New Regulation Regarding Motor Carrier Safety Fitness

A new motor carrier safety fitness regulation modifying the Motor Vehicle Transport Act took effect on January 1, 2006. This regulation allows provincial authorities to

“a) issue a unique national Safety Code number to each extra-provincial motor carrier undertaking that operates vehicles that are plated, or must be plated, in the province under the jurisdiction of the provincial authority; and

b) develop and maintain, for every extra-provincial motor carrier undertaking that is based in the province and that holds a safety fitness certificate, a motor carrier profile that contains the information set out in section 2 of Part C of NSC Standard #14.”

The regulation covers all trucks, tractors and trailers over 4 500 kg, or any commercially operated bus designed to carry over 10 seated passengers, including the driver.

Thus, each province must maintain road safety records for all extra-provincial carrier registered in their respective province. This does not preclude provincial authorities from also maintaining records for intra-provincial motor carriers operating under their jurisdiction, as is already the case in some provinces.

Information will be collected by provincial authorities and be made available to the general public. Any road safety-related incident must be reported to the provincial authorities the carrier is registered with. For example, if a Quebec extra-provincial carrier is involved in an accident in Saskatchewan, the authorities in that province must contact those in Quebec who, if warranted, will update the carrier’s safety fitness certificate.

Before issuing any safety fitness certificate, provincial authorities must assign extra-provincial motor carriers a safety rating, such as “satisfactory”, “satisfactory unaudited”, or “conditional”, as per section 3 of Part C of NSC Standard #14. Provincial authorities must also require certain information as per section 4 of Part C of NSC Standard #14, such as written proof that a carrier holds minimum liability insurance coverage.

_______________________________
Sources : Transport Canada

Record Results for TransForce in 2005

The TransForce Income Fund (TSX : TIF.UN), a Canadian leader in transportation and logistics, announced on February 10 record results for the fourth quarter and the year ending on December 31, 2005.

During the fourth quarter of 2005, TransForce earned 424.8 million dollars, compared to 339.2 million dollars in 2004, a 25% increase. EBITDA (earnings before interest, taxes, depreciation and amortisation) was 60.2 million dollars for the fourth quarter, a 42% increase, compared to 42.5 million dollars for the same period the previous year.

During the fourth quarter, cash flow was 56.5 million dollars, an increase of 46%, compared to 38.7 million dollars for the same period the previous year.

For the exercise ending December 31, 2005, TransForce’s revenues reached 1.5 billion dollars, an increase of 35% compared to revenues of 1.1 billion dollars for the previous year. During that period, EBITDA went from 141.2 billion to 200.6 billion dollars.

Cash flow from operating activities was 174.2 million dollars in 2005, compared to 121.4 million dollars, an increase of 44%.

During the exercise, TransForce’s regular distributable cash increased from 98.2 million dollars in 2004 to 124.6 million dollars in 2005. Based on regular distributions, the payout ratio for 2005 was 78.8%, compared to 77.6% for the previous year. After factoring special distributions, the payout ratio was 87.9% for the exercise ending December 31, 2005 and 81.3% for the previous year.

During 2005, income before dividends on tracking shares increased to 150.2 million dollars, or $2 per diluted share, from 77.7 million dollars, or $1.13 per diluted share in 2004.

TransForce’s Fund announced an increase of its monthly distributions from $0.1175 per share to $0.125 per share. Payment will be made on March 15, 2006 to all shareholders registered as of February 28, 2006. Annualized distributions therefore increased from $1.41 per unit to $1.50 per unit.

_______________________________
Sources : TransForce

Profile of Canadian Truck Drivers

As we alluded to in a previous article on the effects of climate change on the freight transportation industry (AccessTransport411, Volume 1, Nº7), road transport already play a major role and called upon to increase in importance in the coming decades. To shed further light on this industry, Statistics Canada has just published the results of a study in Perspectives on Labour and Income giving us a profile of trucking in Canada.

According to this study, road freight represents over 53% of all Canadian exports and 78% of Canadian imports. But in spite of the sector’s activity, the dearth of a qualified workforce remains a major issue. According to the study, the shortage can be attributed to the growth in the industry, an ageing workforce, and poor recruitment due to the unpopularity of the truck driving trade. The issue of driver recruitment stems in part from the new hours of service regulations previously discussed in this newsletter (AccessTransport411, Volume 1, Nº6).

In 2004, there were approximately 271 000 truck drivers, mostly males. Four out of five were salaried drivers, the remainder were owner operators. Approximately 60% were employed by companies dedicated to road freight transportation.

Also in 2004, the average age of salaried truckers was 42, compared to 45 for owner operators. When compared to the national average, 18% of truckers were 55 years of age and up, compared to 13% for the Canadian workforce. For the first time, the number of truck drivers over 55 outnumbered those under 30, suggesting that drivers will be retiring shortly and in large numbers.

On one hand, based on 2001 statistics, it appears that truckers stay on the job market longer than active male workers 65 years of age and over. However, on the other hand, the shortage of young truck drivers is more worrisome: in 2004, truck drivers aged 25 or less represented less than 5%, compared to national active workforce average 15%. Also, only a quarter of truck drivers were aged between 15 and 34, compared to 37% for the national average.

The difficulty associated with recruiting young drivers is in part attributed to the minimal age imposed by transport companies hoping to cut down on their insurance costs. Many companies set the age limit higher than the requirement in Canada and the US of between 18 and 21 years of age.

Other factors are affecting the shortage of young drivers, namely inferior social benefits (related to retirement) compared to those of national average, strict cross-border security requirements, as well as hours of service that are longer and more irregular that those of the national average.

______________________________
Source : Statistics Canada