Market Trends of canada road freight transport Industry
Canada's transportation sector soars in 2022 with 17.6% YoY growth, boosted by eased travel policies and urban transit growth
- Canada's transportation and storage sector saw a slow recovery in 2021 with a 1.08% YoY growth, followed by a significant improvement in 2022, with a 17.6% YoY growth by easing travel restrictions, and urban transit growing by 26%. This sector contributed CAD 83.44 billion (USD 61.59 billion) to Canada's GDP in September 2022, which increased to CAD 84.11 billion (USD 62.09 billion) in October 2022. Canada's large size and dispersed population make it crucial to have an efficient and accessible transportation system to connect people and support economic activities.
- The Canadian government has been investing in the sector over the years. In 2021, the government provided an additional CAD 1.9 billion (USD 1.40 billion) over four years (2021-22 to 2024-25) to the National Trade Corridors Fund, which will spur investments toward much-needed enhancements to Canada's roads, rail, and shipping routes and build long-term resilience for the Canadian economy and support internal trade. The government invested in major transportation projects over 11 years (2017–2028), improving all transportation networks' effectiveness, resiliency, and integration.
- The government invested USD 18 billion in new grain terminal equipment in the Port of Montréal in 2022, increasing the number of on-site containers, improving grain-cleaning service quality, optimizing traffic flow in the yard, and increasing capacity for loading and handling containers. It will ensure that transportation and storage facilities in Canada are good so that grain and other agricultural products can be shipped reliably for import and export.
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Gasoline prices in Canada reached an all-time high of 1.59 USD/liter in June 2022
- Canadian retail fuel prices climbed in Q1 2021, pushed higher by rising crude prices and stronger refining margins. The main factor leading to fluctuations in diesel prices was the international demand for distillate fuel. Diesel prices have witnessed the maximum YoY growth of 48.54% in 2022 and reached 1.53 USD/liter. Gasoline prices have witnessed YoY growth of 2.91% in 2022 and reached 1.06 USD/liter.
- Crude oil prices almost doubled in March 2021 compared to the same period in 2020. Over half of this growth occurred during the first three months of 2021. From December 2020 to March 2021, crude oil prices increased by 35% to over 50 cents (USD 0.5) per liter, directly translating into higher wholesale and retail gasoline prices. In 2022, retail gasoline prices fell by 50 cents (USD 0.5) per liter in Q3 as crude prices fell and refining margins contracted. Retail diesel prices declined less because diesel refining margins remained high.
- The growth in gas prices continued in 2022. Canadians are facing record-high gas prices, which is making trucking companies more unaffordable, and operational costs are rising, as fuel is an important parameter for the operational cost of trucking. In 2021, gas prices jumped by more than 50%, pushing the cost of a liter to more than CAD 2 (USD 1.47) in many parts of the country. In 2022, gas prices rose rapidly as the Russia-Ukraine War exacerbated a global supply shortage. Gasoline prices in Canada averaged 0.99 USD/liter from 1992 until 2023, reaching an all-time high of 1.59 USD/liter in June 2022. As per the Canadian Automobile Association (CAA), the average gas price across the country in August 2023 was 169.3 cents per liter.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Green Manufacturing Initiative worth USD 4 million to boost the economy of Canada
- The online food market is exploding in Canada and about 10% of food sales are expected to occur online by 2025
- Canada ranked 7th in the Logistics Performance Index due to a rise in investment and infrastructure development
- Canada strives towards its ambitious goal of doubling exports to 50% by the year 2025
- Growing operational costs in 2022 owing to rising fuel costs due to the Russia-Ukraine War and driver shortages in the country
- The federal government decided to invest USD 547.5 million in the purchase incentive program of Transport Canada for medium and heavy-duty ZEVs
- Increasing gasoline prices along with growing driver wages impacting road freight pricing across Canada
- An increase in energy and petroleum costs on the US East Coast due to the Russia-Ukraine War impacted Canadian pricing
- Retail-wholesale trade, along with construction projects under development, is leading the GDP growth in the country
- Small- and medium-sized enterprises (SMEs) in Canada account for 93% of the manufacturing industry
- Northern winter road challenges, coupled with highway investments and the national highway development, are significantly impacting road infrastructure in the country
- Consumer goods imports in Canada recorded 14.6% growth fueled by higher prices in 2022
- Production of commercial vehicles is increasing despite a slight decline in sales due to residual impacts of the pandemic
- The National Trade Corridors Fund worth USD 4.6 billion to boost road freight volume in Canada
- Road freight is the primary mode of transport in Canada, transporting around 1.3 billion tons in 2022
