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Over-capacity blamed for industry's woes.

Add the list of woes plaguing truckers across Ontario to the special economic problems facing Sault Ste. Marie, and you have an industry in trouble, say representatives of two trucking firms with head offices in the Sault.

Joe Bickler, manager of Steel City Truck Lines, says his company is running close to capacity, but it is not making the profits it saw a few years ago. He blames the decrease on the deregulation of the industry, the value of the Canadian dollar and direct competition from American transportation companies.

"We were quoting the same rates a few years ago as we are working with today, but then we were getting 25 cents on the American dollar. Now it's down to eleven or twelve," he says.

And although local drivers were not involved in recent border-crossing blockades to protest government policies, they suffer the same ills as their southern Ontario counterparts, according to Bickler.

"There is no protection for the transportation industry the way it is now," he says. "We all have long arms, and we reach into each other's territories."

Too many truckers and not enough goods to ship is how Bill Siddall, terminal manager of Trans-Provincial Freight Carriers, sums up the problem. The result is cut-throat competition to gain market share, and an industry that is feeling the pinch.

The major commodities moving out of the Sault are steel, paper and wood products destined for southern Ontario and the American Midwest. All three industries are in decline, which has an immediate affect on the transportation sector.

There is some debate among the transport companies in the Sault about the role of American competition in the industry's decline.

Siddall says his company, which ships primarily within Ontario, is not affected much by American competition. That is because American trucks which deliver goods into Ontario can return to the States loaded, but once they have discharged their loads they cannot haul to other Canadian destinations.

In addition, Siddall points out that Northern Ontario's unique market depends heavily on big payloads of raw materials - lumber, steel and ores. The multi-axle trailers which carry those loads have been designed specifically for Ontario roads, and few out-of-province companies have equipment as well-suited to the job.

Bickler's situation is different. Steel city, which does ship into the U.S., has faced growing competition in the past few years from American carriers which are hauling steel and lumber products from Sault Ste. Marie to American destinations.

"We do compete over there (the U.S.), but the advantages are all on their side," he says, quoting fuel, labor, insurance and social security costs. "The American operators compete really well with us in both steel and lumber."

Ron Raynor, owner of SalRon Equipment, a small company with seven trucks, sees the industry's situation differently.

"The situation for the trucking industry is deteriorating badly, but the problem is too many carriers, not competition from Americans," he says.

Raynor's trucks haul within Ontario as well as from Northern Ontario into the U.S. He finds the profit margins at least as good hauling into the States, despite the fact that he usually returns empty.

Raynor says his greatest challenge is to make a profit hauling goods back to Sault Ste. Marie from southern Ontario. He says he can charge more to carry goods from Cambridge to Orillia than from Cambridge to the Sault because competition for the trip north is fierce.

Raynor believes the real potential for Sault Ste. Marie's transportation industry is in warehousing and distribution. The city is centrally located, with rail, water and highway links in all directions.

Siddall of Trans-Provincial agrees in principle.

"Draw a 620-mile circle on a map, and we're central to a lot of places," he says. "We can provide overnight service to anywhere in Ontario, or to Montreal, Detroit or Chicago."

However, Siddall does not believe the Sault will have much luck attracting warehousing and distribution operations. The manufacturing sector is moving away from warehousing to direct-delivery, and Sault Ste. Marie has been unsuccessful so far in attracting major manufacturing businesses.

What will the long-term future be for the Sault's trucking industry?

The answer to that question is obviously tied to the economy of the troubled city, and there is both discouragement and determination being expressed by the truckers themselves - as well as a dose of bitterness.

"My crystal ball is a little fogged up by all of the things our government is doing, or maybe not doing, to get our economy going," says Bickler.
COPYRIGHT 1991 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Transportation Report; trucking industry
Author:Dunning, Paula
Publication:Northern Ontario Business
Article Type:Industry Overview
Date:Dec 1, 1991
Previous Article:Industry's survival credited to self-unloaders.
Next Article:Thunder Bay, Timmins airports under expansion.

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