Economy

What the U.S. Recovery Means for Freight Exporters

With the American economy on the mend, transportation is poised to capitalize on the upswing in exports to the south

Written by Allan Britnell

At long last, the U.S. economy seems to be on the road to recovery, and experts are predicting that will be a big boom to Quebec, with the local trucking industry playing a pivotal role.

In its Spring 2013 Global Export Forecast, Export Development Canada (EDC) projected Quebec’s export market to grow by 8% in 2013 and 6% in 2014. “The U.S. buys two-thirds of all Quebec exports, and with their recovery gaining momentum through 2013, we’re looking at a solid export increase after a few years of low export growth,” according to EDC chief economist Peter Hall.

EDC noted that the transportation industry in particular was poised to capitalize on the export boom. EDC projects the transportation sector to see 13% growth this year and an additional 16% in 2014.

With U.S. housing starts expected to jump by one-third this year and another 24% next year, demand for lumber and wood panels (plywood, wall sheathing, etc.) will jump dramatically, and Quebec is second only to British Columbia among Canadian provinces’ total forestry exports. Demand for mineral mining for steel and aluminum production will also increase sharply to supply materials for the housing market. And most of those raw goods will be shipped on trucks: the Canadian Trucking Alliance (CTA) estimates that 80% of all Canadian exports to the U.S. are delivered by truck.

One family-owned trucking company, Brave Transport Inc. based in Waterville, Que., south for Sherbrooke, shared the enthusiasm to the projected rise in exports in an April blog post writing, “Small family-owned businesses, like those specializing in freight transport to Quebec, will see increased business as a result.”

Trucking is big business in Canada. The CTA claims it’s a $65 billion industry that employs some 400,000 drivers and support staff (54,000 in Quebec alone). But many of those are owner-operators or small, regionally based shippers: more than 40% of freight carriers have annual revenues of less than $12 million.

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Originally appeared on PROFITguide.com