Small Canadian carriers squeezed despite stronger volumes: CTOA

Small Canadian carriers are absorbing freight rates that have fallen below sustainable operating levels even as tonnage moves through the network at higher volumes, the Canadian Trucking Owners Association (CTOA) has warned, in a finding that puts the country's owner-operator cohort at the centre of the current rate-volume divergence.

CTOA's framing draws a sharp line between two numbers that usually move together. They are not moving together now. Volumes are higher; rates are lower. For a small carrier running a handful of trucks on spot or short-term brokered freight, that gap is the entire margin.

What is the CTOA actually saying?

CTOA's headline — "low freight rates squeeze small Canadian carriers despite stronger volumes" — is precise in two ways. It names who is squeezed: small carriers, not the national fleets on long-term contracts. It also names the counter-intuitive part: this is not a demand story. Trucks are moving. The squeeze is on the price side.

That distinction matters because the usual response to "low rates" is to blame a weak freight economy. The data CTOA points to does not fit that script. The market has more freight than it did at the recent low, paying less per mile to move it. CTOA's choice of words — "despite," not "because of" — is the warning.

Why do small carriers feel it first?

The mechanics are familiar but worth restating. Larger Canadian carriers lock in shipper contracts with index-linked fuel surcharges, dedicated routes, and quarterly rate reviews. Small carriers trade on the spot board and on broker relationships. When shippers have more trucks to choose from, spot rates drop first and fastest. Small carriers are the price-takers.

The same gap shows up on the cost side. Per-truck insurance, financed equipment, and deadhead miles all sit on smaller balance sheets. A modest spot rate drop erodes more percentage points off an owner-operator's operating ratio than off a national fleet's. CTOA's framing is, in effect, an argument that price is the problem — not cost.

What should shippers and brokers read into this?

For shippers, the current market looks favourable. Spot capacity is plentiful and broker rates reflect that. For carriers watching revenue per mile, the message is the opposite: rates below cost are not sustainable beyond a quarter or two.

The downstream consequence is structural. When small carriers park tractors or close, capacity tightens on the lanes they dominated — domestic van and reefer between Ontario, Québec, and Western Canada. The next upcycle then starts from a thinner base. CTOA is forecasting the next tightening from inside the cohort that will not survive to price it.

The signal worth tracking is not whether rates fall further but how long they stay below cost. Small carriers can absorb one or two soft quarters. Three or four is where exits accelerate.

CTOA's framing assumes small carriers cannot negotiate the spot rate back up — the load-bearing wall of the entire argument. If it holds, exits accelerate within two quarters. If it breaks — because a major shipper resets its spot board or a freight cycle turns faster than expected — the squeeze softens before the cohort thins out.

What signals will show if the squeeze deepens?

CTOA has named the problem. Whether it becomes a structural shift depends on three observable signals:

• Spot rates on domestic lanes with the highest small-carrier exposure.
• Used tractor pricing in Canada, which tracks what carriers expect to earn over the next year.
• Insolvency and carrier-count data for the smallest fleet segments.

The volume recovery is real. The open question is whether the rate recovery follows before the small-carrier cohort thins out further.