Maple Leaf Motoring is a weekly rundown of developments in the world of Canadian transportation. This week: Examining the decline in transport employment; Quebec sues over fatal tanker truck crash; Cervus looks at acquisitions; and Day & Ross opens a new terminal.
Transportation and warehousing payrolls dropped by nearly 15,000 in July in what could signal caution in hiring.
The 1.4 percent drop recorded in Statistics Canada’s monthly Labour Force Survey reverses June’s gains, led by declines in Ontario, British Columbia and Manitoba.
Overall payrolls in Canada dropped by 24,000 in the month, reflecting a broader pause in the labor market.
Brian DePratto, a senior economist with TD Bank, said the decline in transport and warehousing and the employment market as a whole appeared to be consistent with a small, healthy correction.
“This is coming after around two months of pretty decent gains. A little bit of pullback after that doesn’t strike me as unusual,” DePratto said.
The decline follows stronger than expected growth in Canada’s gross domestic product, including in transportation. DePratto said that divergence might suggest that employers are being cautious about hiring.
The survey’s transportation and warehousing data is weighted heavily toward trucking. It remains 5.5 percent ahead of a year ago, suggesting that a weaker freight market hasn’t wiped out the hiring surge from 2018’s market.
July’s transportation data wasn’t universally weak. Payrolls in the sector rose by 0.8 percent in Quebec – or a 13.2 percent jump since July 2018.
Quebec sues Bombardier over fatal tanker crash
The government of Quebec is suing Bombardier and two other transportation companies over a 2016 crash that killed the driver of a fuel truck.
The lawsuit, made public on August 8, seeks to recoup nearly C$1 million in costs connected with the four-truck crash that resulted in an explosion on a section of Highway 40 in Montreal.
News of the suit emerged in the aftermath of fatal crash north of Montreal – involving a truck in Laval earlier in the week on Highway 440.
Four people died after a car struck a semi-truck on August 5. The vehicles struck another truck, leading a fiery multi-car pileup, the CBC reported.
The accident is under investigation, but Quebec’s Ministry of Transport has already moved to change the lane markings. Truckers have called for changes to be made to the highway, where four lanes merge into a single one.
Cervus seeks larger share of Ontario Peterbilt Market
Cervus Equipment (TSX: CERV) had a rough second quarter, but the company may pursue acquisitions to strengthen its transportation segment – which is keeping the company profitable in the face of weak demand for agricultural equipment.
“I see the bottom of the cycle as an opportunity,” CEO Angela Lekatsas told analysts on August 9.
Lekatsas said she favors transportation acquisitions because they provide more value for product support revenue.
Lekatsas did not detail what kind transport acquisition Cervus might seek. But it could involve adding to its existing network of 19 dealerships (14 in Ontario and five in Saskatchewan.)
Fred Hnatiw, vice president of operations for the Cervus transportation and industrial group, said its newest Ontario dealerships have been performing “above expectations.”
Hnatiw said while he expects the market for trucks to remain weak, he said Cervus sees “opportunity to grow market share in Ontario.”
Day & Ross to add capacity with new terminal
Day & Ross broke ground on a new terminal in Moncton, New Brunswick on August 8 that it says will allow for higher volumes and a lower environmental impact.
“Moncton is a critical hub for our operations. This location will play an important role in our overall growth strategy and will help strengthen our position as a leader in the transportation industry,” CEO Bill Doherty said in a statement.
The carrier, which operates extensively in Canada and the U.S., expects the terminal to open in the summer of 2020.