According to results published today by the Canadian General Freight Index (CGFI), the cost of ground transportation for Canadian Shippers has fallen for 6 of the first 7 months of 2009, declining a further 1.7% in July. In July 2009 over-the-road transportation costs have declined 15.6% when compared year over year, and 9.8% versus the end of 2008.
The year-to-date reduction in costs is the result of the combined impact of declining Fuel Surcharges and reduced Base Rates charged by carriers. In July, Base Rates had fallen 5.9% when compared to the end of last year, and 2.7% versus the prior month. The reduction in costs would have been even greater if Fuel Surcharges hadn’t continued their recent upward movement, increasing by 10.5% in July to an average of 12.4% of Base Freight Costs. This level however is
still lower than the 16.3% average experienced by Canadian shippers at the end of 2008.
The most recent results are available at the CGFI website: www.cgfi.ca
The CGFI is sponsored by Nulogx, a leading Transportation Management Solutions provider and is used by shippers and carriers to benchmark performance, develop business plans, and secure competitive agreements. It was developed with the assistance of Dr. Alan Saipe, President, Supply Chain Surveys, Inc., a long-time analyst and observer of the transportation and logistics industry.
According to Saipe, “Cross border TL and LTL rates declined sharply in July, while domestic rates were more stable. The combined result maintained the downward trend in both rates and costs into July. Rate declines of this magnitude are not likely to continue. We expect freight costs will find a bottom in the fall of 2009 as the economy works its way out of recession.”
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