A 10,000-ft. View
Trucking, unlike so many other industries, shrinks and grows almost instantly, depending on the economic times. As of 2012, the average number of owner-operators contracted to Today’s Trucking magazine’s top 100 for-hire carriers was 196, up from 185 in 2009. It was the highest count in the last decade.
In the difficult year of 2009, owner-operators showed an 11.5-percent drop over 2008, a reflection of the fact that they’re always the first trucks to be idled — long before company-owned vehicles — when the economy goes sour and freight becomes scarce.
They also sit on the balance sheet differently, depending on what part of the country you’re in. Nationally, the top three expenses are salaries/wages/benefits, followed by payments to owner-operators and fuel.
In British Columbia and the territories, those three are almost equal (at 22.0 percent, 21.5 percent, and 19.3 percent, respectively), indicating the region’s relatively high dependence on contracted or lease operators.
Things are quite different in Quebec. There, salaries eat up 27.4 percent of the expenses total (highest in the country) while owner-operators (14.8 percent) are overtaken by fuel expenditures at 19.5 percent.
Clearly, owner-operators are a smaller component in the Quebec industry, that 14.8 percent figure being the smallest of all provinces and regions.
Quebec carriers spend more on maintenance and repairs than carriers elsewhere in the country (9.2 percent of all expenses) but the range across Canada is not wide, the low count being 7.5 percent in Ontario.
The operations side of small fleets is significantly different from large carriers. As a percentage of all expenses, they spend more than twice as much on fuel (29.3 percent vs. 14.0 percent) and nearly double on repairs and maintenance (12.6 percent vs. 7.0 percent).
Predictably, for-hire carriers and owner-operators saw fuel expenses rise substantially between 2009 and 2011, by 38.9 percent, even though miles driven and fuel consumed rose by much, much less. During that period they saw average fuel economy sink from 5.4 to 5.2 mpg, partly explaining the expense hike.
The nature of the hauling done by for-hire carriers has been changing in recent years as they’ve been doing progressively more local work, that share rising from 16.4 percent to 19.6 percent from 2004 to 2010.
Domestic vs. International
More significant changes can be seen in terms of domestic vs. international hauling. While the number of shipments hauled in both categories changed little in that period, domestic rising slightly, international falling slightly, the revenue picture is very different. Carriers earned about 12 percent more on domestic hauling but a dramatic 25 percent less on international carriage. Canadian fleets dominate the cross-border arena with a share estimated at 75 percent.
The drop in revenue arising from international movements likely indicates increasing competition as all carriers suffered in a market defined by over-capacity during the recession and its aftermath.
In examining the products hauled by for-hire carriers in 2010, as measured by percentage of all for-hire revenue nationally, “not climate-controlled packed goods” — freight in dry vans — had the largest share at 26.1 percent, followed by dry bulk at 16.7 percent and liquid or gaseous bulk loads at 10.1 percent.
The “all other goods” category is substantial at 26.1 percent, an undefined mix that includes flatdeck loads of all sorts, which traditionally make up about 20 percent of the total, highest in the western provinces.
When examining the type of service or the product hauled in provincial and regional terms, there are wide divergences. Measured by revenue, the Prairie region had a 64.5 percent share of bulk liquids and bulk gases, Ontario is a distant second at 13.9 percent. The Prairies also led in live animals at 49 percent, Ontario second again at 35.4 percent.
Click to the next page to see charts and a visual breakdown of this data.
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.