Finding a good home

TORONTO, Ont. – So you’ve got a small stable of trucks and some money to burn, and are thinking of starting up or expanding your own trucking company. The question is, where to base your operation?

Vancouver’s nice, but B.C. is still known by some to stand for ‘Bring Cash.’

What about Winnipeg? Lots of very successful fleets are based there.

Toronto?

That’s where the action is, right?

Or how about Moncton? It’s a beautiful area with a reasonable cost of living, what opportunities exist in the Maritimes?

There are many factors to consider when determining the best place to start up a trucking company.

Obviously, if the fleet is already well established and its business is deeply entrenched in a particular region, it doesn’t make sense to pull up and move just to take advantage of a more business-friendly environment.

On the other hand, when starting from scratch or preparing for a major expansion, it’s important to examine a wide range of variables.

This article looks at seven Canadian cities, and what each of them has to offer in terms of operational advantages and disadvantages.

After many years under NDP rule, B.C. earned the dubious distinction of being one of the least business-friendly provinces in Canada.

However, the Liberal party won a landslide election just over a year ago thanks to a platform aimed at making the province a real player in the nation’s economic and business worlds.

Corporate and income taxes have been slashed in the province, and many industry observers feel the Liberals have done well at listening to the interests of big business.

However, it hasn’t all been good news.

The Liberals are taking a good, hard look at introducing private-public partnerships for highway projects.

That could mean improved infrastructure and better highways throughout the province, or as many trucking companies fear, it could simply mean more tolls and the movement towards a user-pay system.

That being said, there are many advantages to operating a trucking company out of Vancouver. One of the greatest advantages is its close proximity to the U.S. border.

The Pacific-Highway border crossing, however, is notoriously bad for truck backups.

Operating outside the city limits holds several advantages as well, for fleets considering taking up residence in B.C.

The obvious advantage is that trucks can generally avoid the traffic congestion in the Greater Vancouver Area (GVA).

Another important advantage to operating outside the city limits is that fleets can avoid the four cents per litre fuel tax charged on all diesel purchased within GVA boundaries.

This fuel surcharge goes towards the regional transit body, TransLink and is used to improve public transit and some local road projects.

Vancouver offers easy access to the Northwestern U.S., as well as Canada’s busiest port.

With Alberta’s strong oil and gas industry, Edmonton has proven to be an ideal place to call home for fleets servicing the oilfields.

Edmonton offers easy access to the Northern reaches of the province, and is still a short haul from Calgary to the south.

Other advantages include a strong provincial economy and an ultra-conservative government that is known to accommodate big business. A key disadvantage of operating in Edmonton is the lengthy distance to the nearest border crossing.

A trucker is looking at spending a good part of his driving day just to get to the Coutts-Sweetgrass border, located more than 600 kilometres to the south of the oil city. Calgary is at about the halfway point.

Edmonton does, however, have some advantages over its rival to the south.

The city’s gross domestic product (GDP) growth is currently stronger than Calgary’s.

It also boasts cheaper industrial land lease rates and in a cost of doing business index published by KPMG, Edmonton comes out the winner.

Edmonton’s infrastructure is also better than Calgary’s with a nearly completed ring road making it easier to bypass the downtown core.

Calgary is known as a vibrant city with a strong entrepreneurial spirit.

It is just over three hours from the nearest commercial port of entry, and within a day’s drive of the oilfields in Northern Alberta. Meanwhile, the Trans-Canada Hwy. runs right through the city’s core, which can be seen as an advantage, or a disadvantage.

While it’s easy to hop onto Hwy. 1 and head east or west to service Regina or Vancouver, the lack of a suitable bypass means a truck will spend a lot of time negotiating city traffic on the way through.

There are many fleets located in Calgary, most of them congregated in the Foothills Industrial Park.

This area has also seen an increase in truck traffic in recent years, with little done in the way of improving infrastructure to handle the increased traffic.

Like Edmonton, a strong provincial economy plays into the hands of fleet owners, and the city boasts a strong quality of life with the close proximity of the mountains and several world-class events.

The strong economy, however, doesn’t come without costs. The unemployment rate is low, and attracting drivers can be difficult since there are so many fleets competing for them.

Calgary fleets can also feel cut off from their customers, many of them based in Ontario.

Some fleets are combating this issue by hiring Toronto-based account executives to drum up more business while maintaining contact with existing clients from the East.

Chris Saunders, associate vice-president of industrial sales and leasing with Colliers International, says Calgary is an attractive option because of the plentiful affordable limited-access real estate.

“There’s a good supply of industrial land for people in the transportation industry at a fairly low cost,” says Saunders.

He adds “We do need to focus on roadways because otherwise people will look to Edmonton, and they also have a substantial supply of land.”

One of the greatest challenges facing Saskatchewan is its inability to keep its people.

Young people often flock west to Alberta to pursue opportunities as soon as they’re old enough to do so.

In the trucking industry, this makes it difficult to fill seats and expand a fleet.

Another problem is the province’s roadways.

Hundreds of kilometres of the province’s roads are Thin-Membrane Surface (TMS) roads that aren’t able to handle the current volume of truck traffic.

The provincial government has been replacing them slowly but it will be some time before the province’s infrastructure is up to par.

On the plus side, Saskatchewan is a very innovative province. The province’s Transportation Partnership Fund allows fleets to haul increased payloads if they share a portion of their savings with the province itself.

The money collected through the program is used to benefit the trucking industry.

There have also been some recent developments in highway construction coming out of the province.

Fleets specializing in hauling agricultural commodities such as canola oil, grain or livestock have an abundance of freight to target.

Home to many of Canada’s largest fleets, Winnipeg has managed to establish itself as one of Canada’s premier transportation hubs.

Bison, TransX and Reimer all call Winnipeg home, as well as dozens of other medium to large-sized fleets.

Bob Dolyniuk, general manager of the Manitoba Trucking Association, says location is the best attraction to Winnipeg.

“The main advantage is that it’s centrally located – you’re within a day’s travel to some major markets,” says Dolyniuk.

He adds “There’s a relatively stable labor market.”

On the flip side, Manitoba’s left-wing government hasn’t exactly been known to give many tax breaks to big business.

“There are certainly tax rates to be considered if one was locating a company and I’m not sure that overall taxes would be a benefit to locate to Manitoba,” says Dolyniuk.

Many fleets, however, conduct most of their business outside the province, meaning high taxes aren’t a huge
deterrent.

“You’re always seeing companies starting up here, but they probably conduct a good portion of their business outside the province,” says Dolyniuk.

The Greater Toronto Area (GTA) – especially Mississauga – is home to a number of large fleets.

With easy access to Hwy. 401 (Canada’s busiest trade corridor) and the U.S. border, it’s an ideal place to be based for the fleet that wants to be in the middle of it all.

Most of this country’s head offices are located in Toronto, so it’s an ideal location for a fleet’s sales team.

However, the area continues to grow – Hwy. 401 is now the busiest highway in North America – meaning your rigs could spend a lot of time crawling to and from pickups at about 30 km-h in rush hour traffic.

Meanwhile, industrial lease rates are among Canada’s highest.

Toronto-based fleets, however, can service the Northeastern states within a day, including the New York market.

If Just-in-Time deliveries are your fleet’s gig, then the close proximity to major auto manufacturers could be an asset.

The GTA is home to some massive warehousing facilities and the large population offers a strong labor pool from which to draw new drivers.

The Maritime Provinces are home to a number of big players in the trucking industry. Moncton is the heart of New Brunswick’s trucking industry with a number of fleets proud to call this city home.

Ralph Boyd, president of the Atlantic Provinces Trucking Association (APTA) says “all roads lead to and go by the city of Moncton.”

The province leads the way in the category of commercial trucks and trailers per capita and there is a bilingual workforce, which offers some advantages.

There are also a number of distribution centers based in Moncton and the tri-community area.

“Moncton is very well-placed as the hub of Eastern Canada,” says Boyd.

Some of the pitfalls out of operating from Moncton include the fact it is closely surrounded by a number of other provinces, each with their own set of rules and regulations.

A carrier has to be careful to abide by each province’s regulations at all times, as it’s common to drive through several Eastern provinces in the same day. There’s also a growing amount of competition in the region.

“There is competition in our business but fair competition is good competition,” points out Boyd.

Another area where the Moncton region lags behind slightly is in terms of infrastructure. While the twinning of the Trans-Canada Hwy. through the province was recently approved, there are stretches of highway that aren’t up to par, and that can pose problems, especially in the region’s harsh winter months.