Top carrier costs continue to eat away at operating margins
OTTAWA, Ont. — The nation’s largest for-hire motor carriers continued a worrisome trend in the fourth quarter of 2007 as the growth in their expenses exceeded that of revenue, according to a report released today by Statistics Canada.
Canada’s top motor carriers — 97 Canadian-based trucking companies earning $25 million or more annually — generated operating revenues of $2.6 billion and operating expenses of $2.4 billion in the fourth quarter.
The year-over-year increases in both operating revenue (+6%) and operating expenses (+7%) were similar to those observed for the first three quarters of the year.
During each quarter of 2007, these carriers have experienced growth in expenses that has exceeded that of revenue, resulting in lower operating profits.
In the fourth quarter, the operating ratio (operating expenses divided by operating revenue) was 0.95 compared to 0.94 the previous year. That is just at the edge of what is considered healthy for trucking companies.
A ratio greater than 1.00 represents an operating loss.
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