7 ROAD TRANSPORTATION

INDUSTRY STRUCTURE

Trucking Industry

The trucking industry includes for-hire carriers, owner-operators, private carriers and courier firms. It generated an estimated $52.5 billion in revenues in 2001.

For-hire trucking firms haul freight owned by others for compensation. They offer either truckload (TL) or less-than-truckload (LTL) services, or a mix of the two. For-hire trucking services can be further categorized according to the types of freight carried, such as general freight services, household goods services, liquid and dry bulk services, forest product services and specialized freight services. For-hire trucking firms alone account for more than 40 per cent of the Gross Domestic Product of the whole transportation sector. There were approximately 9,700 for-hire trucking firms in Canada in 2001.

The top ten for-hire trucking companies¹ in Canada, based on total number of vehicles (tractors/trailers) in their fleet, are Trimac Transportation Services (Calgary, Alberta, 7,052 vehicles), TransForce (Montreal, Quebec, 6,825 vehicles), Vitran Corporation, (Toronto, Ontario, 5,820 vehicles), SLH Transport (Kingston, Ontario, 4,295 vehicles), TransX (Winnipeg, Manitoba, 4,206 vehicles), Robert Transport / Groupe Robert (Boucherville, Quebec, 4,010 vehicles), Paul's Hauling Group (Winnipeg, Manitoba, 3,756), Mullen Transportation Inc. (Aldersyde, Alberta, 3,701 vehicles), Day & Ross Transportation Group (Hartland, New Brunswick, 3,384 vehicles) and Clarke Inc. (Toronto, Ontario, 3,150 vehicles).

A number of strategic alliances, mergers and acquisitions of motor carriers took place during 2002. Mullen Transportation acquired Temor Oil Services (1974), the largest transporter of crude oil and provider of fluid hauling services to the heavy oil industry in the Lloydminster, Alberta, area. TransForce acquired several carriers: Canpar Transport, a non-expedited parcel-delivery company based in Mississauga; Japiro Transport, a small LTL and truckload carrier operating in Quebec; Tri-Line Expressways Ltd.'s logistics and freight brokerage business in Mississauga; and Retex Transport, a specialized explosives, petroleum products and propane carrier based in Quebec City. Contrans acquired the trucking assets of Tri-Line Expressways Ltd., the flatbed and general freight division of TCT Logistics, which entered receivership in January 2002.

Owner-operators are small independent for-hire operators who own or lease their own truck and who haul trailers or other equipment for a carrier. Owner-operators work directly for a shipper and for either private or for-hire carriers, or both. The use of owner-operators allows trucking companies to expand or contract capacity as market conditions change. There were approximately 36,000 owner-operators in Canada in 2000.

Couriers include for-hire operators providing overnight or later delivery and same-day messenger delivery. In 2001, the courier industry generated estimated total revenues of $5.0 billion on average volumes of 2.1 million packages per day. There are approximately 17,200 small courier companies that generate revenues less than $1 million per year. These small companies account for 97 per cent of the total number of courier companies yet account for only 14 per cent of total courier revenues.

Trucking bankruptcies reported in any given year come from the for-hire segment of the industry. For the number of bankruptcies in the trucking industry from 1990 to 2002, broken down by region, see Table A7-2 in the Addendum. In 2002, there were 799 trucking bankruptcies, 14 per cent fewer than in 2001. This was the first decrease in the last four years. The most significant decrease in the reported number of bankruptcies in trucking was in Ontario (from 329 to 229) and in Quebec (from 159 to 131). The Atlantic Provinces had five fewer trucking bankruptcies in 2002 than in 2001. The Prairie Provinces and British Columbia (including the territories) had a small increase.

Private trucking consists of those companies who primarily haul their own freight but who may, from time to time, haul other people's goods for compensation. Most companies that own trucks to haul their own products do not ordinarily record revenues for this operation. So the estimate of $24.4 billion for private trucking is better viewed as the operating costs of trucks for these companies. Private trucking dominates in the urban and local haulage areas but its market share quickly diminishes as haul distances increase.

General freight carriers generated 58 per cent of the total revenues of large for-hire trucking firms in 2001. The share of revenues of specialized freight carriers has been increasing in recent years. Table 7-1 shows the revenues of large for-hire trucking firms by market segment from 1999 to 2001.

Note: For-hire trucking firms with annual earnings of $1 million or more.

Source: Canadian Vehicle Manufacturers Association

Total for-hire trucking revenues can be broken down by the relative size of carriers. Size can be measured by four categories of annual revenues: $25 million or more, $12 to $25 million, $1 to $12 million, and less than $1 million. As Table 7-2 shows, this breakdown for 2000 and 2001 was relatively stable. Table A7-3 in the Addendum shows the relative size of carriers from 1991 to 2001.

Note: Including motor for-hire carriers of freight earning annual revenues of $30,000 or more.

Sources: Transport Canada, based on Statistics Canada, Quarterly Motor Carriers of Freight Survey (QMCF) 1999 – 2001; 2001 small for-hire carriers data estimated

Class 8 trucks, used in intercity for-hire operations, have seen yearly fluctuations in reported sales that have been driven by a number of factors, including the profitability of carriers, the demand for trucking services, the useful life of trucks, and carriers' fleet replacement policy/cycle. As Figure 7-1 shows, the 2001 and 2002 sales of Class 8 trucks reported reflect to some extent the economic slowdown of the U.S. economy and its impact on transborder trucking demand.

FIGURE 7-1: SALES OF CLASS 8 TRUCKS IN CANADA, 1990 – 2002

Source: Canadian Vehicle Manufacturers' Association

Bus Industry

The Canadian bus industry can be divided into three principal sectors: transit, school and intercity/charter/tour. Intercity/charter/tour could perhaps best be defined as including all bus service that neither transports pupils nor offers transit or paratransit service. Traditionally, the main characteristic distinguishing intercity and charter operators from the other bus sectors has been the use of motor coaches (as opposed to school or transit buses). The school and intercity/charter/tour sectors are closely interrelated, and corporate ownership cuts across sectoral lines. Carriers in all sectors and of all sizes often offer a mix of services.

Scheduled Intercity Bus Carriers — These carriers primarily operate scheduled services between two or more urban areas. Such services link all Canadian provinces and territories except Nunavut. Through its ownership of Greyhound, Grey Goose, Voyageur Colonial, Penetang-Midland Coach Lines and a few other smaller companies, Laidlaw is the largest scheduled intercity operator in Canada. Other major operators include Coach Canada, Orleans Express, SMT/Acadian Lines and Saskatchewan Transportation. Smaller regional operators include Ontario Northland, Les Autobus Maheux, Intercar, and DRL. Almost all scheduled intercity operators provide at least some charter service.

Charter/Tour/Shuttle Carriers — Charter service is characterized by the rental of a bus to a person or group where all passengers embark and disembark at the same point. Tour carriers primarily provide sightseeing services over fixed routes and sell individual seats. Shuttle carriers are primarily involved in providing service to airports and rail terminals. Some of the larger charter/tour carriers include Brewster Transportation & Tours, Charter Bus Lines of British Columbia, International Stage Lines Inc., Pacific Western Transportation Ltd. and Coach Canada. A single carrier frequently offers both charter and shuttle services and it is not uncommon for carriers in this group to also provide school bus service.

School Service — As the name implies, school bus carriers provide bus service to transport students to and from school. Most school bus operators also provide some charter service. Laidlaw is the largest school bus carrier in Canada.

Urban Transit Service — All major cities in Canada have some form of public transit service, and in terms of revenues, urban transit represents the largest component of Canada's bus industry. Municipal and provincial governments subsidize urban transit services. Some urban transit operators offer school bus and charter services as well as services to travellers with disabilities.

Bus Transportation

The Canadian bus industry is composed of approximately 1,000 operators who collectively move more than 1.5 billion passengers each year. In 2000, the industry generated more than $6.2 billion in total revenues, including subsidies. In 2001, only a partial view of the industry was known, as results of a new survey on passenger bus and urban transit introduced by Statistics Canada in 2002 were still pending.

The bus industry can be looked at by type of establishment (i.e. principal company activity) and by the type of bus service provided. Urban transit represented the largest sector, accounting for 68 per cent of total bus revenues in 2000 (including subsidies), or 50 per cent of total bus revenues (excluding subsidies). In 2001, urban transit revenues totalled $4.4 billion, up 3.3 per cent from 2000. Subsidies were the main source of revenues, with 53 per cent of total urban transit revenues, as shown in Figure 7-2.

FIGURE 7-2: TOTAL REVENUES BY SOURCE – URBAN TRANSIT SECTOR, 2001

1 Other includes charter, school bus and other passenger bus services.

Source: Transport Canada, using Statistics Canada – Canadian Urban Transit Association (CUTA) data

From 1995 to 2001, urban transit operators' operating revenues grew at an average annual rate of 4.8 per cent, while subsidies rose at an annual rate of 2.5 per cent over the same period. As a result, the share of subsidies in total revenues decreased from 57 to 53 per cent over this period.

In terms of passengers using urban transit, the long-term trend shows that an annual increase of 1.2 per cent happened in the 1980s to reach a peak of 1,528 million passengers in 1990; then a steady decrease was recorded to a low of 1,353 million passengers (1996) before recovering to register 1,481 million passengers in 2001.

A similar pattern is seen for distance travelled by urban transit vehicles. Vehicle-kilometres jumped from 716.4 million to 814.4 million from 1996 to 2001, an average annual increase of 2.6 per cent.

Since 1996, the urban transit fleet increased by almost 12 per cent to a record high of 14,560 vehicles in 2001. The biggest change in the fleet composition over this period was the replacement of standard buses by more accessible, low-floor buses.

Full-time employment in urban transit decreased from 37,494 to 35,867 employees over the 1995 - 1998 period before increasing to 39,460 employees in 2001. The average salary, including benefits, for employees was estimated at $54,012 in 2001.

For more information on the bus industry, see tables A7-4 to A7-7 in the Addendum.

1 Source: Today's Trucking, March 2002 Back to text

Major Events in 2002

Infrastructure

Industry Structure

Passenger Transportation

Freight Transportation

Price, Productivity and Financial Performance