SASKATOON – Prairie truckers are gearing up for a jump in business once the Crow rail subsidy is gone.
When farmers are faced with paying the full cost of shipping grain by rail, trucking rates will suddenly become much more competitive, say industry officials.
“Our range is going to extend by maybe 400 to 500 kilometres beyond what it is now,” said Roger Quast, president of Shepherd Bulk Carriers of Calgary, adding that trucks are now competitive with trains for hauls of up to about 300 km.
But he isn’t about to rush out and expand his fleet until the future comes into better focus.
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“We’re still waiting to hear from our customers, who are looking at a lot of options right now,” he said. “We feel it’s going to be more business but we’re going to wait and see.”
Bob Drinnan, general manager of the Alberta Trucking Association, said the industry has always been opposed to market-distorting subsidies, and there’s no doubt the Crow has hurt truckers.
“Trucks were cut out of the medium-length haul because the only way producers could collect the subsidy was to ship through the local elevator,” he said.
Truck to best deal
Once the subsidy is gone, farmers will likely find it pays to truck their grain 10 or 15 elevators down the line to whichever company or facility is offering the best deal, he said. But it still won’t be economical to truck all the way to Vancouver or Thunder Bay.
Drinnan also expects widespread abandonment of branch lines and small elevators will mean more grain moving by truck to large inland terminals. There could also be more business hauling feed grains and livestock if farmers grow less export grain.
Saskatchewan’s commercial truckers are also expecting an increase in grain business, but according to Warren Smith, general manager of the Saskatchewan Trucking Association, they don’t expect to be the only ones out on the road.
Fleets increased
“Certainly we realize there will be a requirement to move more by truck and we anticipate a good portion of that will be handled by commercial truckers who will have to increase the size of their fleets,” he said. “But we also realize the farm community will probably purchase their own trucks and trailers to some extent to fill the void.”
Jim Street, owner of Tri-Star Transport Ltd. of Saskatoon, expects a lot of the additional trucking will be done by farmers because they can run for less than commercial carriers, who have significant overhead and administration costs.
“If there’s a greater influx of producer carriers and if they’re going to lowball the rates, I can see it being tough on the larger, commercial carriers,” he said. “We definitely make it on the backs of farmers, but the other side of it is that’s all we have to make a living.”
However Guy Deleurme, president of GDT Trucking of Winnipeg, isn’t so sure farmers will be rushing into the trucking business. If they just have eight or 10 semi-loads a year to haul, it’s hard to justify investing $100,000 for a truck and trailer unit, he said.
“Most guys will just hire because if it doesn’t go all that far you can usually hire the truck for $100 and then it’s hauled,” he said.
He thinks a lot of the new business in Manitoba will consist of trucking grain 80 or 100 km to just across the U.S. border, where it will be put onto trains for shipment to the end-user.
The Saskatchewan association is developing a training program for farmers who have never operated five-axle equipment, Smith said, adding farmers have been coming forward and asking for advice and training.
