Trucking productivity soars over 25 years: Report

OTTAWA¬ — The above headline is good news for shippers, but in the following context, not so good for some truckers’ bottom line.

According to the first ever study by the Conference Board of Canada’s Centre for Transportation Infrastructure, trucking rates across Canada dropped an average of 1.4 percent per year between 1981 and 2003.

So while Canadians are getting far more freight for their buck, competition among truckers is stiffer than ever and in turn playing havoc with rates at a time of unprecedented rising fleet costs. And the Conference Board likes it that way.

Says Mario Iacobacci, the director of the Centre for Transportation Infrastructure: "The exceptional productivity performance … is due in large part to the sweeping changes in public policies regulatory reforms during the late 1980s through the 1990s.

"The conclusion … is that policy and regulatory regimes in these sectors should continue to promote market-oriented organizations, minimal economic regulation, and competition between carriers and modes of transportation."

Between the lines, he’s saying deregulation and minimizing barriers to entry make for better trucking.

And trucking’s not the only industry watching prices sink. Rail prices fell by 70 percent in real terms between 1981 and 2006 and airfares sunk 25 percent.

The Conference Board reports that "productivity" in trucking rose 1.8 percent per year; while rail productivity rose by about 3.6 percent annually and air about two percent per year. Productivity in other parts of the economy rose by only 0.2 percent per year, according to the study.

"The payback from high productivity growth," the study says, "is lower prices for end users."

The productivity figures do not include the safety and environmental costs associated with transportation activities. Safety and environmental factors will be part of a forthcoming study addressing social efficiency issues.