Daily Economic Comment - Keep on Truckin’
Posted By: Todd Hirsch Senior Economist, ATB Financial Apr 3, 2012
The movement of goods and materials is something that most of us take for granted, but without a reliable and profitable transportation sector, Alberta’s economy would stall. Trucking makes up an important part of overall transportation in the province, with both revenues and
expenses rising over the past few years.
Overall revenues for Alberta’s trucking companies rose to $2.18 billion in the fourth quarter of 2011. At the same time, total expenses rose to $1.89 billion. The graph below shows revenues and expenses over the past three years, not adjusted for seasonality. Distinct drops in revenues can be noticed during the second quarter of each year, accounting for the spring thaw and the drop in trucking services to oil and gas wells.
Expenses as calculated by Statistics Canada include fuel costs, wages, benefits, and other expenses. While fuel costs have been rising lately, they still accounted for only 17.9% of trucking expenses in the fourth quarter of 2011. Wages and benefits made up 26.4%, and other expenses accounted for the balance.
The difference between revenues and expenses in the trucking industry was pinched during the downturn of 2009, shrinking to only $121 million during the second quarter of that year. But with the economic recovery, margins have once again improved, rising to $377 million in the third quarter, and $298 million in the final quarter of last year. This reflects the ability of trucking companies to command hire transport fees—and a willingness of customers to pay them.