REGINA, Sask. - Ever since the federal government ended the Crow Rate in 1995, the Prairie trucking industry has enjoyed swelling freight volumes.The federal subsidy had ensured that farmers did not h...
REGINA, Sask. – Ever since the federal government ended the Crow Rate in 1995, the Prairie trucking industry has enjoyed swelling freight volumes.
The federal subsidy had ensured that farmers did not have to pay the full freight rate when shipping products by rail. But faced with a federal deficit and increasing opposition from world markets against such payments, the program was scrapped.
It was the first of several factors that began to see more grain shipped on asphalt highways rather than iron ones. Major railroads and grain companies had already begun an ambitious program to increase efficiency, closing traditional elevators, developing bigger elevator designs, and abandoning branch rail lines. In fact, more than 1,900 miles of branch-line railways have been abandoned in Manitoba and Saskatchewan in the past 20 years, and there have been 375 fewer grain elevators in those provinces since 1989.
All of that led to a greater need to ship grain by truck. An additional 110 million net-ton-miles of grain products have been shipped over the road in the past decade, when compared to the volumes of 10 years ago.
But will this kind of growth continue to take place on the Prairies during the next few years? Although no one can predict the future, an analysis by Mark Hemmes, vice-president of client services for Edmonton-based Quorum Corporation, says there’s hope.
“It’s definitely a strong industry,” says Hemmes. “They have done an excellent job of replacing the railways.” In addition to the growing number of trucking companies, Hemmes says the number of farmers using Super-B or tridem trailers has also increased.
Monique Prudhomme, vice-president of operations at Regina-based Prudhomme trucking, agrees. The equipment used by the industry has much improved since she entered the business in 1979. Her company tries to ensure that its 70 trucks are 1998 models or newer.
James Nolan, transportation chairman of the College of Agricultural Economics at the University of Saskatchewan, says that the good times in the province’s trucking industry should continue for the next several years. Rail competition probably won’t be a factor because the federal government will not be reviewing the situation for a few years.
“My work in the trucking industry is to keep this going. We want to keep the safety regulations, of course, but we want to move to get the other regulations out,” says Nolan.
The weakness in the supply chain, however, is highways that are crumbling under the stress.
“The increased activity in trucking has come at a cost,” says Hemmes. “They’ve been bashing the highways badly. They used to have the infrastructure before, but it is deteriorating.”
Highway costs have risen over the years so that the same amount of money that would build and maintain 1,000 km of highways in the 1980s will only serve 400 km today.
Don’t count out the railways.
Although Canadian Pacific and Canadian National have abandoned branch rail lines – leaving truckers to pick up the slack – this has upset many rural communities. When there are fewer people coming into town to use the elevator, less money is spent and the town slowly dies.
A recent study found that 76 per cent of communities that have suffered elevator closures also suffered a subsequent population loss.
This has led many municipalities to consider developing short line railways or a regional network.
OmniTracks, for example, operates short line railways in Saskatchewan, Manitoba and B.C. It is lobbying for a $50 million regional railway in Saskatchewan and Manitoba, which would annually haul in excess of 10 million tonnes of grain and other commodities. The Saskatchewan and Manitoba governments recently contracted TravaCon Research Corp. to study the pros and cons of establishing a regional railway in Western Canada. If the government is willing to financially back such a proposal, then it can reasonably be assumed that the Prairie trucking industry will lose some business as a result.
But Nolan says the industry should be more concerned about the provincial governments’ interest in developing global positioning systems, which will better enable the government to track truck movements. This could lead to the truck tolls based upon their use of a road. n