3 | +23% | +7% |
| Michigan – Ontario | 5 | +31% | +2% |
| Alberta – Ontario | 6 | +36% | +1% |
| Missouri – Ontario | 7 | +53% | +15% |
*Based on lanes with at least 500 postings in July. Ranking is based on how many more loads that lane gained month over month, compared to all lanes visible on Loadlink (with minimum 500 postings).
The following city-to-city lanes saw notable improvements in freight volumes on a monthly basis. Notably, year-over-year comparisons continue to strengthen as the year progresses, especially when considering the summer season and ongoing pandemic. Of the top 100 city lanes, 77 saw increased year-over-year comparisons, surpassing the number of monthly improvements.
Table 2: Spotlight City-to-City Lanes with Notable Improvements
| City-to-City Lane | Month-Over-Month Increase | Year-Over-Year Increase |
|---|---|---|
| Montreal (QC) – Toronto (ON) | 99% | -27% |
| Delta (BC) – Calgary (AB) | 63% | 68% |
| Bakersfield (CA) – Toronto (ON) | 54% | 18% |
| Edmonton (AB) – Surrey (BC) | 49% | 156% |
| Tulsa (OK) – Mississauga (ON) | 33% | 165% |
| Edmonton (AB) – Winnipeg (MB) | 25% | 130% |
August Outlook
Due to the coronavirus pandemic, the act of local economies recovering across the country has negated most if not all noticeable effects of a potentially slow July, and instead shown improved demand for freight on the Canadian spot market.
At the time of writing, early August volumes have been consistent and strong following the long weekend at the beginning of the month. Historically, August volumes only improve slightly from July with an average bump of two percent more loads based on Loadlink’s loads index.
Notable Market Activity – Cross Border
There are a few standout market lanes within the first week that have shown increased load postings. The two lanes with the largest percentage increases in the first week of August compared to the last week of July involved the Illinois outbound market, which saw load volumes to Quebec and Ontario increase 82 and 66 percent, respectively. Once again, the Ontario inbound market received more traffic from the US and other high-performing lanes involved cross-border markets with a destination of Ontario. This included outbound markets from Michigan, Ohio, Indiana and Minnesota, which saw gains of 58, 55, 49 and 47 percent, respectively.
Declines in cross-border markets were a bit more varied, but several of the worst performing lanes also happened to involve the Ontario market. Alberta to Minnesota saw the largest decline in weekly performance with a drop of 41 percent, while the New York to Ontario market saw loads fall 31 percent. Ontario to New Jersey decreased 25 percent, while the North Carolina outbound and Pennsylvania inbound markets both saw declines of 24 percent each.
Notable Market Activity – Within Canada
Although overall monthly performance is on pace to improve, intra-Canadian lanes with sufficient volumes (minimum 300 postings in the first week) performed poorly in the first week. Of the visible lanes with sufficient volumes, only the Quebec outbound lane to Quebec and Ontario saw improved performance over the last week of July. Every other high volume intra-Canadian lane fell on a weekly basis. This may have been a result of the civic holiday removing one business day from the first week of the month, which explains why only intra-Canadian load numbers saw such a decline.
Average Truck-to-Load Ratios
In July, capacity tightened by only a single percentage point to a ratio of 3.80 from a value of 3.84 in June. Year over year, July’s truck-to-load ratio was nine percent lower compared to a ratio of 4.16 in July 2019. At the time of writing, August’s early truck-to-load ratio has fallen further from July’s value by five percent to a value of 3.62 due to vastly improved daily volumes following the Canadian Civic holiday at the start of the month.
About Loadlink Indexes
Rate Index data is based on the average spot rates paid by freight brokers and shippers to carriers in the specific lanes where loads are hauled. This data also shows real-time and historical available capacity, and total truck-to-load ratios.
Freight Index data provides insight on Canada’s economy at large, and is a primary resource for the trucking community. The Freight Index accurately measures trends in the truckload freight spot market as its components are comprised from roughly 6,000 Canadian carriers and freight brokers. This data includes all domestic, cross-border, and interstate data submitted by Loadlink customers.
About Loadlink Technologies
Loadlink Technologies helps Canadian transportation companies facilitate the critical movement of goods by trucks through the use of its technology. With decades of propelling innovation and by way of its modernized freight matching, the company helps its members drive better business performance and competitiveness while delivering new levels of customer experiences.