Cheap trucks have become more important for Canada’s economy, but there’s still room for growth as new trucks are becoming more popular, especially for large trucks and the trucks themselves.
“There’s definitely a demand for those types of vehicles,” said Scott Worsley, senior vice-president of the Canada Trucking Association, which represents Canadian truckers.
“They are very attractive.”
Trucking is a major source of jobs for some in the country, but not for all.
Canada is one of only a few countries where the unemployment rate for truck drivers is higher than the average Canadian’s.
There are some good reasons to be skeptical about the benefits of cheap trucking.
There’s little incentive for truckers to take a pay cut to work at low wages.
Some of them may be overqualified for the job, and others may simply be willing to take on more of the costs of transporting their goods.
Even if you can afford to pay the lower wages, there’s no guarantee that you’ll get the benefits.
In an era of ever-increasing consumer demand, Canada’s trucking industry is facing a severe shortage of trucks.
“I think we’re going to see more and more trucks being out of service,” said Brian Daley, chief executive officer of the Canadian Trucking Council, an industry group.
“It’s going to be the trend.”
The truck industry is still relatively young.
It employs about 3,500 people across Canada, or about 3.3 per cent of the country’s workforce.
The industry is expanding in other ways, too, including through the adoption of new technology.
“This is a huge opportunity for Canada to be a global leader in delivering cargo in the next decade,” said Bill Prentice, president and CEO of the North American Trucking Associations, which includes Canadian trucking companies.
“We see the emergence of many new entrants in the trucking sector and many new technologies that will help us to deliver these products in a more cost-effective manner.”
Some of the biggest gains in trucking over the last decade have come from newer and smaller truck manufacturers, including General Motors, General Motors Canada and Fiat Chrysler.
GM is the largest manufacturer of small trucks, with a fleet of around 50,000 trucks.
Fiat Chrysler is now the largest U.S. auto company with a total fleet of almost 100,000 vehicles.
“The growth of the industry has been great and the impact of these investments is going to continue,” said Prentice.
The number of new trucks being produced is expected to double in Canada over the next two decades, with more than 3,000 units being delivered this year alone.
But for the industry to be able to compete with the United States, the cost of trucking must go up.
Canada has already seen some of the cost increases.
A 2014 study from the Canadian Federation of Independent Business found that trucking operators in Ontario were paying an average of $1,200 per truck for fuel, which is the highest in the world.
“For trucking, that’s a lot of money,” said Worsleys.
“But it’s just not sustainable, so we’re looking at a very difficult time for the truck industry.”
But it’s not just about trucking prices.
The biggest costs for trucking are related to the infrastructure that makes it possible to deliver trucks, said Paine.
“That’s not going to come from cheap trucks,” said Paul Wessels, president of the American Truckers Association, a trade group that represents truckers in the United State.
“A truck that costs $2 million in Canada is going $1 million in the U.K. or $2.5 million in Mexico.”
The Canadian government has taken a lot out of the truck business, including its own, including the price of its diesel fuel.
As a result, some companies have started to shift away from the old-style trucks and into more modern trucks that can be driven for a fraction of the price.
But it may not be long before the price tag of a new truck will start to creep up again, Prentice said.
“When it comes to fuel, we’re certainly in a situation that we’re starting to see a significant change.”