While Canada's resource-rich economy held up remarkably well during the first half of the year, softening commodity prices, a slowing U.S. economy, and the Bank of Canada's aggressive rate hike campaign will have a gravitational pull on macro and freight trends during the 2nd half of 2022 and into 2023. The Canadian spot freight market, albeit with a several-month lag, has begun to parallel slackening conditions in the U.S., with demand declining and capacity gradually increasing. Historically low unemployment and sticky wage growth, retreating COVID protocols, improving supply chains, healthy consumer and corporate balance sheets, and pent-up demand should blunt most downside scenarios. Nonetheless, freight headwinds will be stubbornly persistent until the BoC and Fed pivot from a myopic focus on inflation.
Industry Update Summer 2022: Canada Truck Transportation
