Trucking Prospects for 2023 for Canada's Market
In 2022 there were days where, with our minds focused on work, it could feel like things were back to what they were in 2018, when trucking demand was at a peak and COVID-19 restrictions weren’t something anyone could imagine. On other days, we were reminded how much has changed and how much new terrain we are still facing as we look ahead at the trucking prospects of 2023.
One of the big global words of 2022 has been “recession”. Some experts claim that the recession will be mild in 2023 with a recovery period beginning in 2024. Others fear the worst. What will this mean for trucking? It’s possible that transportation prices, mandates requiring costly updates and other factors may push hard on the industry. However, we can agree with ACT Research President and Senior Analyst Kenny Vieth, who says, “If there’s a silver lining here it’s that the U.S. economy doesn’t work without trucking.”
With the recession in mind and changes like ELD mandates playing out in 2022, we’ve got our eye on new hurdles for transportation services in 2023.
The race to decarbonize transport is one that has been going on for a long time now, and we predict it will intensify in 2023. Specifically, the push to move forward with electric vehicles versus the scale of infrastructure like charging stations to support EVs will come into greater conflict.
The trend in policy shows that the plan is for electric vehicles to be the future of transportation services. This will cut down on emissions in the industry and support climate change. However, while regulators focus on pushing for emissions-related improvement mandates that require costly low-NOx engine updates or a move toward EVs, there currently aren’t sufficient charging stations to support the millions of truckers on the road today. Meanwhile, the low-NOx engine alternative is expected to raise the price of new vehicles by $35,000 USD.
We predict that in 2023 the race to net zero will mean more obstacles in the day-to-day operations as the industry works to keep up with regulations.
In 2021, the government mandated that truck drivers following Hours of Service regulations can no longer use only paper books, but must have Electronic Logging Devices (ELDs) installed. This has been slowly rolling out province by province over 2022. As of January 1, 2023, any truck entering British Columbia must follow the mandate. The slow rollout of this mandate will be complete in every province in 2023.
In 2022, parts of Canada saw fuel prices hit a record high. By the end of the year, we had reached a low that we hadn’t seen in a year. That doesn’t mean we can expect that declining trend to carry through 2023. In fact, we’re expecting that fuel prices will reach that high of $2 a liter in Canada again this year. The price will likely increase month by month into the summer when demand will grow and supply won’t be there.
In late 2022, transportation prices fell. Part of this is due to the lowering fuel prices mentioned above, but that wasn’t all of it. Another part of the reason for lower transport prices was due to warehouses being stocked before the holiday season hit when there has typically been a large increase in demand for trucking. With this change during the 2022 holiday season, and retailers holding a higher level of inventory than normal, it is looking like a waning demand will carry into lower transportation prices early in 2023. It’s unclear when that may change.
In 2021 and 2022 there was a rise in traffic accidents. In 2023 that may still be the case, but changes in safety trends may bring the number down and should definitely have an impact in the more long term. Vehicle regulations are some of the cause for optimism here, with developments like advanced driver assistance systems aiding in driver safety. While public perception is often that transportation services are larger vehicles and therefore part of the reason for the dangers of the road, studies have found that 70% of accidents involving commercial vehicles and cars were ruled to be the responsibility of passenger car drivers. Hopefully, the adoption of technologies like driver assistance systems will help improve safety. Another big reason for hope is improvements in roadway design. Policies like the Infrastructure Investment and Jobs Act are offering reasons for optimism as we look ahead.
Those changes will be coming from things like the recession, the effects of new mandates, and a push for the kinds of infrastructure that will better support fleets as they safely do the hard work of keeping everything going.
To learn more about Transam Carriers’ transportation services, please visit our page: https://www.transamcarriers.com/services
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