4. Freight Hauled by Truck

About 90 per cent of trucks in Canada are used to haul freight or equipment on public roads. The rest work either off-road or in some non-freight application. This section explores freight carried by the freight-carrying trucks.

TOTAL TONNAGE  
Nobody really knows how much freight trucks haul. Statistics Canada is the most common source of information on the volume of freight handled by for-hire trucks-278 million tonnes in 2000-204 million domestic and 74 million cross-border. But this survey of 1,711 motor carriers, out of a population of at least 9,317, includes only firms domiciled in Canada that earn $1 million or more in revenues, mostly from long-distance hauls (80 kilometres or more). This survey is the source of the information on domestic tonnages for trucks shown in Graph 14.

Graph 14: Domestic Freight Volumes, 2000

Source: Transport Canada (from Statistics Canada)

Other sources suggest truck volumes are much larger. For example, if a 1999 roadside survey of trucks on main highways-a one-week sample with more than 65,000 observations-is extrapolated to annual volumes, the total could be as high as 474 million tonnes. And this still does not account for freight moving in urban areas or on secondary roads. Further, because of the sampling method, this 474 million is known to underestimate volumes where the trip distance is less than 200 kilometres.

A more comprehensive source of information is available for cross-border flows. Trade statistics, in dollar terms, have been converted to tonnages. In this case, "other"-mainly pipelines-is added as a transport service (Graph 15). Trucks carried 140 million tonnes across the Canada-U.S. border in 2001. While this is only 30 per cent of the freight volumes (tonnes), it represents 64 per cent of the value of trade between the two countries.

Graph 15: Canada-U.S. Freight Volumes, 2001

Source: Transport Canada (from Statistics Canada). "Other" is mainly 
freight carried by pipeline.

To illustrate the differences between the two sources of information, Statistics Canada's survey of larger for-hire carriers shows 73.7 million tonnes of cross-border truck freight in 2000. The trade data shows 140 million tonnes. A small portion of this difference is attributable to private trucks, and another portion-possibly less than one-third-is accounted for by trucks operated by U.S.-based carriers.

This point about the different numbers from different sources is important. For example, one study of grain movements in the Prairie provinces for the 1995-96 crop year estimated a total of 51.6 million tonnes moved by truck. Most of this (84 per cent) was classified as local movements, usually by farm trucks, from a farm to an elevator or other local destination. Because grain volumes are well tracked, these estimates are accurate. So the question arises: what do other sources say about grain movements?

Statistics Canada's survey, which does not include farm trucks in its target population, shows 2.8 million tonnes of unmilled grain moved by truck in 1996 in all of Canada. Even if milled grain is added, the Canada-wide total is only 3.5 million tonnes. The 1999 roadside survey, which attempts to estimate movements of 200 kilometres or more on main highways, suggests 4.3 million tonnes of cereal grains moved by truck in all of Canada.

The difference in these numbers is enormous-51.6 million tonnes in three provinces versus anywhere from 2.8 to 4.3 million tonnes Canada-wide. This doesn't mean that any source is inaccurate-they target only a portion of truck activity. But it does show how sources must be understood in terms of what they are trying to estimate. It also reinforces the earlier point that nobody really knows how much freight is handled by trucks.

TRUCK AND RAIL MARKETS  
While trucks and railways compete for freight, much of their business is distinct. Railways haul primarily bulk commodities-coal, grains, potash and other fertilizers, ores, lumber and other forest products-over long distances. Trucks certainly move a lot of bulk products locally (gravel in dump trucks or the almost 52 million tonnes of grain in the three Prairie provinces), but, on longer hauls, they're best used to serve the manufacturing, wholesaling and retail sectors.

The Canada Transportation Act Review Panel, a federal commission looking at federal transportation policy, examined rail traffic volumes and noted that rail freight, measured either in tonnes or tonne-kilometres, had grown by only 0.8 per cent a year between 1988 and 1999. "The explanation [for this sluggish growth] lies in the rail industry's continued dependence on the bulk commodity sector," it said. "Because of its inherent service flexibility, trucking has benefited more than rail from growth in the new economy, despite significant efforts by railways to attract a greater share of high-growth, high-value traffic. As well, trucking has been the main beneficiary of growing north-south flows."

One area where trucks and railways both compete and work together is the market for intermodal freight-freight moving in containers, or sometimes truck trailers-that moves both on a rail car and over the road. To give a sense of the close relationship between the two industries, consider that, for Canadian Pacific Railways and Canadian National Railways, in the first nine months of 2002, intermodal revenues-containers or truck trailers-amounted to 20 per cent of total freight revenues. Virtually all of this freight moves over the road at one end (or both) of the rail haul.

FOR-HIRE FREIGHT CHARACTERISTICS  
Statistics Canada's survey of the larger for-hire trucking companies provides information on the freight hauled by these carriers. As shown in the first two rows of Table 4, most freight handled by these carriers, as measured by the number of shipments or tonnes, is domestic. But, in terms of trucking revenues, cross-border moves now account for 47 per cent of activity.

The next two rows, showing domestic traffic only, tell something important about trucking services. The dividing line of 10 tonnes is used as a rough proxy for distinguishing between truckload (TL) services and less-than-truckload (LTL) services. The two are very different. TL service is direct: the truck picks up freight at the shipper's dock and delivers to the consignee's dock-there is only one customer's goods on board. LTL freight is picked up, taken to a terminal where it is consolidated with other freight bound for the same destination, then carried by a linehaul truck to a terminal near the destination city, and then finally delivered by another truck. There are several variations on this pattern, but the point is that the delivery of the service requires a freight-sorting terminal.

This distinction in the two services can be seen by the fact that LTL services account for only nine per cent of tonnage, but fully 42 per cent of the revenues earned. TL freight, on the other hand, accounts for 92 per cent of the tonnes, but only 58 per cent of revenues.

The final three rows compare characteristics of domestic and cross-border shipments. Cross-border shipments tend to be larger and move longer distances. But, because the proportion of TL shipments in this mix of cross-border traffic is considerably larger than it is in domestic service, the average revenue per tonne-kilometre is considerably lower.

TRUCKING SERVICES  
Trucks do more than just move freight. Many companies with trucks or with trucking services contracted to them provide what is known as logistics services, where they manage all or a portion of a customer's distribution system. For example, Ford Motor Co. has a plant near Toronto that produces 1,500 minivans a day. To keep it running, a logistics company, TPG, organizes 800 truck deliveries a day from 300 different parts makers. Loads arrive at 12 different points along the assembly lines without ever being more than 10 minutes late. Parts are loaded into the trucks in an exact sequence so that when they are unloaded they move directly onto the assembly line. Trucking has become an integral part of the warehousing-assembly-line production process.

NORTH-SOUTH REALIGNMENT  
Another characteristic of truck freight is that trade agreements have shifted more truck freight into a north-south alignment. This can be shown in two ways. First, as illustrated in Section 3 of this profile, the volume of trucks crossing the border (growing at 5.5 per cent a year since 1990) and the value of the commodities they carried (growing at 11 and nine per cent per year respectively for exports and imports) expanded much faster than the overall economy (2.8 per cent a year) in the 1990s.

Graph 16: For-Hire Trucking Cross-border Activity

Source: Transport Canada & Statistics Canada

Second, considering only the larger for-hire motor carriers, the figures in Graph 16 tell the tale. Cross-border freight jumped from about 13 per cent of total volumes in 1987 to almost 27 per cent in 2000. Revenues from this cross-border freight now account for 47 per cent of total for-hire revenues.

One final note about the growth in cross-border freight. Canadian truckers have increased their share of the total over the past decade or so. In 1984, Canadian trucks accounted for 59 per cent of the trucks crossing the border; in 2000, they accounted for 70 per cent. In this case, "Canadian trucker" means a trucking company domiciled in Canada using trucks registered in Canada and Canadian drivers. The company itself may well be owned by American interests, as there are a large number of trucking companies with operations on both sides of the border.

URBAN GOODS MOVEMENTS  
There are also large volumes of freight moving within towns and cities that don't show up in intercity transportation statistics (Statistics Canada's survey of 1,711 large for-hire carriers; the 1999 roadside survey, or the trade data that has been converted to traffic flows for Canada-U. S. movements). One study estimates the annual movement within urban areas is in the range of 45 to 73 tonnes per capita. This suggests a total volume of perhaps two billion tonnes annually in Canada. Presumably, this includes much of the 278 million tonnes estimated in Statistics Canada's survey and all of the 474 million tonnes estimated from the 1999 roadside survey (all the main highways pass through cities).

But this estimate of two billion tonnes has to be understood in context. Adding up urban goods movements can count freight two or even three or more times. To start, much of the intercity volumes show up twice in the sense that they have an origin in one urban area and a destination in another. If this same freight moves from a warehouse to a retail outlet, it counts as another tonne. In some cases, this same tonne also moves by truck from a retail outlet to a residence. Some of it also shows up as garbage when it moves by truck to a transfer station and from there, by another truck (and another tonne of urban goods movement) to a landfill site.

The point is that Statistics Canada's estimate of 278 million tonnes of intercity freight (larger for-hire carriers) or the roadside survey estimate of 474 million tonnes of intercity freight (trucks on the main highways) can only be compared to the (possible) two billion tonnes of urban freight if the differences in the two measures are considered.