For-hire revenues down 9%, but expenses drop, too

OTTAWA (April 24) — With an operating ratio of 0.93, Canada’s for-hire industry did reasonably well in the third quarter of 1998. It wasn’t long ago that 0.96 — or worse — was the norm, after all.

But, according to the latest Statistics Canada report, that OR was unchanged from the third quarter of 1997. Any ratio under 1.00 represents an operating profit.

StatsCan says the report covers an estimated total of 2370 Canadian for-hire carriers with annual revenues of $1 million or more, representing total revenues of $3.8 billion. The estimate is based on 756 carriers which were actually surveyed in 1998, 328 of them hauling general freight, 428 of them specialized loads. Some 686 were surveyed in 1997.

Specialized carriers did slightly better in both 1997 and 1998, with an OR of 0.92.

There’s a slightly darker side to the picture, however. Despite a 15% increase in the number of million-dollar carriers over 3Q 1997, total operating revenues for these companies grew only 4%. Nonetheless, average operating revenue and average operating expenses per carrier fell at the same rate — by 9% — compared to 3Q 1997, to $1.6 million and $1.5 million respectively.

Among available details, the 428 specialized carriers surveyed spent an average of $900,467 on salaries and wages in 3Q 1998, compared to $1,030,928 spent in 3Q 1997 by only 388 firms, a drop of about 10%. But payments to owner-operators – representing about 25% of the total paid in salaries to other workers — fell by 20% in that same period, StatsCan says.

For the 328 general freight carriers surveyed in 1998, maintenance expenses averaged $567,988 for the third quarter, little changed from the average expenditure in 3Q 1997 of $578,523 by 298 companies.