7 ROAD TRANSPORTATION

TRUCKING FREIGHT TRANSPORTATION

TRUCK TRAFFIC BY SECTOR

Between 1993 and 2003, for-hire truck ⁸ traffic rebounded from a slowdown due to the 1990 – 1992, jumping from 84.6 to 185.0 billion tonne-kilometres. The transborder sector dominated, with an annual average growth rate of 11.4 per cent. This was more than twice the rate in domestic trucking activities, which was 5.5 per cent. Domestic trucking activities include intraprovincial and interprovincial activities, which grew at rates of 4.4 per cent and 6.3 per cent a year, respectively.

In terms of value, about 63 per cent of Canada-U.S. trade moved by truck in 2003. Commodities shipped by truck from/to the U.S. totalled $335 billion, with exports accounting for $173 billion. Preliminary 2004 trade data showed an increase of six per cent in the value of cargo shipped by truck to the U.S. but less than per cent growth for the reverse movement. Factors such as uncertain conditions in the U.S. due to war in Iraq, high fuel prices, and increased security measures at border points since September 2001, may have contributed to a slower growth in trucking traffic, combined with an appreciation of the Canadian dollar, which has made Canadian goods relatively more expensive to American consumers.

Figure 7-5 illustrates the growth of Canadian for-hire trucking traffic between 1987 and 2003. Table A7-9 in the Addendum provides the data in a tabular form.

FIGURE 7-5: TONNE-KILOMETRES OF FREIGHT MOVED – CANADA-BASED FOR-HIRE TRUCKING, 1987 – 2003

Note: For-hire trucking carriers with annual operating revenues of $0.5 million or more (1988/89) and of $1 million or more (1990 – 2003).

Source: Statistics Canada, Trucking in Canada, Cat. 53-222 and Special tabulations

COMMODITIES AND TRUCKING FLOWS

In 2003, domestic and transborder for-hire truck traffic by Canadian firms generated revenues of $8.8 billion and $8.0 billion, respectively. Six groups of commodities represented 82 per cent of transport revenues. They are: manufactured products (26 per cent), food products (17 per cent), forest products (13 per cent), metal and steel products (nine per cent), automobile and transport products (eight per cent), and plastic/chemical products (eight per cent). In terms of volume, measured in tonnekilometres, the same six commodities also dominated in the same proportion (i.e., 82 per cent of the total).

Ontario dominated in all market segments, with 36 per cent of intraprovincial trucking traffic, 34 per cent of interprovincial trucking traffic and 45 per cent of total transborder traffic hauled by trucks. At the interprovincial level, the largest movements were between Ontario and Quebec (11.7 billion tonne-kilometres), representing almost 22 per cent of total interprovincial trade by for-hire trucks in volume. At the transborder level, the heaviest traffic flows involved those between Ontario and the U.S. central region (19.3 billion tonne-kilometres), and Ontario and the U.S. southern region (12.7 billion tonne-kilometres). For additional information on volume and trucking flows, please see tables A7-10 to A7-13 in the Addendum.

CANADA–U.S. BORDER CROSSING ACTIVITY

Heavy truck activity across the Canada–U.S. border grew almost two per cent in 2004. This returned activity to the 2002 level of nearly 13.5 million two-way trips but it was still short of the peak level of 13.6 million trips in 2000. This is the fourth straight year that crossing activity has remained below the 2000 peak. The levelling off of activity likely reflects uncertain economic conditions persisting after 9/11 and the strong appreciation of the Canadian dollar in 2004. Car crossings were off another one per cent from 2003 to fall below 60 million trips, the lowest level since 1986.

Addendum Tables A7-14 and A7-15 compare activity at the 20 largest border crossings from 2000 to 2004 for trucks and cars/other vehicles, respectively.

PRICE, PRODUCTIVITY, FINANCIAL PERFORMANCE

TRUCKING INDUSTRY

In 2003, the revenues of trucking firms rose by 6.7 per cent to reach $21 billion, just below the annual average of 6.9 per cent from 1998 to 2003. Trucking rates increased on average by 2.9 per cent and output grew by an estimated 3.1 per cent, compared with a 4.3 per cent annual increase over the 1998 – 2003 period. Both domestic and transborder traffic rebounded from their 2002 decreases, jumping 0.8 and 4.5 per cent, respectively.

Total factor productivity in the trucking industry fell by 0.9 per cent in 2003. This second consecutive decrease in productivity has reduced annual productivity gains to less than one per cent over the 1998 – 2003 period. Unit costs rose by four per cent in 2003, higher than the 2.4 per cent average annual increase since 1998.

In 2003, the average industry operating ratio reached 94.9 per cent, slightly higher than the average ratio of 94.4 for the 1998 – 2002 period.

URBAN TRANSIT SYSTEMS

In 2003, revenues (excluding subsidies) of urban transit carriers rose by 4.6 per cent. Alberta carriers registered the strongest growth, at 10.6 per cent, due to increases in both prices (5.1 per cent) and output (5.3 per cent). Overall, total transit output in Canada increased by 1.8 per cent while prices rose by 2.8 per cent.

Transit systems remain among the most labour- and capital-intensive of all transport industries. These two factors of production represented 50 and 29 per cent of total costs, respectively.

In 2003, total factor productivity of transit systems increased by 0.5 per cent. Improvements in fuel and labour efficiency of 9.0 and 3.5 per cent, respectively, managed to offset productivity declines in capital (1.0 per cent) and in other factors of production (7.2 per cent).

Transit costs per unit of output rose by 5.4 per cent in 2003. Since 1998, total unit costs have increased by 15.4 per cent, for an annual average increase of 2.9 per cent.

The total cost of transit systems was estimated at $5.4 billion in 2003. Cost recovery was measured at 42.3 per cent, slightly below the level of the previous three years. Annual operating subsidies rose to $1.8 billion, $216 million above the average of the previous three years. Capital subsidies increased by 22 per cent to $873 million.

Cost recovery ratios for 2003 were 44.8 per cent in Ontario, 41 per cent in Quebec, 39.3 per cent in British Columbia and 33.8 per cent in Alberta. Urban transit operations in the rest of Canada (ROC), which accounts for only five per cent of overall transit revenues, consistently show higher cost recoveries rates than the four selected provinces. This ratio has been hovering around 50 per cent since 1996 and was 48.8 per cent in 2003. Table 7-11 provides details on the performance of transit systems for selected regions in 2003.

Source: Transport Canada, based on Statistics Canada and CUTA information

⁸ Including Canadian domiciled long-distance for-hire trucking firms with annual operating revenues of $1 million or more. Back to text

Major Events in 2004

Infrastructure

Industry Structure

Passenger Transportation

Freight Transportation

Trucking Freight Transportation