As 2023 winds down we surveyed several Canadian fleet executives to find out what they feel 2024 has in store. We continue the series by asking Ryan Collinge, chief operating officer of Trimac Transportation for his outlook.
What is your outlook for freight and business conditions in the Canadian transportation sector in 2024?
I believe we are heading into yet another year of uncertainty; with inflation slowing but still at historically high levels, interest rates remain high preventing access to capital that normally drives transportation activity, and unemployment rates are still very low, so access to labor continues to be a challenge.
We see a relatively large misalignment with market conditions, customer expectations and a heightened cost environment. To me this means, we are seeing more volatile demand and softening. In general, our customers are expecting freight rates to come down to reflect the slowing demand, while our day-to-day operating costs are higher than ever and show no signs of slowing.
We continue to watch inventory levels across many segments as a signal of when markets may rebalance themselves and volumes may stabilize, and we are hopeful that the back half of 2024 may offer more consistency for the industry. External global influences still have an ability to change those outlooks, especially around the price of oil which drives a large part of the activity in Western Canada and also drives the price of one of our largest cost buckets.
As always there will be pockets of opportunity, those that have diversified portfolios will have an opportunity to find the areas that are winning in this environment and react accordingly.
What will be the keys to succeeding in that environment in the year ahead?
The takeaway for me, is that the industry in general and certainly Trimac, will have to be unrelenting in cost management in the upcoming year to handle whatever market conditions inevitably present themselves.
As is true in almost any economic condition, who and how you partner with your customers, vendors and employees become critical to tapping into an ecosystem greater than yourself. As part of that, companies will need to look for more niche solutions than they traditionally have which is a change for an industry as mature and large as ours.
At Trimac, we are certainly evolving our approach to become more agile in our responses, but the hard reality is that you need exceptionally strong systems and processes to deliver on that, and neither of those come easily to the larger carriers out there. Lastly, I think there continues to be areas of opportunity in the acquisition space. We will need to be ready to jump on those as they come up as well as have the discipline to ensure we are focused on companies that fit with who we are as an organization and can add value to our customer base.
