Trucking Industry

Trucking Industry

The trucking industry consists of persons and firms engaged in the business of owning and operating motor trucks to transport goods. The industry is composed mainly of 3 elements: contract, private and common carriage. A contract carrier transports goods for one or a limited number of consignors, according to contractual agreements specifying rates of compensation and other terms. A private carrier transports his own goods by his own motor vehicle, eg, raw materials to processing, finished products to market. It is estimated that private carriage is at least as large as common carriage in tonnage moved.

The common-carrier (or for-hire) industry is composed of individuals and establishments that own and operate for-hire motor trucks for the transportation, by road, of any and all goods. Thus, unlike the private or contract carrier, the common carrier serves the general-shipping public. The common-carrier industry provides shippers with full-service, door-to-door delivery, with an enforceable legal obligation to provide service at a published rate to even the smallest hamlet in N America.

History

The Canadian war effort provided a major impetus to commercial trucking. The enormous demand for raw resources, manufactured goods, ships, aircraft and vehicles placed a great burden on Canada's total transportation system. A major labour shortage in the trucking industry developed and the federal government complied with a request from carriers that the industry be declared essential to the war effort, gaining recognition for the industry as a flexible and effective means of commercial transportation. After the war, expansion and improvement of the highway system made it possible for the trucking industry to become a vital part of Canada's TRANSPORTATION network.

Regulation and Operation

Provincial governments determine most of the operating conditions and the regulatory economic environment for intraprovincial carriers, eg, driver qualifications, fuel taxes, vehicle weights, vehicle dimensions, rules of the road, vehicle inspection, securement of loads, vehicle licensing and mandated safety equipment. The authority of the federal government to regulate trucking was established (1954) by a Privy Council decision which stated that such jurisdiction applied to the entire operation of the journey when it crossed provincial or international boundaries. However, since no federal-government regulatory mechanism was in place, jurisdiction was delegated back to the provinces. The only guideline was that each province apply its laws equally to intraprovincial and extraprovincial traffic. As a result of this nonspecific mandate, economic regulation has developed with wide disparities among provinces. When companies or individuals use for-hire trucks to cross a provincial or international boundary, certain federal regulations supersede provincial laws. The federal government also regulates safety standards.

The common-carrier industry provides service among Canada's 52 metropolitan areas, with a population of 50 000 or more, and 4250 smaller centres. All of these points, plus cities in the US with a population of over 47 000, are accessible to shippers either by direct service provided by one carrier or by transferring from one carrier to another until final delivery. The shipper or consignee pays the total freight charges, and the carrier collecting these funds distributes them to each of the participating carriers. The annual operating revenue of the common-carrier segment of the industry was about $9.99 billion in 1992.

The 5 commodities most commonly carried by for-hire trucks in Canada are sand, gravel and crude stone, pulpwood chips, logs and bolts, lumber and sawn timber and fuel oil. Although the average distance for an intercity truck haul in Canada is about 482 km, the reliance on trucks to carry perishable goods over much longer distances has been increasing. Some carriers, specializing in long-distance movements, advertise that shipments leaving Toronto are scheduled for arrival in Vancouver less than 70 hours later.

In 1992 the 7987 for-hire establishments that grossed revenues for the year in excess of $25 000 operated 174 337 pieces of revenue equipment. These units travelled over 4.7 billion km and used nearly 2.2 billion litres of fuel, of which 92% was diesel. The rapid and continuing increase of fuel prices, beginning in 1973, with a concomitant rise in fuel taxes, has brought expenditures for fuel to unprecedented levels. On average, 10% of gross carrier revenue is now spent on fuel; in 1992 for-hire carriers spent over $962.8 million on diesel fuel and gasoline. As countermeasures, truck suppliers have been providing carriers with fuel-efficient vehicles, and suppliers of truck components have been producing air-drag reduction devices, radial tires, synthetic lubricants and modulated fans. Equally important are training programs for drivers, emphasizing conservation. The trucking industry is labour intensive: in 1985 common carriers paid their 93 010 employees nearly $2.65 billion.

The Canadian trucking industry operates in the US as well as in Canada. Canadian carriers operating in the trans-border movement of goods must adhere to both Canadian and American customs requirements and transportation regulations. This necessitates adjustments of federal policy to maintain equitable trade. In Canada, the Canadian Trucking Alliance monitors federal regulations and lobbies the federal government to maintain a level playing field for the industry between the 2 countries. In an increasingly competitive market, many carriers have restructured to focus on core competencies and price reduction. Carriers are establishing integrated networks and eliminating regional operations and facilities. Overall, business relationships are dominated by strategic alliances and partnerships among shippers and carriers.

It is estimated that 70% of manufactured goods moving between Canada and the US are carried by truck. Canadian carriers engaging in this international movement must, among other requirements, apply for US authorization and satisfy the requirements of both US and Canadian customs regulations.