Canada's trucking companies curbing new investment, expansion plans amid weak recovery in North American manufacturing, will likely be smaller industry in 'foreseeable future,' says industry group president
March 15, 2012
(The Ottawa Citizen)
– Canada's trucking companies are curbing new investment and expansion plans amid a weak recovery in North American manufacturing, the head of an industry group said.
"For the foreseeable future, we will likely be a smaller industry," David Bradley, president of the Canadian Trucking Alliance, said in an interview. "People aren't buying equipment to grow, they are buying just to replace stuff that's getting old."
The main difficulty for Canada's trucking industry has shifted from a stronger Canadian dollar to the plunge in factory shipments going to the U.S. from Ontario and Quebec, Bradley said. Factory sales dropped to about $38.1 billion in May 2009 from a pre- recession peak of $53 billion. A Statistics Canada report March 16 may show that sales exceeded $50 billion in January for the first time in more than three years, according to a Bloomberg survey of economists.
"Provinces like Ontario, Quebec, the auto manufacturing, the forestry, the mills, have suffered, and so it's going to be a long road to come back from that," Bradley said. His organization has 4,500 member companies that employ 150,000 people, with the in dustry handling two-thirds of the goods traded with the U.S.
Trucking business with the U.S. fell by about 30 per cent in the last recession and about half of that has returned since, Bradley said.
"The elephant in the room is always the U.S. economy, and the signs seem to be a little better lately, just at the same time that Canada perhaps seems to be slowing a little bit," he said.
The industry is still poised to benefit from a shift in Canada's economy away from manufacturing toward increased resource production as commodity prices rise and companies import more consumer goods from countries such as China, Bradley said.
"We will be smaller, some of the players will change, but ultimately, what is delivered and what people consume will be moved by trucks," he said. "I am still very bullish on the industry, it just may look different and be a bit smaller than it was."
Bradley testified to lawmakers in Ottawa Wednesday along with Groupe Robert Inc. president Claude Robert, who said that the focus on commodities over manufacturing may damage the economy.
"We need to stop exporting all these commodities," said Robert. "It looks good, but it's not creating employment."
His family-controlled company, based in Boucherville, Que., just outside of Montreal, was founded in 1946 and has about 1,100 trucks and 3,000 trailers.
"We used to have three glass companies in Canada," Robert said. "If you want to break a glass in Canada, it's an American glass now," he said. "It's the same for a lot of things. That's a little picture of what's going on."
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