Canadian truckers are struggling to make payments on their rigs as fuel prices rise and freight rates tumble, forcing banks to declare tens of millions of...
TORONTO - Canadian truckers are struggling to make payments on their rigs as fuel prices rise and freight rates tumble, forcing banks to declare tens of millions of dollars' worth of bad loans.
Truckers bought new rigs to meet surging demand in the early pandemic, but freight rates have been stubbornly depressed since business normalized with the lifting of restrictions. As a result, truckers have struggled to make payments on loans for rigs and other equipment. BMO said part of its higher-than-expected loan-loss provisions during the second quarter came from the transportation sector.
TD and CIBC hold C$62 million and C$10 million respectively in impaired loans out of C$8.9 billion and C$7.5 billion in transportation loans. Delinquencies on asset-based loans are the most in the last 20 years in Canada, driven by the transportation and retail industries, according to Equifax Canada data.
Avery Vise, vice president at FTR Transportation Intelligence said the industry's recovery will be shallow and prolonged, though the worst has passed.
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