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Deregulation brought productivity gains to truckers, who gave savings right back: Conference Board of Canada

TORONTO, Ont. -- It will come as little surprise to motor carriers that shippers have been the biggest benefactors of deregulation.


TORONTO, Ont. — It will come as little surprise to motor carriers that shippers have been the biggest benefactors of deregulation.

A new Conference Board of Canada report, comparing a highly regulated environment (taxicabs) to a deregulated one (for-hire trucking) on behalf of the agri-foods industry, concluded that productivity gains realized by the trucking industry have in large part been passed along to shippers.

“In general, prices fell (in real terms) while productivity increased,” the report concluded, noting also there was some market instability as a result of new entrants getting into the trucking business.

From 1986 to 2003, trucking industry total factor productivity (TFP) increased by an average of 1.7% per year, while prices dropped in real terms (they rose 0.8% per year in nominal terms). This contrast occurred while input prices (fuel, labour, capital costs, etc.) rose 2.6% per year.

“In other words, carriers increased their productivity substantially,” the report concluded. “Competition ensured that a substantial portion of the savings from productivity gains were passed on to customers in the form of lower prices.”

Since input prices grew 29% faster than output prices, the Conference Board of Canada concluded that the trucking industry gave back 87% of its productivity gains.

“Put another way, 87% of productivity gains have been used to hold down output prices in the face of rising fuel, capital, labour and other costs, rather than to increase profit,” the report found.

The full report, called We Have Been Here Before, can be downloaded from www.e-library.ca.


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7 Comments » for Deregulation brought productivity gains to truckers, who gave savings right back: Conference Board of Canada
  1. Billy says:

    I wish they would quit calling this fiasco derregulation. It’s easy entry, once you’re in there are more rules then then when the industry was regulated and the money was decent.

  2. richard K says:

    Deregultiion was brought in for one reason to increase corporate profit and wrestle control on the industry away from the drivers. The end result is that the rich got richer and the livestyle and ability of a driver to earn a GTA hasnt had a pay increase since 1986

  3. Victor Mitchell says:

    Deregulation has been a disaster for the industry. Just look at the family incomes have dropped. Safety standards have dropped. A driver can not run his/her body by a book. You need rest when you need it not when your book tells you your finished for the day. All deregulation has done is force more hours on drivers that are not capable of doing it and lowing there health standards ,family standards and social standards. Drivers are not robots! It use to be a good industry until deregulation came along. If drive good make a proper rate and work together they could lower there hours of service slightly which would increase there rates to a livable wage a family could have there parents at home occasionally. If drivers stuck together the could have the best industry in the world. Regulation works if managed properly by the people doing the work not by corporate greed to run the drivers into the ground for the cheapest rates and maximum hours of service. It use to be drivers had time to stop for a health meal out of the truck now they don’t even take time out of the truck to relieve them selves just look at how many piss bottles are on the Hiways today. Most of the rest areas are closed by the government so the drivers can not stop and rest or relieve them self. Bring back properly regulated rates of pay for serve done. Down size the equipment size and bring back more drives that enjoy working in a safe and healthy environment. Moderately stress free with family and social time they can afford.

  4. Roadghost says:

    Funny how they don’t talk about the federal government paying for free truck driver training that artificially lowers wages by creating a surplus of drivers (no, there is no shortage of truck drivers) so that trucking rates stay low. If they were to stop doing that driver’s wages would increase by about 30%. “Subsidization” has done as much as deregulation to cheat drivers out of a decent wage.

  5. Joe Mendonca says:

    Deregulation has not only been a complete diaster for every driver in North America I believe it has also been the start to what we call the driver shortage.
    Everybody talks about how transportation companies have become more efficient and have been able to reduce rates and pass cost savings onto the customer, what they are not saying is that most of these cost savings have come out of the drivers pockets.
    As an owner operator, I see the cost of fuel going thru the roof, I see maintenance costs going up, the price of trucks going up etc. What I am not seeing is my rate per mile going up, I am not getting paid for everything I do, in fact I have to fight to get paid for things I should be paid for and others I just get told “we don’t pay for that”.
    I see deregualtion as a licence for the transport companies to screw their drivers over and no regulatory body there to control what happens.
    Everybody talks about the driver shortage, I don’t see a driver shortage, I see a lot of drivers pissed off about the way we are treated and the way we get paid. And because NOBODY is listening and NOBODY is doing anything to change the industry so Drivers are just leaving.
    I read article after article about the driver shortage including the report from the Blue Ribbon Task Force and their findings but yet I don’t see any change, in fact I see the driver taking on more and more responsibility with less and less pay but I don’t see anybody coming forward to change anything.
    I see transport companies passing the buck, sitting on the fence, blaming the customer for setting the rates, not wanting to pay for detention time, excuse after excuse and the drivers paying the price for this.
    I read articles where government agencies believe that the transport companies are capable of solving the problem and yet it doesn’t take a business degree to figure out that since Deregulation this industry has gone down hill because there is nothing regulating the transport companies rates, fuel surcharges and proper rates of pay for drivers.
    Transport companies all know there has to be changes and these changes need to happen quickly but they are all waiting for the other guy to make the 1st move and thus we all stand still.
    We the drivers need somebody to step in and regulate our pays so that they are fair and competative for the job that we do and the responsibilty that we have on the road.

    Deregulation put the power of governing the industry in the hands of the Tranport Companies at the expense of all the drivers. Its time for the Government to step in and force regulations to be put in place.

  6. Joe says:

    Well aside from deregulation we now have an industry where the middle man has the truckers bent over a barrel. I’m referring to the “load broker”. They have exploded in numbers due to the internet based load board programs available today which makes booking freight incredibly easy. The problem is transparency. The shipper doesn’t know how much the carrier is being paid and the trucker doesn’t know what the shipper is paying. It’s all in the control of the broker. The load boards i.e. loadlink won’t even sell there programs to a shipper. Why that is I don’t fully understand. A trucking company is allways under pressure to book there truck to keep everyone moving. The load broker has time to pick and choose who they give the load to. Many factors help the load broker decide this but ultimately it usually comes down to price. The margins for the trucker are very thin but the margins for the broker are huge. Remember they are in control. You as a trucker are under pressure. Very seldom are you the only trucker available for a particular load. Many times a load will pay 3000.00 dollars and the trucker will be awarded only 2000.00. So it’s not the shippers who are saving but the load broker not passing on the full amount or a resonable amount to compensate the trucker. Load brokers should be held to a 10% margin for themselves. The rest should go to the trucker and all freight cost should be marked on the bill of lading. After all it is a legal document. Everything else regarding the shipment is listed on there. Today i would say 90% of freight moves by a load broker or logistics company who are not asset based and that in itself is wrong. If your not willing to buy equipment then there should be some transparency to both shippers and receivers and truckers as to how the freight charges are being dispersed. Once this happens the trucking industry and it’s drivers will fair much better. I hope things get better as I love being a trucker and owning trucks and the worse part of my career in trucking as a company owner has been the part of load brokering. It makes me sick to see people doing loads for nothing but I understand that the trucker is the one always “under pressure”

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