Motor carrier profit margins stable despite increased costs

The nation’s motor carriers retained a healthy operating ratio in the third quarter of 2003 despite their rising expenses.

The overall operating ratio (operating expenses divided by operating revenues) for the 2,799 for-hire trucking companies with annual revenues over $1 million remained at 0.93, Statistics Canada records reveal. A ratio greater than 1.00 represents an operating loss. Arguably, in trucking a ratio of 0.95 or less is considered healthy.

Motor carrier operating revenues totaled $5.2 billion in the third quarter, and their operating expenses reached almost $4.8 billion, both up 2% from the third quarter of 2002.

For-hire trucking transportation revenues from international movements decreased 4% to $1.80 billion from $1.87 billion in the third quarter of 2002. Revenues from outbound movements were up 2%, and revenues from inbound movements decreased by 9%. Average operating revenues were at $1.86 million, up from $1.73 million in the third quarter of 2002.

Average expenses were at $1.72 million, up from $1.61 million in the third quarter of 2002. The result was especially driven by increases in average costs of fuel (+13%) and payments to owner-operators (+13%). However, average expenses in purchased transportation decreased 2%, despite the decline in the number of estimated carriers.

The estimated total of 2,799 for-hire carriers reflects a slide from the 2,941 carriers estimated to have been in operation in the third quarter of 2002. There are also more than 6,000 small for-hire carriers (earning less than $1 million annually) and about 36,000 owner/operators in the Canadian trucking market.