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Industry Snapshot: What Q1 Looked Like in Western Canada Freight

March 30, 2026

Q1 2026 was a quarter that felt familiar in some ways and unpredictable in others. Tariff headlines dominated the conversation, freight rates showed early signs of life, and a fuel shock nobody saw coming closed out the quarter on an unsettling note. For businesses moving freight in BC and Alberta, there was no shortage of things to pay attention to.

The Tariff Situation Is Still Unsettled

The Canada-U.S. trade situation has been the biggest variable hanging over the freight industry since early 2025, and Q1 2026 did not bring the resolution anyone was hoping for. Cross-border volumes stayed soft.

The good news, if you can call it that, came in late February when the U.S. Supreme Court struck down key elements of the legal basis behind some of the tariffs. Canada lifted most of its retaliatory tariffs on CUSMA-compliant goods back in September 2025, while keeping them in place on steel, aluminum, and vehicles. A formal CUSMA review starts July 1, which means the second half of 2026 could bring more clarity or more complexity.

Freight Rates Are Moving, Slowly

After two-plus years of compressed rates, there are early signs of a turn. The Cass Freight Index reported that truckload linehaul rates hit a new cycle high in February 2026, with spot capacity tightening in early March. Year-over-year, rates are up around 2.2%. Not a dramatic recovery, but movement in the right direction.

Industry analysts still point to 2027 as the year the market truly stabilizes. The freight recession has been prolonged by weak manufacturing activity, softer consumer spending, and the overhang of excess capacity built up in previous years.

Clean Freight Takes a Step Forward

Loblaw and FortisBC launched BC’s first commercial demonstration of a hydrogen-powered Class 8 truck in late 2025, running routes between the Lower Mainland and Squamish. In Alberta, the AMTA is rotating a hydrogen truck among participating carriers through early 2026 to gather cold-weather performance data.

The cost barrier remains significant. Current estimates put a hydrogen Class 8 truck at four to five times the cost of a diesel model, with fuel running nearly twice the price of diesel. These pilots are about building the evidence base, not an imminent shift in how goods move.

Alberta Highway 3 Twinning Is Underway

Construction on the Highway 3 twinning project between Taber and Burdett is active, part of a larger effort to twin the route from the BC border to Medicine Hat. The stretch involves 46 kilometres of new four-lane divided highway, 11 bridges, and a bypass around Grassy Lake. Completion is expected in fall 2026. For businesses shipping through southern Alberta, this east-west corridor improvement is worth keeping an eye on.

Diesel Costs Climbed Hard in March

Just as Q1 was wrapping up, a new pressure landed on the industry. Military conflict in the Middle East disrupted oil shipments through the Strait of Hormuz, a passage that carries roughly 20 percent of the world’s oil supply. Canadian diesel prices climbed nearly 30 percent in a matter of weeks.

Fuel surcharge programs exist to manage exactly this kind of volatility, but they typically lag behind sudden spikes since they’re based on prior-period indexes. When that gap widens, the cost finds its way through the supply chain. Analysts are not expecting a quick resolution.

What Q2 Is Shaping Up to Look Like

Freight rates are gaining ground, but diesel costs and tariff uncertainty are pushing back in equal measure. For businesses that ship regularly, now is a good time to make sure your freight partnerships are in good shape. How the tariff picture evolves over the next few months will go a long way in determining what kind of year 2026 turns out to be.