Canada Truck Operators Association calls for government budget measures to help small fleet owners to invest in efficiency and equipment
Small trucking companies and owner-operators are feeling the pain at the pump from rapidly rising diesel prices, said the Canada Truck Operators Association (CTOA).
If prices stay elevated, the Mississauga-based advocacy group said it’s looking to government for a response and some temporary relief.
As of Sept. 10, Canada’s volume-weighted average retail diesel price was $2.49 per litre, according to Kalibrate Canada, the association said in a news release.
With the industry facing many operating challenges in a highly competitive market with rising equipment and insurance costs, it’s the small carriers that face particularly tighter margins since recovering those costs through freight rates and fuel surcharges can take longer.
“When diesel prices increase this quickly, trucking companies pay that additional cost immediately, but recovering it from customers may take weeks or may not be fully possible at all,” said Tejpreet Dulat, the association’s director of government and public affairs, in a statement.
“For a small carrier operating 10, 20 or 50 trucks, even relatively small increases per litre can translate into substantial additional weekly operating costs,” he said.
Those costs can be absorbed for a time, the association said, but if expenses stay elevated, it eventually trickles down to the customer when it comes to moving groceries, construction material, manufacturing inputs and retail products.
“We should not suggest that every increase in diesel immediately becomes a higher price for consumers,” Dulat said. “The trucking company often absorbs that pressure first. But businesses cannot absorb rapidly rising fuel costs indefinitely. If elevated prices continue, eventually some of those costs will move through freight rates and the broader supply chain.”
The group is calling for the federal government to recognize these challenges when drawing up the next budget. Its recommendations to government include:
Measures that help smaller carriers invest in fuel-efficiency, anti-idling, safety and operational technology,
Accelerated investment incentives for trucks, trailers and productivity-enhancing equipment,
A proposed Small Carrier Modernization Stream, providing cost-shared support for qualifying investments,
Transportation-specific support that recognizes indirect impacts from trade disruptions, reduced freight volumes, empty repositioning and equipment underutilization, and
Federal policy development that takes into account the limited working capital and administrative capacity of smaller transportation businesses.
More immediate government relief should also be on the table, the CTOA said, with “targeted and temporary” response for small commercial carriers.
“Canada needs a healthy and competitive trucking sector to keep its economy moving,” Dulat said. “We are asking governments to watch this situation closely. If elevated fuel prices become sustained rather than temporary, targeted relief for small and mid-sized commercial carriers should be on the table.”