3 Canadian Shipping Trends to Watch in 2023
If recent years have reinforced anything, it’s that the shipping industry can be far more volatile than any of us would like.
Even when keeping one’s finger on the pulse of everything going on within the industry, there can be no guarantee that a sudden curveball might cause ripples felt for years after the fact.
This isn’t to say, however, that there is no merit in trying to be prepared.
As the industry nudges closer to the pre-pandemic normalcy that feels like a lifetime away, taking note of trends and what they can mean for your shipping strategy over the next year could be invaluable.
With that in mind, here are our insight on some of the most notable trends seen throughout the shipping industry going into the first quarter of 2023, and what they could mean for you throughout the rest of the year and beyond.
Truck-to-Load Ratios for LTL Shipments are Nearing Pre-Pandemic Levels
According to a report released by BMO in January 2023, truck-to-load ratios for LTL shipments reached a high point in June 2022, with 2.53 trucks for every load, vs. 0.63 trucks per load in February of the same year.
What Does it Mean?
The shipping industry is, like many industries, one of supply vs. demand.
Anyone involved with the industry from 2020 knows well that carriers have been struggling with providing enough of a supply of trucks to meet the increased demand of shippers.
These statistics could signal a long-term shift in the other direction.
Despite increased demand in December 2022 reducing the truck-to-load ratio to 1.21, it remained above 1:1.
This could signal that much of the supply chain squeeze that has been a near-constant pain point for everyone in the industry may finally be in the rear view.
This may also signal that LTL rates, while unlikely to ever return to pre-pandemic levels, may at the very least start to slow in increase.
Orders for Class 5 Trucks Saw a Major Rebound in Late 2022
Keeping in theme with the state of supply and demand throughout the shipping industry, the same report from BMO signaled potentially positive news on the parcel shipping front as well.
According to the report, orders for Class 5 trucks have begun to rebound following a significant dip in 2021 and overall lukewarm 2022. For those unfamiliar with truck classifications, Class 5 trucks fall into the “medium duty” classification, with a weight limit of 14,001 to 19,500 lbs. Class 5 trucks are the most common size of truck used by parcel carriers.
A report from ACT Research corroborates this, highlighting a 32% year-over-year increase in Class 5-7 truck orders in January 2023: an 11-month high.
What Does it Mean?
While carriers do need to consistently order new vehicles to replace older or irreparable ones, noticeably large jumps such as those being reported can largely be attributed to a simple need for more trucks on the road to keep up with demand.
This, in turn, will likely result in the parcel shipping industry seeing much of the same positive impacts predicted for the LTL industry in the way of better service from carriers, and a much more moderate pace of rate increases.
Source: Globe Newswire
The eCommerce Market Continues to See Strong Growth
One undeniable factor that accounts for the growth in demand for parcel carriers is the ongoing unprecedented growth of the eCommerce market.
Data from Statista shows that, not only is this the case now, but that this trend is poised to continue for several years.
Per the report, retail eCommerce generated nearly $58 billion USD (approximately $78 bn CAD) in 2022, with an estimated increase to roughly $77 bn USD (approximately $103 bn CAD) by the end of 2023.
Further, the report forecasted substantial year-over-year growth through 2027, with an estimated increase to roughly $118 bn USD, or approximately $158 bn CAD that year.
What Does it Mean?
If the huge pivot to eCommerce at the height of the pandemic wasn’t a clear enough indicator, the evidence over the last two years clearly illustrates that online storefronts are simply a necessity for any modern business.
Continuing along this line of logic, then, understanding the role that shipping plays in your business’ overall customer experience is essential for any modern business owner.
Saving on Shipping will Always be Fashionable
While we’re confident that the above information can help you with your shipping strategy this year, we’re even more confident that, no matter the current trends, providing a better shipping experience with Freightcom is timeless.
Freightcom is the all-in-one shipping management platform that provides businesses with discounted, real-time rates on LTL and parcel shipping from North America’s leading carriers.
We help you quote, book, ship, and track all your shipments in one place, saving your business time and money, all for zero upfront or monthly fees!
Contact one of our shipping experts today and see why saving on shipping with Freightcom is more than just another trend.
Written by Brandon Draga
Brandon Draga is a full-time content writer at Freightcom, the leading shipping solution for businesses in Canada. When Brandon is not writing content to help businesses with their shipping needs, he can be found at local skate parks or writing fantasy novels.