TC 2008 Operating Costs of Trucks in Canada in 2007 PDF

Final Report
OPERATING COSTS OF TRUCKING

AND
SURFACE INTERMODAL
TRANSPORTATION IN CANADA
Submitted By:
By Ray Barton Associates Ltd.

In association with
Logistics Solution Builders Inc.
and
The Research and Traffic Group
March 31, 2008

Operating Costs of Trucking and Surface Intermodal Transportation in Canada
TABLE OF CONTENTS
TABLE OF CONTENTS .................................................................................................. 2
List of Exhibits ................................................................................................................. 3
1.0 Introduction ............................................................................................................... 4
2.0 Truck Costing ............................................................................................................ 5

2.1 Methodology ......................................................................................................... 5
2.2 Cost Components Summarized ........................................................................... 17
2.3 Overview of Findings and Trends........................................................................ 30
2.4 Comments about Reliability of the Unit Costing Method ...................................... 31
3.0 Effects of Fleet size ................................................................................................. 36
4.0 Private vs. For-hire fleets......................................................................................... 38
5.0 Owner-Operator Cost Survey .................................................................................. 40
6.0 Rail .......................................................................................................................... 43

6.1 Rail Rates ............................................................................................................ 43
6.2 Rail–Truck comparisons ...................................................................................... 46
7.0 Marine Movements .................................................................................................. 49

7.1 Halifax-Boston ..................................................................................................... 49
7.2 Montreal-St John’s ............................................................................................... 50
7.3 Sept-Iles – Trois Rivières ..................................................................................... 51
7.4 West Coast Movements ....................................................................................... 51
7.5 Cross Lake Ferry Operation Oswego-Toronto ..................................................... 51
APPENDIX A
SUMMARY OF BASE CASE TRUCK COST ANALYSIS RESULTS ............................. 52
APPENDIX B
RATES FOR HAULING CONTAINER CHASSIS SPECIFIED CORRIDORS................. 67
APPENDIX C
SUMMARY OF OWNER OPERATOR ANALYSIS RESULTS ....................................... 70
APPENDIX D
COSTING ANALYSIS OF OSWEGO-TORONTO FERRY OPERATION ....................... 77
2
List of Exhibits
Exhibit 2.1: Equipment Configurations for Case Studies...................................... 6
Exhibit 2.2: Main Population Centres Assumed For Each Region ...................... 17
Exhibit 2.3: Representative Driver Wages .......................................................... 19
Exhibit 2.4: Fuel Costs ........................................................................................ 21
Exhibit 2.5 Purchase Cost of Power Units .......................................................... 24
Exhibit 2.6 Purchase Costs for Trailer Units ....................................................... 25
Exhibit 2.7: Licencing Fees and Weights ............................................................ 27
Exhibit 2.8: Unit Tractor-trailer Cost Comparisons Over Time ............................ 30
Exhibit 5.1: Owner-operator Costs ...................................................................... 40
Exhibit 5.2: Comparison of Owner-operator and Fleet Vehicle Costs ................. 42
Exhibit 6.1: Intermodal Rates for Selected Corridors CN Rail ............................. 44
Exhibit 6.2: Intermodal Rates for Selected Corridors CP Rail ............................. 45
Exhibit 6.3: Comparison of Truck Costs and CN Rail Rates Selected Corridors . 46
Exhibit 6.4: Comparison of Truck Costs and CP Rail Rates Selected Corridors . 47
Exhibit 7.1 Comparison of Marine Rates and Truck Costs Halifax-Boston ......... 49
Exhibit 7.2: Comparison of Marine Rate and Truck Costs Montreal –St Johns. . 50
3
OPERATING COSTS OF TRUCKING AND

SURFACE INTERMODAL TRANSPORTATION IN CANADA
1.0 Introduction
Since 1972, Transport Canada has sponsored research and publication of

“Operating Costs of Trucks in Canada”, a report series that was expanded in
1986 to include comparison of direct trucking to rail intermodal transportation.
The most recent edition of this study was prepared for Transport Canada by
Logistics Solution Builders Inc. in 2005.
For the 2007 edition of this project, the title is changed to “Operating Costs of
Trucking and Surface Intermodal Transportation in Canada” and the scope of
investigations has been enlarged.
Objectives for this project are as follows:
 Provide estimates for year 2007 Operating Costs of Trucks and Intermodal
Transportation Services in Canada.
 Reflect differences in the truck operating cost structure associated with a

sample of provincial and territorial regions in Canada.
 Reflect the comparative truck operating cost structure for International (US
Based) operations.
 Depict differences, if any, from base case trucking service options

including use of owner operators, variations with fleet size, and private
trucking costs compared to for-hire trucking costs.
 Provide comparative intermodal transportation service costs for:

o Specified rail intermodal services and direct trucking costs
o Specified short sea shipping services and direct trucking costs
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2.0 Truck Costing

2.1 Methodology
The approach used for this update of trucking costs is the same methodology
used since 1972, and widely accepted by the trucking industry and private fleets
for evaluating operating costs to provide trucking services to users.
Documentation of this approach has been widely described in prior editions of

Operating Costs of Trucks in Canada. Furthermore, this method has been
presented to open industry seminars, called the “Know Your Truck Costs” series,
sponsored by the Canadian Industrial Transportation League (now CITA), the
Propane Gas Association of Canada, the Alberta Motor Transport Association
and the British Columbia Trucking Association. In this context, the method has
been widely exposed to industry and generally accepted in these forums.
We follow essentially an activity based approach that itemizes each case study's
distance travelled, operating speeds, fuel consumption rates, and all additional
work hours not driving (i.e. waiting time, loading / unloading time) where drivers
and equipment are "on duty".
The foregoing activity measurements result in specified costs for over the road
operation of trucks. Vehicle related costs include driver costs, fuel costs,
repairs, tires, equipment ownership and licensing. The latter two costs are
proportional to the number of vehicles needed to haul a given volume of freight,
within a given timeframe.
In addition to the direct hauling activity related costs, provision is made for
assignable indirect costs for the fleet business. These include over-all
administrative activity (management and supervision, billing and accounting,
information technology, sales and marketing, and provision of business premises
for operating the fleets), interest costs for moneys invested in equipment and for
working capital of the business, insurance costs and an operator profit margin.
Whether the trucking operation is for-hire, or part of a private fleet, providing an

operator profit margin in the assessment of over-all operating cost (or user cost)
covers the costs associated with the fleet business owner earning a "return on
investment". -- either an operating margin to cover return for investment in a for-
hire fleet, or for "opportunity cost" when a firm invests monies in a private fleet
operation. In 1972, industry profit margins of for-hire trucking were generally
significantly higher than is common today -- hence earlier Operating Costs of
Trucks in Canada editions set operator profit at 10% of revenues.
Currently, operator margins tend to be lower, perhaps averaging from 2.5 to 5%

of revenues for industry leading fleet operations. Exceptional trucking operators
can still earn margins around 10% -- for example these are comparable to
5
margins reported by express transportation companies operating a premium

service (e.g. trucking division of UPS, according to Transport Topics’ Top 100 for
2004, for example).
As compared to the earlier studies, the current study compares three margin
levels: 10%, 5% and 2.5% operator profit margin -- enabling the user to tailor the
costs to their understanding of the particular trucking market being benchmarked.
To enumerate all of the foregoing cost components, an Excel based costing

spreadsheet is used to calculate annual component costs for a single vehicle --
operated as part of a fleet operation -- for each of the following vehicle
configurations shown in Exhibit 2.1. Costs are enumerated as total and
component costs of the vehicle for a year, costs per hour, and costs per
kilometre.
Exhibit 2.1: Equipment Configurations for Case Studies
Five Axle Semi Trailer (Van)
6
Five Axle Semi Trailer (Flat deck or Lowboy)
Five Axle Semi Trailer (Liquid Tank)
7
Five Axle Container Chassis
Six Axle Tridem Semi Trailer (Van)
Six Axle Tridem Semi Trailer (Flat Deck)
8
Six Axle Tridem Tank Trailer
Eight Axle Super B-Train (Flat Deck)
Eight Axle Super B-Train (Liquid Tank)
9
Two Axle Straight Truck (Van)
The calculation is a replica of the methodology commonly used by fleet operators

to determine costs, hence rates to quote customers for undertaking specific
trucking activity. The project consultants have employed this methodology and
used it to develop custom applications to consult within the for-hire trucking
industry, and with operators of private trucking fleets, to undertake feasibility
studies, quote new business, and benchmark cost efficiency of fleet operations.
Input Unit Costs
To implement this methodology a database of factor costs for wages, fuel, tires,
repairs, equipment purchase and other cost inputs is maintained and updated
from one report edition to the next.
This database has never made use of statistical sampling techniques, because of
sampling limitations, but rather is more of an "expert system" designed to capture
and reflect a smaller sampling of data sources, updated and applied to the
database from prior report editions. Because of the number of case study /
regional configurations considered, sample sizes are small and care must be
taken when "parsing" the over-all truck costs down into specific unit cost
components. (see later discussion, section 2.3)
For updating the database to 2007 from values used in the prior 2005 Operating
Cost of Trucks in Canada study, five basic sources of information were
consulted:
1) Truck Fleet Supplier Quotations (Equipment, tires, fuel).
2) Fleet Operator Expert Consultation in all Regions. A telephone survey
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attempted to contact and seek co-operation from between 150 and 200
trucking companies located from various directories, trucking associations
and websites. Of these firms, partial cost data -- primarily related to driver
wage levels but also including all cost components, if the carrier was
willing to discuss these – was secured from 49 trucking businesses.
When one considers that this data is spread across 10 provinces and 2
territories, one can see that -- on average --the sampling is only 4 or 5
firms per region. (see prior discussion of sampling size).
3) Literature Review on the Subject of Driver Costs (rates of pay, working

conditions, benefits, bonuses, etc.) including web references and
employment advertisements.
4) Regulatory Publications (vehicular size and weight restrictions, license

fees, fuel taxation, sales taxes, etc.) -- primarily the JJ Keller Truck Licence
and Tax Manual (Canada Regulations) and the JJ Keller Trucking Permit
Guide (U Trip Ends to Corridors) and review of published literature and
Internet sources such as Statistics Canada, US Department of Energy,
Natural Resources Canada, Bank of Canada and other data sources.
For trucks domiciled in US Regions, on the selected international corridors, unit

costs for inputs were obtained in US currency. These were then converted to
equivalent Canadian currency costs using the average 2007 exchange rate of 1$
US = 1.074781 $ CDN (Source: Bank of Canada).
For operations on international Canada - US corridors, most costs were based on

the assumed home country of domicile for the trucker, except that fuel costs were
based on US cost levels (reflecting ability to purchase fuel in US, taxed at US
rates, for both truckers regardless of domicile).
Vehicle Configurations and Equipment Life Cycle
For the vehicle configurations illustrated in Exhibit 2.1, vehicle specifications can
vary considerably for even a single equipment type. Such variations can reflect
in significantly different costs for vehicle purchase, vehicle repairs and fuel
consumption.
These significant variations are present, when considering the trucking industry
as a whole. Specific fleet operators will be using their own chosen specifications,
engine sizes and other equipment selection preferences. The "mix" of vehicles
on the road will reflect all of these differences, together with a mix of vehicle ages
-- since not all vehicles are brand new.
In order to better standardize Operating Costs of Trucks in Canada, some

general vehicle specifications have been developed -- and these are reviewed
11
every time that the study is updated -- by asking equipment suppliers and fleet
owners whether the assumed basic specifications remain "representative" of
what the majority of the industry is operating.1
The specifications that were used to guide our current discussion with equipment
suppliers were as follows.
Power Unit Configurations
For the regional case studies, cabs were assumed to be NOT sleeper equipped
(for purposes of estimating tare weight and purchase costs). For the longer
distance corridor cases consideration was given to additional costs (and weight)
to add to the basic power unit specifications to reflect a sleeper equipped power
unit.
 TRACTOR FOR A FIVE AXLE SEMI CONFIGURATION: Conventional

configuration, Caterpillar C-13 Series Engine, 380 HP, 13 Speed
Transmission, 40,000 lbs rear end, air ride suspension, 11R24.5 tires,
209” wheel base, 12,000 lbs front axle, GVW approximately 80,000 lbs,
Canada 87,100 lbs. Tractor Tare Weight: 7620 kg
 TRACTOR FOR A SIX AXLE SEMI CONFIGURATION: Conventional

configuration, Detroit Series 60 Engine, 430 HP, 18 Speed Transmission,
46,000 lbs rear axle, air ride suspension, 12,000 lbs front axle, 195” to
210” wheel base, 11R24.5 tires, 4.56 gear ratio, GVW approx 100,000 lbs.
Tractor Tare Weight: 7938 kg
 TRACTOR FOR AN EIGHT AXLE SUPER B TRAIN CONFIGURATION:

Conventional configuration, Caterpillar C-15 Series Engine, 475 HP, 18
speed transmission, 46,000 lbs rear axle, air ride suspension, 12,000 lbs
front axle, 209” wheel base, 11R24.5 tires, 4.56 gear ratio, GVW approx.
140,000 lbs. Tractor Tare Weight: 7938 kg
 TWO AXLE STRAIGHT TRUCK (VAN) SPECIFICATION: 2 Axle Diesel

Powered Straight Truck Cab and Chassis, 24 Foot Insulated Van Box. No
Reefer, Rear Doors, GVW approx. 14,600 kg, Automatic transmission.
1
While new EPA regulatory requirements were introduced in the 2007 model engines, it is too
early to determine the effects these changes have had on fuel economy and vehicle operating
costs, although early industry literature suggests these changes have been minimal (Truck news,
October 2007 Volume 27, Issue 10). While the technology added to the tractor to meet the
regulations weights several hundred pounds, there was little change reported by fleets in the
overall tare weight of their tractors.
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Trailers for Five Axle, Six Axle and Eight Axle Super-B Operations
 FIVE AXLE SEMI VAN CONFIGURATION (TANDEM SEMI TRAILER):

Interior post insulated van, 1 1/8” - 1 ½” insulation, double doors at rear
with 5 hinges per door, anti - rack door locks, vents front and back, air ride
suspension, steel disk wheels, hardwood floors, undercoated, rear gear
black finish, aluminium panels, prefinished white, 2 rows of cargo E-track.
Trailer Tare Weight: 6,418 kg
 FIVE AXLE SEMI FLAT DECK CONFIGURATION (TANDEM SEMI

TRAILER): Outside rail construction with stake pockets and rub rail, load
winches at 3’-0” centres, air suspension, steel disc wheels, hardwood
floor, 1 colour epoxy finish. Trailer Tare Weight: 5,897 kg
 FIVE AXLE BULK LIQUID TANKER CONFIGURATION (TANDEM SEMI

TRAILER): (TC307) 27,275 litres, type 316L Stainless Steel 2 B finish,
bright annealed jacketing, 5” insulation compressed to 4”, dimple style hot
wall, 20” manway, fort vale super vent, 1” pressurization package, 2 x 20’ -
0” S.S. hose trays, spring suspension, steel disk wheels, 1 colour epoxy
finish, walkaround spill dam, curbside ladders, stainless steel fenders,
aluminium catwalk, single compartment. Trailer Tare Weight: 5,942 kg
 FIVE AXLE CONTAINER CHASSIS CONFIGURATION (TANDEM SEMI

TRAILER): 40' - 45' Steel Extendable Gooseneck Container Chassis.
Overall width 96 inches, main frame width 40 inches, Maximum rear
height 48 inches, Twist lock and slide pins meet ISO specifications, Frame
design and steel to ASTM A572 Grade 50 Specification, ICC Bumper,
AAR approved landing gear of 50,000 lb lift capacity and 140,000 lb static
capacity. Trailer Tare Weight: 6800 lbs
 SIX AXLE TRIAXLE VAN CONFIGURATION (TRIDEM SEMI TRAILER):

Interior post insulated van, 1 1/8” - 1 ½” insulation, double doors at rear
with 5 hinges per door, anti-rack door locks, vents front and back, air
suspension, steel disk wheels, hardwood floors, undercoated, rear gear
black finish, aluminium panels prefinished white, 2 rows cargo E-track.
Trailer Tare Weight: 8006 kg
 SIX AXLE TRIAXLE FLAT DECK CONFIGURATION (TRIDEM SEMI

TRAILER): Outside rail construction with stake pockets and rub rail, load
winches at 3’ 0” centres, air suspension, steel disk wheels, hardwood
floor, 1 colour epoxy finish. Trailer Tare Weight: 6804 kg
 SIX AXLE TRIAXLE TANK TRAILER CONFIGURATION (TRIDEM SEMI

TRAILER): (TC407) 36,367 litres, type 316L Stainless Steel 2 B finish,
bright annealed jacketing, 5” insulation compressed to 4”, dimple style hot
wall, 20” manway, fort vale super vent, 1” pressurization package, 2 x 20’ -
13
0” S.S. hose trays, spring suspension, steel disk wheels, 1 colour epoxy
finish, walkaround spill dam, curbside ladders, stainless steel fenders,
aluminium catwalk, single compartment. Trailer Tare Weight: 7,200 KG
 EIGHT AXLE SUPER B FLAT DECK CONFIGURATION (TRIDEM LEAD

TRAILER, TANDEM PUP TRAILER): Outside rail construction with stake
pockets and rub rail, load winches at 3’ 0” centres, air suspension, steel
disc wheels, hardwood floor, 1 colour epoxy finish. Trailer Tare Weight:
8845 kg
 EIGHT AXLE SUPER B LIQUID TANK CONFIGURATION (TRIDEM

LEAD TRAILER, TANDEM PUP TRAILER): (TC 306) Aluminium
petroleum RTAC B-train, 4 compartment, double bulkheads, 20” fill
covers, 4” air internal valves, 4” openable bottomload adapters, 63,500
litre capacity, four 20’-0” hose trays, prepared for vapour recovery, optic
overfill sensors, 36”x30”x28” fitting box (aluminium). Trailer Tare Weight:
10659 kg.
Vehicle Life Cycle for This Analysis
Whether a fleet operator buys a new or used vehicle, and how long it is retained,
is a business decision reflecting the owner's business strategy and the trucking
market segment served. For example, an agricultural producer often purchases
older used equipment and retains it for many years -- reflecting low average
annual mileage characteristics of this hauling, the fact that hauling is very "local"
to the home base, etc.
For most for-hire line haul trucking operations, the "standard" life cycle
management strategy is as follows:
For median utilization of 100,000 miles per year (160,000 km), operators will
purchase new power units and retain them in line haul trucking service for 5
years. After 500,000 to 750,000 miles, (or 800,000 to 1.2 million km) the power
unit will either be sold, or "retired" for use as an urban pick up and delivery unit,
or a yard tractor.
Under the same utilization scenario, trailers will be purchased new and operated
for an average of 8 years.
Medium Sized Fleet Assumption
The presented case studies give annual costs to operate a single vehicle;
however the costs were developed assuming the vehicle is part of a medium
sized trucking fleet. For this reason, indirect costs for administration, interest,
14
insurance and operator margin have been allocated to the single vehicle based
on normal percentages for these cost components within trucking businesses in
Canada and the US. Effects of fleet size on unit costs will be discussed further
in Section 3.
“Terminalling” Productivity Assumptions
For developing truck operating costs as impacted by terminalling (load-unload)

productivity, truck equipment ownership costs during wait time are excluded from
analysis for the reason that the basic equipment utilization criteria, namely total
kilometres travelled annually, implicitly already accounts for these costs. In other
words, it is less feasible for an operator to realize a high number of kilometres
annually as the proportion of equipment time spent loading and unloading
increases.
Terminal productivity does directly influence driver wages and burden costs
because whether the drivers are physically involved in commodity handling, they
must be paid the representative hourly rate during the time involved for waiting to
be loaded or unloaded.
For this study, terminal handling performance is based on the following

parameters:
 Dry Freight in Combination Units: One origin-destination per trip is

assumed, which reduces the time required to handle one payload.
Realistically, the rate of loading-unloading varies with consignment type;
however observation indicates that 4,500 kg per man-hour is
representative of dry freight loading/unloading performance. Assuming an
adequate availability of manpower, a handling time criteria of three hours
for 27,270 kg has been applied to all applicable cases. That is, the driver
will be on the job, but not driving, three hours for a 27,270 kg dry freight
payload.
 Bulk Commodities: A study of various bulk operations indicates that the

following load/unload rates reflect a good average for bulk commodities:
40,900 kg in 1 hour and 15 minutes; 22,700 kg in 45 minutes; 9,100 kg in
15 minutes.
 Dry Freight in Van Straight Trucks The time spent loading and unloading
freight was assumed to be 1 person hour per 1600 kg of consignment.
The above mentioned handling performances are used in the analysis to

estimate the total time necessary during the operations to handle the
commodities. During this time the driver is paid on an hourly rate basis. The
same handling performances have been applied throughout with exception of the
15
container chassis hauling evaluations where a time of 0.75 hours per trip was
applied in total for all loading and unloading activity.
We are also assuming that the only handling cost to the truck operator is the
wages and burden paid to the driver on duty during loading and unloading. The
handling facilities and manpower are considered not to be under the trucker's
management, or if so, that the costs for this operation are recovered against a
“handling charge” and not included in the trucking cost.
Truck Operations Productivity and Cost Factors
 Intra Regional Base Case Trip Distances: The combination units are
assigned a round trip distance of 320 kilometres since they are assumed
to be involved in predominantly "terminal-to-terminal" highway service.
Urban two axle units are assigned a trip distance of 100 kms. These
common trip distances tend to reflect average common operational factors
within the industry -- recognizing there are shorter and longer distance
market segments, for specific operations.
 City Pair Corridor Studies: Costs are developed for one way travel based
on practical route distances taken from PC*Miler. Numbers of one-way
trips annually, which reflect in annual distances travelled by units, reflect
3,000 working hours per unit divided by time required for a single one-way
trip.
These corridor operations are applied to the line haul combination units and not
to straight truck applications.
Annual Operating Distance
Annual operating distance is a convenient efficiency index that reflects factors

such as seasonality, hauling distance, traffic congestion, or urban / inter-urban
operation. This factor is also readily monitored and understood by fleet
operators. For this study, three annual utilization scenarios were undertaken --
designed to reflect Low, Median, and High annual utilization. For line haul
combination trucks, the scenarios reflect:
 Low Annual Utilization (80,000 km per year, or 50,000 miles per year)
 Median Annual Utilization (160,000 km per year, 100,000 miles per year)
 High Annual Utilization (240,000 km per year, or 150,000 miles per year)
 For the city pair corridors, annual mileage reflected a median utilization
based on 3000 worked hours per year, applied to the trip distance.
 In the case of the urban two axle trucks, the utilization levels were 40,000
km; 80,000 km and 120,000 km annually for Low, Median and High cases.
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Base scenarios evaluated in this study reflect paved road operations.
Average payload size was determined by applying the general density

characteristics of the commodity type to the gross vehicle weight and with regard
to the vehicle tare weight.
Local Cost Basis in Each Province and Territory
Main population centres of each region were assumed as the base of operation
for assessing local costs such as fuel, wages, etc.
Exhibit 2.2: Main Population Centres Assumed For Each Region

Region Assumed Population Centre
British Columbia Vancouver
Alberta Calgary / Edmonton
Saskatchewan Regina / Saskatoon
Manitoba Winnipeg
Ontario Toronto
Quebec Montreal
New Brunswick Moncton, St John
Nova Scotia Halifax / Dartmouth
Prince Edward Island Charlottetown
Newfoundland St John's
North West Territories Yellowknife
Yukon Whitehorse
The life cycle policies previously discussed were used to assess equipment
performance and maintenance cost levels -- to make the scenarios
representative of the average vehicle in an actual fleet. Hence maintenance
costs reflect averages for tractors in the first five years of their life and trailers in
their first eight years.
For assessing vehicle write off costs, depreciation was related to purchasing new
equipment and depreciating power over 5 years and trailers over 8 years.
2.2 Cost Components Summarized
As previously described, a unit cost review was undertaken by Logistics Solution

Builders, to update all unit cost components for this project to 2007 average cost
levels.
17
As noted previously, this update of Operating Costs of Trucks in Canada is built

partially upon the regularity of updates -- hence the study was commenced using
the data base of unit cost information compiled over the years, in previous
studies, as a starting point of inquiry. This permitted us to seek information
concerning absolute levels of cost, but also to understand changes over the past
two years -- down to the regional and specific equipment configuration level of
inquiry.
Data sources consulted for these efforts included review of published literature
and web based information concerning the trucking industry, contact with
trucking associations, information shared with us from almost fifty for-hire
trucking businesses and contact with trailer manufacturers and dealers, power
unit suppliers, tire suppliers and a major oil company's national fleet sales
department.
Driver Costs
Samples of 2007 hourly and distance base wage rates for drivers in regions were
obtained from:
 Discussions with fleet operators in all the regions.
 Reference to available collective bargaining results published in internet
references and trade publications.
 Review of corporate web-sites, many of which publish driver
compensation information.
 Review of newspaper classified advertisements and web-based driver
recruitment sites for carriers and driver pools.
 Review of transportation and other wage statistics from Statistics Canada,
the US Department of Labor, Published Teamsters Wage Rates, and US
County and State Wage Survey Statistics.
Considering these sources, and in light of the driver wage database from the
prior study, Logistics Solution Builders developed our best estimate for average
driver wages applicable for the hauling cases in our study.
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The 2007 base wage unit costs were as follows:
Exhibit 2.3: Representative Driver Wages
REPRESENTATIVE DRIVER WAGES ACROSS CANADA (mid 2007)
BULK COMMODITY GENERAL COMMODITY
5-Axle 5-Axle 6-Axle 6-Axle 7/8-Axle 7/8-Axle 5-Axle 5-Axle 6-Axle 6-Axle 7/8-Axle 7/8-Axle
Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles Vehicles
per hr per km per hr per km per hr per km per hr per km per hr per km per hr per km
$ cents $ cents $ cents $ cents $ cents $ cents
British Columbia $21.50 28.58 $23.50 28.89 $25.00 29.21 $22.00 28.58 $24.00 28.89 $25.50 29.21
Alberta $19.50 27.50 $21.50 28.35 $23.50 30.06 $20.00 27.50 $22.00 28.35 $24.00 30.06
Saskatchewan $19.00 25.48 $20.50 26.10 $22.00 27.34 $19.50 25.48 $21.00 26.10 $22.50 27.34
Manitoba $18.50 25.17 $20.00 25.79 $21.50 26.72 $19.00 25.17 $20.50 25.79 $22.00 26.72
Ontario $19.50 26.10 $22.00 26.72 $24.00 27.34 $20.00 26.10 $22.50 26.72 $24.50 27.34
Quebec $18.50 24.86 $20.00 25.48 $21.50 26.41 $19.00 24.86 $20.50 25.48 $22.00 26.41
New Brunswick $15.25 21.13 $15.50 22.06 $16.25 23.92 $15.75 21.13 $16.25 22.06 $17.25 23.92
Nova Scotia $15.25 21.13 $15.50 22.06 $16.25 23.92 $15.75 21.13 $16.25 22.06 $17.25 23.92
P.E.I. $14.75 20.51 $15.00 21.59 $15.75 23.61 $15.25 20.51 $15.50 21.59 $16.50 23.61
Newfoundland $16.00 22.06 $16.50 22.68 $16.75 24.23 $16.00 22.06 $16.50 22.68 $16.75 24.23
Yukon $22.00 29.21 $23.00 30.14 $25.50 31.07 $22.50 29.83 $23.75 30.60 $26.25 31.69
N.W.T. $20.00 27.50 $22.00 28.35 $24.00 30.06 $20.50 27.50 $22.50 28.35 $24.50 30.06
U.S. DRIVER WAGES FOR FIVE-AXLE SEMI CONFIGURATION (mid 2007) in Canadian $/hr and
cents/km
BULK COMMODITY GENERAL COMMODITY

5-Axle 5-Axle 5-Axle 5-Axle
Vehicles Vehicles Vehicles Vehicles
per hr per km per hr per km
$ cents $ cents
U.S. North East (NY,NJ, Mass) $21.76 28.38 $23.38 30.05

U.S. Great Lakes (Ill,Mich) $21.76 28.38 $23.38 30.05
U.S. Midwest (Nebr,Kans,Okl) $20.21 27.38 $21.93 29.39
U.S. South (Ark, Alab, Geo) $19.08 26.88 $21.07 28.38
U.S. West. (Wash, Oreg, Calif) $20.21 28.38 $21.93 30.05
1.07478127 2007 U.S. to Can $ Exchange Rate
Costs for Driving Activity
Driving costs are influenced by distance, hours and tonnage associated with a
haul. Larger highway vehicles are costed on the basis of calculating driver
wages on either a per-kilometre rate, or an hourly rate -- whichever is highest.
This is standard procedure and results in most cases in line-haul pavement
kilometres being rated on a distance basis and urban and gravel kilometres paid
on an hourly basis, due to slower vehicle speed.
Urban straight truck operations are costed on an hourly pay basis.
19
Costs for Loading and Unloading Time
Cost for driver time resulting from loading and unloading of payloads is included
using the appropriate hourly rate.
Wage Burden Costs
In addition to paying base hourly and mileage wages for driving and loading /
unloading work performed, a wage burden percentage is applied to cover costs
associated with non worked paid time (e.g. Vacation and Statutory Holidays),
driver benefits such as pensions, medical premiums, etc. that are provided by the
employer. Burden percents used have been developed from analysis and
consultation with fleet operators.
Fuel Costs
Fuel costs are a result of the influence of distance travelled, vehicle fuel
consumption, and of course fuel prices. To support Operating Costs of Trucks
in Canada, Logistics Solution Builders maintains a database of realistic fuel
consumption rates for each case study hauling scenario. These are based on,
and updated with, consultation of fleet operators, discussions with distributors of
power units to the industry and review of published literature on fleet energy
management benchmarks and targets.
In relation to pricing, we reviewed average annual 2007 fleet discounted fuel

pricing in the most heavily populated areas of each region. Costs included
provincial and state tax as well as Canadian excise tax on fuels.
Price levels used in our study are on shown by Exhibit 2.4.
20
Exhibit 2.4: Fuel Costs
ESTIMATED TRUCKER FUEL COSTS BY PROVINCE (avg 2007)
Diesel
Est. Purchase Tank Wagon Provincial Fuel Tax Federal Fuel Tax
cents/litre cents/litre cents/litre cents/litre
(with fuel taxes) (without fuel taxes)
British Columbia 94. 9 71. 9 15. 0 4
Alberta 86. 3 73. 3 9. 0 4
Saskatchewan 89. 5 70. 5 15. 0 4
Manitoba 85. 6 70. 1 11. 5 4
Ontario 84. 1 65. 8 14. 3 4
Quebec 86. 1 65. 9 16. 2 4
New Brunswick 86. 0 65. 1 16. 9 4
Nova Scotia 88. 7 69. 3 15. 4 4
P.E.I. 89. 0 64. 7 20. 3 4
Newfoundland 91. 6 71. 1 16. 5 4
Yukon 97. 6 86. 4 7. 2 4
N.W.T. 106. 5 93. 4 9. 1 4
U.S. Cost Information based on U.S. DEPT OF ENERGY REPORTS

Diesel Purchase Equivalent
$ CDN/ U.S. GALLON CDN cents/litre
U.S. NorthEast (basis NY) 3.101 81.9
U.S. Great Lakes (Michigan) 3.085 81.5
U.S. Midwest (Nebraska) 3.085 81.5
U.S. Southern (Texas) 3.042 80.4
U.S. Western (Calif,Colo) 3.278 86.6
Note US costs have been expressed in equivalent Canadian dollars based on the
average exchange rate, previously discussed.
21
Repair Costs
Repair costs used in our study represent expected costs of parts, lubricants, oil,
and labour associated with the maintenance and repair of the particular
equipment type. Our database on repair costs was updated in consultation with
equipment dealerships, fleet managers, and reference to US Bureau of
Commerce and Statistics Canada Industrial Price Indices.
We have assumed that repairs were undertaken under efficient shop

management and that a prudent preventive maintenance system was employed
that was compatible with equipment manufacturer recommended service
intervals, warranties and other best practices.
Cleaning Costs
The cost of cleaning tractors, flatdeck trailers and van freight trailers has minimal
effect on total operating costs.
Annual costs of cleaning bulk tanks vary with the type of commodity carried and
the quantity of different bulk commodities transported during the year. An
average of tank trailer cleaning costs was developed from discussions with
various bulk tank truck carriers as well as a review of prices charged at
commercial tank cleaning facilities.
Transport Costs
The transport cost category is a miscellaneous category to reflect all those

factors that may be attributed to extra equipment that are not normally viewed as
part of a vehicle's standard configuration. This may represent special pumps,
hoses, safety equipment, dunnage, small tools, chains, tarping, heaters* or
refrigeration* equipment. These costs will vary with area of operation and also
with the specific type of product hauled.
*Note: Starred items are not included for this analysis, but such items would
normally be included in the category “transport costs”, when evaluating these
specialized trucking applications.
Tire Costs
Tire unit costs in our database were updated by Logistics Solution Builders
through consultation with suppliers of tires, our knowledge base from prior
related fleet studies, and reference to industrial price indices published by
22
Statistics Canada and the US Bureau of Commerce. Actual in-service costs for
trucking tires are a reflection of the following factors:
 Number of tires for the particular vehicle and cost of new tires purchased
in each region.
 Life of a tire in each service application, considering road surface
conditions.
 Cost of retreading, when retreading is desirable, and life of a retread tire
for each region.
Depreciation Costs
"Normal" depreciation is used based on the 2007 equipment purchase cost

obtained from dealer quotations. That is, one percent a month for trailers over a
trailer life of eight years and 79.2 percent for tractors over a tractor life of five
years. This assumption relates equipment write-off to current replacement cost
rather than an arbitrary "book value" determination. Equipment values used for
this study, inclusive of applicable provincial and state sales taxes, are tabulated
below.
Although this is not a detailed procurement study on the supply of highway

tractors to the industry, when compared to similar cost estimates used in the prior
2005 study, it would appear that the shift in Canadian currency versus U.S.
currency has moderated equipment purchase costs somewhat for truck
operators.
23
Exhibit 2.5 Purchase Cost of Power Units
Purchase Cost of Power Units (mid 2007)
Straight
Tractor For Tractor For Six Truck Two
Five Axle Axle (triaxle) Tractor For Axle Dry
Semi Semi Eight Axle Semi Freight
Combination Combination Combination Van
B.C. $112,815 $128,063 $129,935 $80,250
Alberta $105,500 $119,750 $121,500 $75,000
Saskatchewan $110,725 $125,688 $127,525 $78,750
Manitoba $112,815 $128,063 $129,935 $80,250
Ontario $113,860 $129,250 $131,140 $83,160
Quebec $113,338 $128,656 $130,538 $82,775
New Brunswick $105,500 $119,750 $121,500 $75,000
Nova Scotia $105,500 $119,750 $121,500 $75,000
P.E.I. $115,950 $131,625 $133,550 $82,500
Nfld $105,500 $119,750 $121,500 $75,000
Y.T. $105,500 $119,750 $121,500 $75,000
NWT $105,500 $119,750 $121,500 $75,000
U.S. North East $109,192 $113,382 $118,170 $74,050
U.S. Great Lakes $106,484 $110,569 $118,170 $74,050
U.S. Midwest $106,484 $107,606 $116,997 $74,050
U.S. South $103,775 $107,755 $112,304 $74,050
U.S. West $108,109 $112,256 $116,997 $74,050
Footnote: Add $10000 for Sleeper

All USA prices (for international corridor study purposes) in Cdn $ Equivalent
24
Exhibit 2.6 Purchase Costs for Trailer Units

Purchase Costs For Trailers (mid 2007)
Trailer For
Trailer For Five Axle
Trailer For Trailer For Five Axle Combination Trailer For
Five Axle Five Axle Combination Container Six Axle
Combination Combination Bulk Liquid Chassis Combination
Semi Van Flat Deck Tanker Trailer Triaxle Van
B.C. $27,820 $26,750 $70,620 $24,075 $34,240
Alberta $26,000 $25,000 $66,000 $22,500 $32,000
Saskatchewan $27,300 $26,250 $69,300 $23,625 $33,600
Manitoba $27,820 $26,750 $70,620 $24,075 $34,240
Ontario $28,080 $27,000 $71,280 $24,300 $34,560
Quebec $27,950 $26,875 $70,950 $24,188 $34,400
New Brunswick $26,000 $25,000 $66,000 $22,500 $32,000
Nova Scotia $26,000 $25,000 $66,000 $22,500 $32,000
P.E.I. $28,600 $27,500 $72,600 $24,750 $35,200
Nfld $26,000 $25,000 $66,000 $22,500 $32,000
Y.T. $26,000 $25,000 $66,000 $22,500 $32,000
NWT $26,000 $25,000 $66,000 $22,500 $32,000
U.S. North East $27,000 $26,000 $70,000 $22,000 $31,000
U.S. Great Lakes $27,000 $26,000 $70,000 $22,000 $31,000
U.S. Midwest $27,000 $26,000 $70,000 $22,000 $31,000
U.S. South $27,000 $26,000 $70,000 $22,000 $31,000
U.S. West $27,000 $26,000 $70,000 $22,000 $31,000
Trailer For Trailer For Trailer For

Six Axle Six Axle Trailer For Eight Axle B
Combination Combination Eight Axle B Train Bulk
Triaxle Flat Bulk Liquid Train Flat Liquid
Deck Tanker Deck Tanker
B.C. $31,000 $90,000 $43,000 $169,000
Alberta $29,000 $84,000 $40,000 $158,000
Saskatchewan $30,000 $88,000 $42,000 $166,000
Manitoba $31,000 $90,000 $43,000 $169,000
Ontario $31,000 $91,000 $43,000 $170,000
Quebec $31,000 $90,000 $43,000 $170,000
New Brunswick $29,000 $84,000 $40,000 $158,000
Nova Scotia $29,000 $84,000 $40,000 $158,000
P.E.I. $32,000 $92,000 $44,000 $174,000
Nfld $29,000 $84,000 $40,000 $158,000
Y.T. $29,000 $84,000 $40,000 $158,000
NWT $29,000 $84,000 $40,000 $158,000
U.S. North East $28,000 $82,000 $38,000 $165,000
U.S. Great Lakes $28,000 $82,000 $38,000 $165,000
U.S. Midwest $28,000 $82,000 $38,000 $165,000
U.S. South $28,000 $82,000 $38,000 $165,000
U.S. West $28,000 $82,000 $38,000 $165,000
GST has been excluded since fleet operators will claim offsetting GST credits.
25
License Costs
Canadian license costs reflect the provincial or territorial charges for licensing the
vehicle configurations studied as found in the Truck License & Tax Manual: A
Guide to Canadian Regulations, 2007 edition published by J.J. Keller and
Associates2.
US license costs for our international corridors are based on registration of a Five
Axle Tractor Semitrailer Combination to the accepted interstate highway standard
of 80,000 lbs (36,364 kg) gross vehicle weight. The registration costs are based
on selected state jurisdictions, within each region, and applicable charges were
secured from the Trucking Permit Guide, 2007 edition published by J.J. Keller
and Associates. It includes highway use tax and state taxes.
Two axle straight trucks were assumed licensed at 14,600 kg in all jurisdictions.
2
Note that provincial insurance programs, where provided do not include insurance costs as part
of vehicle registrations fees for trucks as they sometimes do for autos
26
Resulting annual license costs for our Canadian case studies were as follows:
Exhibit 2.7: Licencing Fees and Weights
VEHICLE LICENSING FEES AND WEIGHTS (2007)
($) Annual ($) Annual

GVW/GCW No. of Fee for Fee for
(kgs) Axles Power Unit Trailer
British Columbia 39,500 5 2229 30

46,500 6 2799 30
63,500 8 3905 60
14,600 2 607
Alberta 39,500 5 1809 20
46,500 6 2377 20
62,500 8 3314 40
14,600 2 463
Saskatchewan 39,500 5 2378 32
46,500 6 2495 32
62,500 8 4041 64
14,600 2 656
Manitoba 39,500 5 2236 $10 / 5 yrs
46,500 6 2780 $10 / 5 yrs
62,500 8 4048 $20 / 5 yrs
14,600 2 501
Ontario 45,000 5 1869 $35 / Life
54,000 6 2280 $35 / Life
63,500 8 2722 $70 / Life
14,600 2 549
Quebec 45,500 5 2162 42
55,500 6 2961 42
59,000 8 2961 84
14,600 2 696
New Brunswick 41,500 5 2141 16
49,500 6 2534 16
62,500 8 3129 32
14,600 2 757
Nova Scotia 40,500 5 2238 35
53,000 6 2675 35
58,500 8 3194 70
14,600 2 819
P.E.I. 40,600 5 1558 $65 / 5 yrs
49,700 6 1884 $65 / 5 yrs
62,500 8 2655 $130 / 5 yrs
14,600 2 564
Newfoundland 40,500 5 1898 25
49,500 6 2325 25
62,500 8 2940 50
14,600 2 692
Yukon Territory 43,800 5 1128 $1 / month
53,300 6 1428 $1 / month
63,500 8 1728 $2 / month
14,600 2 240
N.W.T. 39,500 5 1135 20
46,500 6 1338 20
63,500 8 1831 40
14,600 2 410
27
Indirect Costs: Administration, Interest, and Insurance
Administration and interest on working capital costs have been applied to the
hauling cases based on average industry levels for fleets and taking account of
normal interest charges applicable to trucking businesses in Canada and the US
during 2007. The applicable percentage amounted to 12.5% of revenue for
Canadian trucking businesses and 13% of revenue for US based trucking
businesses.
The Canada / US interest rate difference reflects information gained from the
Bank of Canada Internet site concerning Chartered Bank Prime Interest Rates
and US Prime Rates Charged by Banks during 2007 -- with borrowing rates
adjusted to reflect expected credit treatment of reasonably creditworthy trucking
enterprises having clean financial performance abstracts.
Interest costs for financing equipment purchase reflects an assumed borrowing

cost of 7% in Canada (9.25% in the US), loan payback period equivalent to
equipment life, and an assumed 75% of equipment purchase costs financed
(25% down payment required).
Insurance rates, as a percent of revenue, reflect recent risk and claims

performance of the trucking industry, historically a value between 3% and 3.5%
of revenue.
Operator Profit Margin
Early editions of Operating Costs of Trucks in Canada provided for operator profit
margin at the (then normal) level of 10 percent of revenue. Since Canadian
trucking industry entry deregulation in the 1980's, profit levels have eroded and it
is very common for well managed trucking enterprises to earn margins between
2.5% and 5% of business revenue. Specialized fleets can still earn higher levels
of margin (for example time sensitive express operations such as the land based
trucking divisions of international courier / freight forwarding businesses, but
these are arguably not strictly trucking "pure plays", and their financial returns are
certainly exceptional).
To aid in applying the case studies investigated to specific business

circumstances, Operating Costs of Trucks in Canada now calculates over-all
trucking costs using three alternative levels of margin: 10%, 5% and 2.5% of
revenue.
28
For readers who are uncertain of which margin to assume for a specific hauling
situation, a median approach is recommended -- basing evaluations using the
5% margin cases provided.
For each of the three alternate levels of profitability, the expected internal rate of
return on investment that the trucking fleet generates is computed, as follows.
Internal Rate of Return on Investment Calculation
The calculation used to estimate this internal rate of return is to evaluate the
equivalent interest earned from a cash flow series as follows:
Beginning of time period: A negative cash flow equal to monies spent for
equipment purchase
Each time period (year): A positive cash flow equal to margin earned
plus depreciation and interest on equipment
purchase
End of time period: A positive cash flow equal to monies realized

as salvage on equipment disposal.
The resulting calculation is a computation of the “cash flows” (since depreciation

accrual is a “non cash item” in any given year) associated with the investment
and is independent of borrowed money -- hence representing a measure of the
“internal rate of return” for investing money in the trucking asset.
A reader might be tempted to look at the calculated “rates of return” in this report
and feel that these rates are quite high. It must be remembered, however, that
the “rate of return” that is appropriate for an investment of capital also reflects the
“risk factor” in owning the asset. Trucking has been historically viewed as a
higher risk investment than owning shares in enterprises such as “utilities” or
“bonds” -- reflecting what is usually a very competitive market situation in the
trucking industry. As a result, the rates of return displayed by the model are
generally appropriate for investment in trucking as viewed by the financial
community.
It is also appropriate to consider the specialization or competitive factors that

apply to given trucking markets (availability of capital). Many non specialized
sectors (e.g. Flatdeck hauling, Agricultural trucking) may provide a lower rate of
return on investment than more specialized trucking equipment due to the low
degree of specialization of the investment in trailer equipment and competitive
factors associated with having many suppliers of these services. On the other
hand, very specialized trucking services that involve expensive (single purpose)
equipment (e.g. A trailer for compressed gases such as anhydrous ammonia or
29
N.G.L.’s) may dictate a higher rate of return to attract capital investment in the
enterprise.
2.3 Overview of Findings and Trends
Prior editions of Operating Costs of Trucks in Canada have portrayed historical

cost trend data across the sum of all vehicle configurations and regions
investigated. The case studies chosen by the client for the 2007 report are
significantly different from prior reports which necessitated a re-creation /
significant changes to the Excel spreadsheets with the result that previously
programmed trending / graphing evaluations are no longer supported due to:
 changed equipment configurations being investigated
 elimination of the US regional analyses
 replacement of the generic international corridors with specific "city pairs"
At the suggestion of the client, unit cost results from prior studies for some
sample vehicle configurations were "cut and paste" into a new spreadsheet, with
this year's results, to enable some trend comparisons of unit trucking costs to be
developed and displayed. Exhibit 2.8 illustrates these trends for 7 tractor-trailer
configurations where such unit cost comparisons are possible.
Exhibit 2.8: Unit Tractor-trailer Cost Comparisons Over Time

Average Unit Costs (Median Utilization, 5% Profit) By Year
230
Cents/KM
180
130
1999 2001 2003 2005 2007
Year
5 Axle Semi Unit (Van) 5 Axle Semi Unit (Flat Deck) 5 Axle Bulk Liquid Tanker
6 Axle (Triaxle) Semi Unit (Van) 6 Axle (Triaxle) Semi Unit (Flat Deck) 8 Axle Super B Train Unit (Flat Deck)
8 Axle Super B Bulk Liquid Tanker
30
When examining these cost trends since the last edition of Operating Costs of
Trucks in Canada, across the seven vehicle configurations, the 2005 through
2007 increase in unit trucking costs in Canada appears to be an increase of 7.6%
over the two years, or approximately 3.7% compounded annually. This rate is
significantly higher than the two year increase in Canada's consumer price index,
which rose a total of 4.2% over the same two years (or equivalent to 2.1%
compounded). The reason for unit trucking costs increasing significantly faster
than inflation in the general economy is no doubt related to escalation in fuel
prices in this timeframe as well as apparent upward adjustments to driver wages
(especially in the resource sectors / western Canada) in response to the
generally recognized shortage of drivers.
Appendix A provides a summary of base case analysis results while Appendix B

provides truck haul container chassis costs for specified domestic and
international corridors. Detailed case study costing component results are
submitted separately to the client in an Excel file.
2.4 Comments about Reliability of the Unit Costing Method
As noted previously, Operating Costs of Trucks in Canada is not a "statistical

survey", but rather the application of an activity based unit cost model using
information from expert opinion developed as an ongoing "database"
supplemented by consultations with industry, suppliers to the industry, etc.
The motor carrier sector is a very diverse segment of the economy. This is one
of the factors that has historically impeded the development of statistical models
and is especially one that impedes the use of "statistical averages" for accurately
estimating trucking costs in specific situations.
From the Central Limit Theorem, where σ (sigma) represents the statistical
variance, in situations where the variance (σ) is quite large, a precise estimation
of the mean value for an underlying process requires very large statistical
sampling to be undertaken.
In the face of these difficulties and with the relatively small published statistical
sampling of Canada's motor carrier industries, the cost modelling approach used
in the Operating Costs of Trucks in Canada methodology -- is essentially that of
applying an "expert system" for estimating total vehicle costs per kilometre.
Accurate Determination of Truck Costs: Rate Making
In considering the question of "accuracy" of our estimates, we look to the most

precise determination of fleet costs -- that which is undertaken by firms when
they are setting prices to bid for their services -- the rate making process.
31
As stated previously, the methodology laid out for this project is an enumerative
process that relates costs to unit component costs (e.g. wage rates per hour, fuel
prices per litre, repair costs per vehicle km operated, etc.) The unit costs,
estimated separately, are then "summed up" to derive a total cost which can be
expressed as a vehicle operating cost per kilometre…for a specific situation.
If we were a trucking company using a model similar to the one developed for
this project to forecast the operating costs for a particular haul that we were
bidding on -- we would require the accuracy of our cost forecast to be very
precise. Given the low profit margins of the industry, and the competitiveness of
the bidding process, one would expect that our over-all cost estimate -- for some
new business -- will need to be accurate ± less than one percent. If we
significantly over estimate the costs, our price will be too high and the business
will be awarded to another bidder. If we under estimate the costs, the business
will be awarded to us -- but will likely be unprofitable for us.
In this type of application of our methodology, of course, our firm would have the
luxury of exact knowledge (a 100% sample, statistically) of our immediate prior
unit cost structure. We would know current and immediate future wage levels of
our drivers; we would have an exact recent fuel cost structure, etc.
We would also have an exact specification for the haul in question -- providing
such information as trip distance, trip cycle time, specific road speeds, etc.
At the same time, our firm would generally need to be "in synch" with the best
practices of the industry as a whole -- otherwise our cost components might all
be "too high", and we would not be awarded business -- using our cost
estimates.
This being said, we know from experience that different truck operators pay
different amounts for fuel. Different truck operators have different wage
structures. Different truck operators have different purchase arrangements with
different suppliers.
Some of the foregoing factors favour larger fleets, who perhaps command larger
discounts from suppliers with whom they book larger amounts of business.
Other cost factors (such as wages paid to drivers, or administrative costs) can be
lower for smaller businesses. For these components, the variability (σ) is very
large (commonly, variations can be found that are ± 10 or 20 percent, when
looking at the individual components).
The evidence that both types of trucking business tend to have a similar "bottom
line cost structure" is provided by the marketplace. Frequently, larger firms as
well as a large number of smaller fleet businesses are found coexisting within the
32
same marketplace. That is to say, on similar routes, hauling similar products,

etc. -- we find both large and small fleet operators.
Less Accurate Estimating of Truck Costs: Benchmarking
Moving one step away from the more exacting needs associated with "rate
making", very often firms need to benchmark their practices against one another
-- or against what would be considered "best practices" for the sector as a whole.
For this type of determination, over-all costs can be estimated within somewhat
greater tolerances, perhaps ± 5 percent.
These kinds of cost determination can be useful for assessing questions such as:
 Should our company operate (or cease to operate) a private fleet?
 What transportation rates are we likely to be able to negotiate, if our
company put this hauling out for bid?
 What would be the trucking costs to use for assessing investment grade
feasibility of a new project (that trucking companies may be inclined not to
waste much time at bidding -- since the hauling is only a hypothetical
piece of business)?
For these types of exercises, the principal of Logistics Solution Builders Inc. has
applied the methodology used in this present study, for over twenty years.
Essentially, the model and the data sources used and described for each of the
cost components, is the same quality of information that we have provided with
this model.
The process provided is not a statistically based model, but it is an "expert

system" that uses reasonable average information -- determined from
discussions with industry experts, consultation with suppliers to the industry, etc.
These information are maintained in an ongoing live database of information that

is augmented periodically with new experience -- from actual hauling
applications, as they are evaluated and information gathered. As noted
elsewhere in the report, we consulted specific industry operators and suppliers,
to update our prior 2005 database for that edition of the Operating Costs of
Trucks in Canada report, a document that has been widely circulated -- used,
and scrutinized by industry, for many years.
Over-all, and this is not a statistically tested value, such as a mathematically

derived "confidence interval", but reflects in the author's experience with actual
hauling applications, the benchmarking estimates developed from the system
and provided in this report should easily answer the need for the client to
estimate total trucking costs on a cents per kilometre basis, for each of the
vehicle populations in the sample, to within
33
± 5 per cent.
The above figure, which is the author's conservative opinion of the reliability of
the estimates developed using this methodology, means that if our model
estimates unit costs of $1.66 per kilometre for a specific configuration of
vehicle….that it is safe to expect that unit operating costs over-all are likely to be
between ± 5 % of this value, or between ± 8 cents per kilometre.
Drilling Down to Individual Cost Components
Operating Costs of Trucks In Canada is a model built for the purpose of

answering the need to estimate vehicle costs per kilometre, over-all, for various
types of vehicles operated in Canada and on selected origin-destination city
corridors (including some international corridors). It is not represented as a tool
for doing detailed unit cost component analysis.
The component sub estimates (such as driver costs, or fuel costs, for example)
are interesting and useful by-products, of the over-all methodology…but should
probably be treated with an understanding that they may have a wider tolerance
for variation within them, than are the estimates derived using the over-all model.
As already described in context of "firm size", the author's experience is that

some unit costs tend to be lower for smaller firms (such as wages, and very
simplified administrative structures) … but these are often offset due to scale
economies in purchasing fuels, tires, consumables and equipment by the larger
firms. As a result of these types of factor -- when one disaggregates to a
specific cost component, larger variations between companies occur than when
looking at over-all costs totalled.
Because of the types of variations noted, and known by the author to be present
within the trucking industry, specific unit cost components derived from an expert
opinion sampling, versus an over-all industry survey, are likely to be accurate
only ± 15 to 20 per cent -- if compared to a specific hauling application. These
are the calibre of information used within our model's look-ups, because the over-
all sampling size is necessarily small -- when consulting such experts.
This is to say, for example, that if our model data "look up" quotes a unit
maintenance cost of 27.8 cents per kilometre for tires and repairs, that a specific
operator of similarly configured equipment may easily have a unit cost structure,
for that same grouped component, that is ± 6 cents per kilometre in comparison
to the lookup value noted.
Again, some of the component variation may be accounted for by different

purchasing and life cycle strategies. In the author's fleet consulting and costing
34
experience, we have encountered situations where operator A purchases a

"sturdier" component or vehicle and may have a lower maintenance cost than
operator B, but this is traded off with a higher capital cost. Also, some significant
differences in maintenance costs are known to occur between fleet operators
based on the driver skills, and management thereof -- that can vary between
fleets.
Of course, when we are considering the use of the model to estimate the
average maintenance costs across the entire trucking industry that uses those
types of vehicles -- one would expect, from the central limit theorem of statistics -
- that the mean average maintenance cost should lie within a closer tolerance
than the 6 cent value reported above. Essentially we are saying that if 2σ (the
95 percent confidence limit on the maintenance costs for an individual firm) is
roughly 6 cents per kilometre, then our "expert estimate" for the mean value of
the industry as a whole, will be much closer -- perhaps ±2 cents per km, if we are
only estimating the average value for the over all industry. (Though no one has
measured this hypothetical average value -- or we would have gladly used this
for our "look up" table).
Because no one has specifically done surveys for each of the cost items in
question, predicting the accuracy of each cost item in our model, as an estimate
of the mean value, cannot be stated mathematically using an exact statistical
confidence interval.
Estimated Error: Concluding Remarks
This being said, even if wider variations are present within individual model cost
sub-components, the over-all purpose for which this model is intended,
understanding the costs for motor carriage using various configurations of vehicle
in Canada's regions, and on specific corridors, should be well served using the
model results presented herein. For benchmarking purposes, that no doubt do
not require accuracy any higher than ±5 percent over all, our approach has been
mapped back to industry numbers with excellent results.
35
3.0 Effects of Fleet size
The unit cost sampling in the study for Operating Costs of Trucks in Canada
does not permit easy determination of how fleet size impacts operating costs.
Generally, the trucking firms being interviewed, and even the suppliers, are
hesitant to discuss practices that have commercial importance to them --
especially when realizing that the information will be published in government
study that is freely distributed.
Beyond this commercial reluctance, there is the question of "respondent burden"

in that we are -- for example -- now asking a supplier to disclose not only their
"average discounted price", but also how the discount may vary with firm size,
hence requiring them to search and disclose more information -- provided without
charge to the consultant -- in response to our information requests.
In the consultant’s experience, however, where large and small fleets have been
reviewed, it is very common to have both types of firm working in the same
hauling marketplace for the same transportation rate(s).
How is this possible?
Cost Advantages for Larger Firms
Very large fleets (with say 500 + vehicles) tend to enjoy the advantages that
come with high volume purchases of vehicles and all consumables such as fuels,
tires, spare parts, etc. In comparing the unit costs for such firms, where the
author has been able to see what unit prices are paid, it is common to see cost
savings in the order of 10%, when compared to the unit cost levels used in this
report.
The owner operator cost survey results, when unit costs for tractor operation only
(excluding all administration, profit and driver costs) are compared to our fleet
cost estimates, bears this out with the Opcosts model showing cost savings for
fleets compared to owner operators when only looking at these line items. (see
Section 5)
Cost Advantages for Smaller Firms
Smaller family firms (with less than 5 or 10 vehicles) tend to enjoy cost
advantages that stem from paying lower wages and benefits (often 10 to 15%
36
lower than the wage levels used in this report) than larger firms3 that attract union
interest (even if the larger firms are not unionized, they will pay higher wages in
order to stay "not unionized"). Note again that our owner operator survey
reported lower driver wage costs than company trucks (again see Section 5).
Smaller firms will tend to spend up to 30% less for "administration" -- largely
because the span of control is smaller -- the owner / principal can more readily
manage and control the business by "daily walking around", and "visiting with all
staff including the drivers", etc. For larger businesses, auditing and financial
control packages are required as well as sophisticated communications systems
and networks to co-ordinate the work of geographically dispersed branch
operations.
Generally, the relative advantages for each firm size tend to cancel each other
out, in our experience. The author was formerly the manager of a consulting
business unit owned by a large fleet business -- giving a unique opportunity to
view actual financial information of that business, on a confidential basis. At the
same time, the consulting practice was often involved with smaller trucking
businesses, and owner operators -- sometimes with unit cost information
collected under subpoena, if the firm was involved in litigation (e.g. a loss of
income determination for the business). This unique access to actual information
for both size of firm reinforces the opinion expressed above.
3
Canada’s Driving Force published by the Canadian Trucking Human Resources Council shows
larger firms are more likely to pay fringe benefits such as insurance policies, paid time for training,
medical/dental and pension plan contributions.
37
4.0 Private vs. for-hire fleets
The trucking industry consists of two main sectors: the for-hire sector which has
historically been defined as consisting of those companies that haul freight
owned by others, for compensation, and the private sector consisting of those
companies who primarily haul their own freight, but may, from time to time, haul
other people’s goods for compensation.
In dollar terms, the two sectors are nearly the same size. However, there are
some major differences in their make-up as well as some interesting similarities.
Private trucking is dominated by a large number of small fleets operating in and
around urban areas, where it holds an 85% market share. The majority of fleets
operating in this area consist of 1 or 2 vehicles and are typically straight trucks.
As haul distance increases, this market share drops. Its market share is about
50% at trip distances of 200 km; decreasing to 10% at distances of 2000 km and
greater. Truck size increases as trip distances increase to take advantage of the
economics of the larger vehicles over these haul distances4.
Companies transport their own products for a number of reasons. Some

companies move products such as industrial gases that require specialized
handling techniques that the company wishes to keep tight control over for safety
and liability reasons. Other companies wish to maintain control over the fleets to
ensure vehicles are available when as required.
With deregulation, the differences between private and for-hire trucking have
become less defined over the past several years. For example, private fleets can
haul products for compensation allowing them to find backhaul where they
previously did not have any. Private fleets are now more likely to contract out
some specific freight movements where the for-hire sector can do the movement
more efficiently due to better load balancing opportunities (personal
communication with the Private Motor Truck Council of Canada). Many private
fleets have to continually prove they are cost-competitive with for-hire trucking.
For example, the annual Private Motor Truck Council of Canada top issues
survey indicates this to be a rapidly increasing top issue with private fleets.
The three cost main cost variables that could result in a cost differential between
private and for-hire fleets are vehicle utilization (annual kilometres driven), driver
wages and fuel. Each of these was examined as follows.
Information available from the NRCan 2000 Fuel Economy Benchmarking Survey
indicates that the utilization of both private and for-hire fleets varies considerably
depending upon the application. However, similar vehicles operated in similar
circumstances have similar fuel consumption rates.
4
Profile of Private Trucking. Private Motor Truck Council of Canada. January 1998.
38
One example noted was fuel haulers who tend to use their vehicles with two
shifts a day, sometimes seven days a week resulting in annual utilization rates
around 250,000 km whether private or for-hire. Single driver intercity van fleet
utilization rates typically vary between 95,000 and 180,000 km whether private or
for-hire. Vehicles used for single shift weekday delivery locally or regionally
typically have a utilization rate in the range of 40,000 to 80,000 km a year
whether private or for-hire. These data indicate there are not any systematic
differences in utilization rates between private and for-hire fleets. Rather,
differences are application specific.
Confidential data available to the consultants also indicates that wage rates paid
are similar for both sectors for similar operations, although there is a widely held
perception that private fleets pay higher wage rates. Similarly, these confidential
data indicated fuel consumption rates are similar.
Overall, it is the consultant’s assessment that there are not any systematic
differences in costs between private and for-hire fleets when operating under the
same conditions.
39
5.0 Owner-Operator Cost Survey
With assistance of the Owner Operators Business Association of Canada

(OBAC), an owner operator cost and operations survey was conducted. OBAC
mailed questionnaires to 300 of their members and received the responses to
protect confidentiality and conform to privacy laws. Respondents were provided
a questionnaire to compete and 54 useable responses were received. These
were reviewed and tabulated by Logistics Solution Builders and took the form of
an "Owner Operator Cost Model".
The costing model that emerged for owner operator tractor businesses in
Canada in 2007 is shown by exhibit 5.1.
Exhibit 5.1: Owner-operator Costs
Region: All Responses Together
No of responses: 54
Summary Costs For Owner Operator Trucking
Annual Distance: 121,487 miles 195,510 kms
Worked Hours: 3,372
Total $/mile cents/km $/hour

Driver Costs $39,495 $0.325 20.2 $11.71
Road Expenses $9,314 $0.077 4.8 $2.76
Fuel Costs $60,287 $0.496 30.8 $17.88
Mtce & Repair Costs $18,379 $0.151 9.4 $5.45
Tire Costs $3,630 $0.030 1.9 $1.08
License Costs $3,913 $0.032 2.0 $1.16
Insurance Costs $8,385 $0.069 4.3 $2.49
Depreciation $19,625 $0.162 10.0 $5.82
Interest $4,369 $0.036 2.2 $1.30
Total Tractor (on road) $167,397 $1.378 85.6 $49.64
Communications $3,967 $0.033 2.0 $1.18

Business Overhead $7,034 $0.058 3.6 $2.09
Total Costs $178,398 $1.468 91.2 $52.91
40
In one of the survey questions, operators were asked to estimate the percentage
of miles operated in each provincial jurisdiction or the USA and this question was
used by the consultant to develop some "regional cost estimates" based on
owner operators that reported a significant proportion of their mileage operated
within any specific jurisdiction.
For provinces of Saskatchewan, Manitoba, individual Atlantic Canada provinces

as well as the Yukon, Northwest Territories and Nunavut, operated mileage
reported was insignificant. Alberta and British Columbia each had 2 operators
with significant mileage, with most of the surveyed firms reporting mileage in
Ontario, Quebec and the U.S.A.
Detailed summaries of these unit cost evaluations are provided in Appendix C.
An interesting situation does emerge when we compare owner operator reported

costs from our survey to the modelled costs for tractor operation (including no
administrative costs) in our Operating Costs of Trucks in Canada model.
Exhibit 5.2 shows two comparisons:
 The first comparison emerges based on what was reported for tractor
costs in the owner operator survey when "wages" and "road costs" (both
components of driver costs) are included and compared to "total tractor
costs" from the Operating Costs of Trucks in Canada. Generally, the
"tractor costs" estimated using our model come out significantly higher
than reported in the owner operator survey. This is explainable when we
note that driver costs reported in the owner operator survey tended to
only be 17 to 27 cents per kilometre.
 The second comparison emerges when we "back out" what was reported
for driver costs in the owner operator survey and the driver component
from "Operating Costs of Trucks in Canada". In this instance, there is
better agreement between the two estimates of tractor operating cost (a
2.9 cent per kilometre difference between 62.4 and 65.3 cents per km) for
a lower cost of 4.6% for fleet operators.
41
Exhibit 5.2: Comparison of Owner-operator and Fleet Vehicle Costs

Comparison of Owner Operator Survey (Tractor Costs) to Operating Costs of Trucks In Canada
Since Average RGVW of Owner Operators Reporting Was 41,500 kg, Comparison is to Average of
Tandem Semi and Tridem Semi Tractor Costs in Operating Costs of Trucks Model
Jurisdiction: BC ALTA ONT QUE ATL Canada

No of Responses Averaged: 2 2 20 4 6 34
Total Tractor Cost Reported (cents/km) 103.6 111.1 86.3 88.0 85.9 88.9
Average of Opcosts (Tandem/Tridem ) Van Semi 133.0 119.4 123.1 119.3 106.1 120.0
Ratio (Opcosts Model to Owner Op Survey) 128.4% 107.5% 142.6% 135.5% 123.5% 135.0%
Tractor Cost Excl. Driver Costs (cents/km) 86.1 93.4 61.2 69.8 59.7 65.3
Average of Opcosts (Tandem/Tridem) Van Semi 71.3 62.3 61.5 62.9 62.4 62.4
Ratio (Opcosts Model to Owner Op Survey) 82.8% 66.7% 100.5% 90.0% 104.5% 95.6%
Also note that the estimated “company truck cost” from the Operating Costs of Trucks
method is slightly less for these cost components….doubtless reflecting slightly lower
costs for the larger fleet to purchase equipment, fuel, tires and maintenance than a
single-truck owner operator pays for these same items. (See discussion, earlier Section
3).
Again, caution must be exercised in these comparisons since differences between the
two reported cost estimates may be due to Sample sizes from the owner operators
reporting in some jurisdictions, especially B.C., Alberta, Quebec and Atlantic Canada
and estimating errors in reporting costs by owner operators sampled in the survey.
42
6.0 Rail
6.1 Rail Rates
CN and CP were approached for rate quotes and provided the rates set out
below for the routes they operate. All of the rates provided were for ramp-to-
ramp service (loading onto a rail car, rail line haul and unloading from a rail car).
In addition, both carriers publish terminal charges for a range of services such as
storage beyond the normal free time allowed, and electrical hook-ups for
containers with cooling or heating units which may apply depending upon the
circumstances relating to the movement or non-movement of containers.
It should be noted that CP no longer offers conventional trailer-on-flatcar service

but does handle trailers on its Expressway service between Montreal and
Toronto.
As expected, we were advised that confidential rates are somewhat lower than
the non-confidential rates but the railways did not provide any indication of how
much lower. With intermodal generally considered to be a high-volume but low
mark-up activity, it is possible that the reductions contained in confidential
contracts are smaller than for some carload products but other (potentially
mutually beneficial) arrangements may be included in the total confidential
pricing package. For example, the need to return empty marine containers to a
port can be alleviated if a domestic cargo can be obtained in the return direction.
To accomplish this, the railway needs the concurrence of the owning steamship
line and compliance with CBSA rules. There is also a benefit for the steamship
line since the container would be returned by the railway without charge to the
steamship line. Such a movement benefits both the railway and the steamship
company.
Any reductions in confidential rates are probably predicated either on

competition from another railway, another gateway, or by the level of truck
competition faced in the particular corridor. Short haul movements such as
Montreal-Toronto would of necessity be truck competitive while rail would have a
price advantage for longer hauls. If just-in-time service is a factor the advantage
would swing back towards truck even if the cost of using truck is higher than for
rail.
Exhibits 6.1 and 6.2 show the rates obtained from each railway for the routes
noted.
43
Exhibit 6.1: Intermodal Rates for Selected Corridors CN Rail
CANADIAN NATIONAL INTERMODAL (FAK) RATES
(RAMP TO RAMP SERVICE ONLY)
OPEN 48’- Dist.

MARKET FROM TO TARIFF PLAN EQUIP. 53' (mi.) $Exch.
DOMESTIC CALGARY VANCOUVER 7290 25 CNRU $1,185 995 CAD
DOMESTIC MONCTON MONTREAL 7290 25 CNRU 557 655 CAD
DOMESTIC MONTREAL MONCTON 7290 25 CNRU 985 655 CAD
DOMESTIC MONTREAL TORONTO 7290 25 CNRU 583 340 CAD
DOMESTIC TORONTO WINNIPEG 7290 25 CNRU 1,814 1,240 CAD
DOMESTIC VANCOUVER TORONTO 7290 25 CNRU 2,310 2,767 CAD
48' – Dist.
MARKET FROM TO TARIFF PLAN EQUIP. 53' (mi.) $Exch.
TRANSBORDER TORONTO CHICAGO 8383 25 CNRU $451 513 USD
TRANSBORDER TORONTO DETROIT 8383 25 CNRU 599 245 USD
TRANSBORDER TORONTO MEMPHIS 8383 25 CNRU 875 990 USD
Dist.
MARKET FROM TO TARIFF PLAN EQUIP. 20' 40' (mi.) $Exch.
OSM CALGARY VANCOUVER 7589 85 IMPEX 764 $871 990 CAD
OSM HALIFAX CHICAGO 7589 85 IMPEX 908 1,009 1,672 USD
OSM HALIFAX TORONTO 7589 85 IMPEX 971 1,100 1,186 CAD
OSM MONTREAL TORONTO 7589 85 IMPEX 626 717 350 CAD
OSM VANCOUVER TORONTO 7589 85 IMPEX 1,932 2,169 2,767 CAD
Notes on CN Tables
FAK indicates Freight All Kinds - general freight not commodity specific
OSM indicates overseas markets – the import or export of goods. All movements in steamship company
owned ISO containers (20 foot or 40 foot).
All domestic and transborder rates for movement in railway owned containers.
Terminal service charge included in OSM traffic rates where applicable.
CN rates are exclusive of fuel surcharge in Tariff 7401. Surcharge rate of 15.30% in December 2007 and
17.37% in January 2008 applied in $1 increments..
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for
storage and storage at terminals may be subject to additional charges depending on circumstances and
agreement with shipper.
Rates quoted above are for the movement of loaded containers and may vary by direction.
Rates do not include pick up and delivery (dray or highway service)
Distances are approximate.
44
Exhibit 6.2: Intermodal Rates for Selected Corridors CP Rail
CANADIAN PACIFIC INTERMODAL (FAK) RATES
(RAMP TO RAMP SERVICE ONLY)

OPEN Dist.
MARKET FROM TO TARIFF (mi.) EQUIPMENT 53' $Exch.
DOMESTIC CALGARY VANCOUVER 629 CP $1,023 CAD
DOMESTIC MONTREAL TORONTO 345 Shipper/trucker 380 CAD
CP
DOMESTIC TORONTO WINNIPEG 1,211 1,719 CAD
CP
DOMESTIC VANCOUVER TORONTO 2,534 2,211 CAD
Dist.
MARKET FROM TO TARIFF (mi.) EQUIPMENT 53' $Exch.
TRANSBORDER TORONTO CHICAGO 530 EMP5 $433 USD
Dist.
MARKET FROM TO TARIFF (mi.) EQUIPMENT 20' 40' $Exch.
OSM CALGARY VANCOUVER CPRS 7589 648 IMPEX $645 $716 CAD
CAD
OSM MONTREAL TORONTO CPRS 7589 355 IMPEX 544 705
CAD
OSM VANCOUVER TORONTO CPRS 7589 2,554 IMPEX 1842 2,110
Notes on CP Tables
FAK indicates Freight All Kinds - general freight not commodity specific
CP informed us that it does not provide intermodal service between Toronto and Detroit.
OSM indicates overseas markets the import or export of goods in third-party owned ocean containers (20 foot or 40
foot).
OSM rates are exclusive of a terminal service charge at the inland point.
All domestic rates were quoted in railway owned containers. CP quoted transborder rates in EPM equipment for
which there is a daily charge of about $17 (presumably $US) not included in the rates.
CP’s Montreal – Toronto domestic rates are for CP Expressway trailer service hauling customer supplied trailers
and are NOT published.
CP rates quoted above are exclusive of fuel surcharge which CP quoted at 27.2% in December 2007 (Tariff CPRS
9000). The January fuel surcharge is 30.8%.
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and
storage at terminals may be subject to additional charges depending on circumstances and agreement with shipper.
Rates do not include pick up and delivery (dray or highway service).
Distances are approximate.
5
EMP refers to “Equipment Management Program”, a program for the interline movement of
containers specifically allocated to the program. Participating railways include the Norfolk
Southern, Union Pacific, Kansas City Southern and Canadian Pacific. There is a daily customer
charge of about US$17 for the use of an EMP container.
45
6.2 Rail–Truck comparisons
Truck rates for select corridors were developed for comparison with rail rates.
Results are shown in Exhibit 6.3. Truck costs were found to be lower on shorter
trips, with rail rates being lower than truck on long haul trips. The breakeven point
on costs was determined to be in the range of 1,000 to 2,000 kilometres.
However, trucking offers a higher level of service in terms of shorter delivery
schedules and higher trip frequencies which are often attractive to shippers even
though rail rates may be less than truck.
Exhibit 6.3: Comparison of Truck Costs and CN Rail Rates Selected

Corridors
Canadian National Intermodal Movements $CDN TOTAL Rail charges Compensatory
Including Fuel Truck
Surcharge of 15.3% Costs
MARKET FROM TO 48'-53'
DOMESTIC CALGARY VANCOUVER $1,885 $1,400
DOMESTIC MONCTON MONTREAL 1,103 1,252
DOMESTIC MONTREAL MONCTON 1,597 1,252
DOMESTIC MONTREAL TORONTO 1,220 755
DOMESTIC TORONTO WINNIPEG 2,582 2,889
DOMESTIC VANCOUVER TORONTO 3,211 5,967
MARKET FROM TO 48'-53'
TRANSBORDER TORONTO CHICAGO $1,157 $1,152
TRANSBORDER TORONTO DETROIT 1,309 562
TRANSBORDER TORONTO MEMPHIS 1,563 2,121
MARKET FROM TO 20' 40'
OSM CALGARY VANCOUVER $1,140 $1,264 $1,400
OSM HALIFAX CHICAGO 1,435 1,560 3,219
OSM HALIFAX TORONTO 1,408 1,557 2,227
OSM MONTREAL TORONTO 1,010 1,115 755
OSM VANCOUVER TORONTO 2,516 2,789 5,967
Notes on table:
Compensatory Truck Costs includes costs plus profit allowance
OSM indicates overseas markets - the import or export of goods. All movements in steamship company owned ISO
containers (20 foot or 40 foot).
All domestic and transborder rates for movement in railway owned containers.
Terminal service charge included in OSM traffic rates where applicable.
All rail movements to the US are published by CN in $US and have been converted to $CDN using Bank of Canada
average exchange rate for 2007.
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and storage at
terminals may be subject to additional charges depending on circumstances and agreement with shipper.
No pickup or delivery charges included in calculations at Canadian ports since all have rail facilities on-dock.
Additional port charges may apply such as loading/unloading containers to/from rail flat cars and for Port of Montreal Rail
service.
Pick up(delivery) charges are based on movement of container on CN owned chassis within defined metropolitan delivery
area to or from a CN Intermodal facility
Pick up (or delivery) includes return movement of container to rail terminal
Exclusive of GST, where applicable. Assumed that drayage
costs are the same for 40 foot and 53 foot container
46
Exhibit 6.4: Comparison of Truck Costs and CP Rail Rates Selected Corridors
Canadian Pacific Intermodal Movements $CDN Compensatory

Total Charges Including Truck
Fuel Surcharge of 27.2% Costs
MARKET FROM TO 53'
DOMESTIC CALGARY VANCOUVER $1874 $1400
DOMESTIC MONTREAL TORONTO 1088 755
DOMESTIC TORONTO WINNIPEG 2727 2889
DOMESTIC VANCOUVER TORONTO 3417 5967
MARKET FROM TO 53'
TRANSBORDER TORONTO CHICAGO $1252 $1152
MARKET FROM TO 20' 40'
OSM CALGARY VANCOUVER $1234 $1356 $1400
OSM MONTREAL TORONTO 1137 1374 755
OSM VANCOUVER TORONTO 2788 3161 5967
Notes on table:
Compensatory Truck Costs includes costs plus profit allowance
CP informed us that it does not provide intermodal service between Toronto and Detroit.
OSM indicates overseas markets the import or export of goods in third-party owned ocean containers (20 foot or 40 foot).
OSM rates include terminal service charge.
All rail movements to the US are published by CP in $US and have been converted to $CDN using Bank of Canada
average exchange rate for 2007.
No pickup or delivery charges included in calculations at Canadian ports since all have rail facilities on-dock.
All domestic rates were quoted in railway owned containers. CP quoted transborder rates in EPM equipment for which
there is a daily charge of about $17 (presumably $US) not included in the calculations.
EPM equipment is presumably for furtherance by a US-based railway via rubber transfer at Chicago.
CP’s Montreal – Toronto domestic rate is for CP Expressway trailer service hauling customer supplied trailers and is NOT
published.
Pick up (or delivery) includes return movement of container to rail terminal
Rates include lifting (to and from chassis) at origin and destination terminals. Lifting, movement for storage and storage at
terminals may be subject to additional charges depending on circumstances and agreement with shipper.
Exclusive of GST, where applicable
Assumed that drayage costs are the same for 40 foot and 53 foot container and for each type of traffic
Truck costs from L Ash spreadsheet
As a cross-check on the rail rates, CP published rate (tariff CPRS 7589 Item 1260) for
grain grown in the Western Division”; (i.e. statutory grain) from Calgary-Vancouver was
determined to be $597 for a 20 foot container and $699 for a 40 foot container. This
compares with the quoted rates of $645 and $716 respectively for commercial traffic.
Rail rates for 20 foot containers usually require the rail transport of 2-20 foot
containers together to obtain the published rate. Since the tables above use
mostly utilize public rates, effective rates can be expected to be lower with rates
on CN and CP being approximately equal on competitive corridors.
Total rail charges for both CN and CP include drayage charges for pick up and
delivery of container at both ends of move (except at port) while “truck costs” only
47
include either pick up or delivery at each end. Drayage charges utilized in the rail
analysis are based on published rates in CN tariff.
48
7.0 Marine Movements
Marine intermodal movements on both the east and west coasts were examined
and rates obtained where possible. As no intermodal movement exists for the
Great Lakes we estimated the potential ferry charges based on avoidable over-
the-road costs.
7.1 Halifax-Boston
A bi-weekly Halifax-Boston feeder service using containership Simone J

commenced on July 2, 2007 but the service was terminated early in 2008. The
service was set up to transport overseas marine containers between the Ports of
Halifax and Boston. While the service was operating, we were told that the port-
to-port rate on an all-in basis (including stevedoring) was $750US for a 40 foot
container and $700US for a 20 foot container. We were also told that it was
unlikely that a fuel surcharge was applied to the rates. While the service was not
predicated on the transport of domestic North American traffic, it could have been
used for such if demand arose.6 Accordingly, we have prepared the following
comparison assuming the transport of goods from within the City of Halifax to
within the City of Boston. Further, we have assumed local delivery charges of
$200 at each end in the respective national currency which is in line with
published railway pick-up and delivery charges. US dollars have been converted
to Canadian dollars at the Bank of Canada’s 2007 average exchange rate.
Exhibit 7.1 Comparison of Marine Rates and Truck Costs Halifax-Boston
Marine Truck
40 ft 20ft
Halifax Pickup $200 $200
Marine Rate $806 $752
Boston Delivery $215 $215
Total $1,221 $1,167 $1,420
The comparisons above do not include any additional port related charges that
may apply. They also use marine containers for the marine leg but highway
transport would probably be in a 53 foot dry van. While the comparisons appear
to be favourable to marine, it should be noted that most movements from Nova
Scotia to Massachusetts are probably originated elsewhere than Halifax and
destined for other than Boston. If the origin and destination are shifted outside
6
The handling of 53 foot domestic containers on a cellular liner might have proven to be a
challenge.
49
the metro areas (e.g. originating at one of the three Michelin plants at
Bridgewater, Waterville and Pictou County), the cost comparison would probably
shift to favour truck transport. There is also the jit factor that is prevalent in the
shipment of manufactured and processed goods that favours truck.
7.2 Montreal-St John’s
The Oceanex fleet of vessels can handle both containers stacked and ro-ro
trailers (loaded with containers). We were quoted a rate of CDN$3,500 port to
port all-in including loading and unloading for a 40 foot or 53 foot container. The
rate was said to be based on truck competition – avoidable over-the-road costs.
No mention was made of a fuel surcharge. The return rate from St John’s
appears to be lower – Oceanex quoted a return rate plus fuel surcharge of
approximately CDN $2,100 for on-dock St John’s to door in Montreal.
Ferry charges North Sydney to Port aux Basques are currently:
 $CDN205.50 for a vehicle over 30ft to 40 ft

 $CDN270.50 for a vehicle over 40 ft to 50ft
 $CDN325.00 for a vehicle over 50 ft to 60 ft
 $CDN385.25 for a vehicle over 60 ft to 70 ft
The ferry movement could involve the marine transport of a container on a trailer
(drop trailer operation for which an additional $CDN 99.25 jockey charge applies)
or a tractor trailer combination (for which the tractor driver would be charged
$CDN78.50 for the crossing). For the purpose of this analysis a highway move
using a 53 foot dry van with cab has been assumed with a total vehicle length of
60-70 feet. The marine move from Montreal to St John’s via Oceanex has been
assumed to be a drop trailer 53 foot dry van with local drayage provided in the
rate to St John’s. Accordingly, the direct truck cost would be $3,379 for the
highway service plus ferry charges of $463 for a total of $3,842. We were told
that regular dry van service makes considerable use of the marine option with
refrigerated goods moving predominantly over-the-road.
Exhibit 7.2: Comparison of Marine Rate and Truck Costs Montreal –St
Johns.
Marine Truck
Compensatory truck costs $3,379
Marine Atlantic Charges $464
Total $3,500 $3,843
50
7.3 Sept-Iles – Trois Rivières
While there are some bulk movements along the St Lawrence River, there are
not any marine containerized movements for which comparable trucking costs
could be developed.
7.4 West Coast Movements
While marine interests indicated there has been interest in developing West
Coast short-sea container movements competitive with rail or truck, to date none
have been developed.
7.5 Cross Lake Ferry Operation Oswego-Toronto
While there have been proposals for a cross lake service one does not currently exist.
However, estimated potential ferry charges based on avoidable over-the-road costs7
were calculated. Details are provided in Appendix D. We note that this analysis is
provided only as an example as actual charges could vary considerable because of
prevailing market conditions.
7
Compensatory rates plus allowance for typical industry profit margin
51
APPENDIX A
SUMMARY OF BASE CASE TRUCK COST ANALYSIS RESULTS
52
British Columbia Alberta

10% Profit 2.5% Profit
10% Profit 5% Profit 2.5% Profit Margin 5% Profit Margin
Margin Total Margin Total Margin Total Total Costs Margin Total Total Costs
Configuration Costs (c/km) Costs (c/km) Costs (c/km) (c/km) Costs (c/km) (c/km)
5 Axle Semi Unit (Van)
80,000 km 213.2 201.9 196.8 191.6 181.6 176.9
160,000 km 190.2 180.2 175.6 170.4 161.4 157.3
240,000 km 182.5 172.9 168.5 163.3 154.7 150.8
5 Axle Semi Unit (Flat Deck)
80,000 km 221.3 209.7 204.3 200.1 189.5 184.7
160,000 km 198.5 188.0 183.2 179.0 169.5 165.2
240,000 km 190.9 180.8 176.2 171.9 162.9 158.7
5 Axle Bulk Liquid Tanker
80,000 km 216.1 204.8 199.5 195.6 185.3 180.5
160,000 km 187.7 177.8 173.3 169.3 160.4 156.2
240,000 km 178.3 168.9 164.5 160.5 152.0 148.1
5 Axle Container Chassis
80,000 km 196.7 186.4 181.6 177.8 168.5 164.1
160,000 km 174.2 165.0 160.8 157.0 148.8 144.9
240,000 km 166.7 157.9 153.9 150.1 142.2 138.5
6 Axle (Triaxle) Semi Unit (Van)
80,000 km 252.9 239.5 233.4 228.8 216.8 211.2
160,000 km 226.2 214.3 208.8 204.2 193.4 188.5
240,000 km 217.4 205.9 200.6 195.9 185.6 180.9
6 Axle (Triaxle) Semi Unit (Flat
Deck)
80,000 km 253.3 240.0 233.8 229.1 217.0 211.5
160,000 km 227.1 215.1 209.6 204.8 194.0 189.0
240,000 km 218.4 206.9 201.6 196.7 186.3 181.6
53

80,000 km 240.9 228.2 222.4 218.2 206.7 201.4
160,000 km 207.1 196.2 191.2 186.9 177.0 172.5
240,000 km 195.9 185.6 180.8 176.4 167.1 162.9
8 Axle Super B Train Unit (Flat
Deck)
80,000 km 294.8 279.3 272.1 270.0 255.8 249.2
160,000 km 265.8 251.8 245.4 243.2 230.4 224.5
240,000 km 256.2 242.7 236.5 234.3 221.9 216.2
8 Axle Super B Bulk Liquid
Tanker
80,000 km 284.5 269.6 262.6 260.2 246.5 240.2
160,000 km 239.5 226.9 221.1 218.4 206.9 201.6
240,000 km 224.5 212.7 207.3 204.5 193.7 188.8
54
Saskatchewan Manitoba
80,000 km 189.7 179.7 175.1 186.2 176.4 171.9
160,000 km 167.0 158.2 154.1 163.3 154.7 150.7
240,000 km 159.4 151.0 147.1 155.6 147.4 143.7
80,000 km 193.9 183.7 179.0 193.1 182.9 178.2
160,000 km 171.4 162.4 158.2 170.2 161.3 157.1
240,000 km 163.9 155.2 151.2 162.6 154.1 150.1
80,000 km 190.2 180.2 175.6 189.8 179.8 175.2
160,000 km 162.2 153.7 149.7 161.4 152.9 149.0
240,000 km 152.9 144.8 141.1 151.9 143.9 140.2
80,000 km 172.9 163.8 159.6 171.9 162.9 158.7
160,000 km 150.7 142.7 139.1 149.5 141.6 138.0
240,000 km 143.2 135.7 132.2 142.0 134.5 131.1
80,000 km 220.9 209.2 203.9 220.5 208.9 203.6
160,000 km 194.9 184.7 179.9 193.9 183.7 179.0
240,000 km 186.3 176.5 172.0 185.1 175.3 170.8
Deck)
80,000 km 220.8 209.2 203.8 220.5 208.9 203.5
160,000 km 195.3 185.0 180.3 194.3 184.1 179.3
240,000 km 186.8 177.0 172.4 185.6 175.8 171.3
55

80,000 km 212.2 201.1 195.9 212.2 201.1 195.9
160,000 km 179.3 169.9 165.5 178.5 169.1 164.8
240,000 km 168.4 159.5 155.4 167.3 158.5 154.4
Deck)
80,000 km 257.9 244.4 238.1 256.7 243.2 236.9
160,000 km 229.3 217.3 211.7 227.6 215.7 210.1
240,000 km 219.8 208.2 202.9 218.0 206.5 201.2
Tanker
80,000 km 253.5 240.1 234.0 252.8 239.4 233.3
160,000 km 209.1 198.1 193.0 207.7 196.7 191.7
240,000 km 194.3 184.1 179.4 192.6 182.5 177.8
56
Ontario Quebec
80,000 km 194.4 184.1 179.4 188.6 178.6 174.1
160,000 km 171.5 162.5 158.3 165.5 156.8 152.8
240,000 km 163.9 155.3 151.3 157.9 149.6 145.7
80,000 km 206.7 195.8 190.8 203.8 193.1 188.2
160,000 km 184.0 174.3 169.8 181.0 171.4 167.0
240,000 km 176.4 167.1 162.8 173.3 164.2 160.0
80,000 km 197.4 187.1 182.3 196.0 185.7 180.9
160,000 km 169.1 160.2 156.1 167.5 158.7 154.6
240,000 km 159.7 151.3 147.4 158.0 149.7 145.9
80,000 km 177.3 167.9 163.6 175.8 166.6 162.3
160,000 km 154.9 146.8 143.0 153.3 145.2 141.5
240,000 km 147.5 139.7 136.1 145.8 138.1 134.6
80,000 km 239.7 227.1 221.3 236.2 223.7 218.0
160,000 km 213.3 202.1 196.9 209.3 198.3 193.2
240,000 km 204.5 193.7 188.8 200.3 189.8 184.9
Deck)
80,000 km 239.9 227.3 221.4 236.2 223.8 218.0
160,000 km 213.9 202.7 197.5 209.7 198.7 193.6
240,000 km 205.3 194.4 189.5 200.9 190.3 185.5
57

80,000 km 221.1 209.4 204.1 220.1 208.6 203.2
160,000 km 187.5 177.6 173.1 186.1 176.3 171.8
240,000 km 176.3 167.0 162.7 174.8 165.6 161.3
Deck)
80,000 km 268.8 254.6 248.1 255.1 241.6 235.4
160,000 km 240.6 227.9 222.1 226.8 214.8 209.3
240,000 km 231.2 219.0 213.4 217.3 205.9 200.6
Tanker
80,000 km 259.1 245.4 239.1 255.2 241.8 235.6
160,000 km 214.7 203.4 198.2 210.8 199.7 194.6
240,000 km 199.9 189.4 184.5 196.0 185.7 180.9
58
New Brunswick Nova Scotia

80,000 km 174.2 165.0 160.8 175.0 165.8 161.5
160,000 km 152.7 144.6 140.9 153.4 145.3 141.6
240,000 km 145.5 137.8 134.3 146.2 138.5 135.0
80,000 km 180.5 171.0 166.7 181.4 171.8 167.4
160,000 km 159.2 150.8 146.9 159.9 151.5 147.6
240,000 km 152.0 144.0 140.3 152.7 144.7 141.0
80,000 km 179.6 170.1 165.7 181.1 171.5 167.1
160,000 km 153.0 144.9 141.2 154.4 146.3 142.5
240,000 km 144.1 136.5 133.0 145.5 137.8 134.3
80,000 km 161.8 153.3 149.3 163.6 155.0 151.0
160,000 km 140.7 133.3 129.9 142.4 134.9 131.4
240,000 km 133.7 126.7 123.4 135.3 128.2 124.9
80,000 km 206.2 195.4 190.4 207.8 196.9 191.8
160,000 km 181.4 171.9 167.5 182.9 173.3 168.8
240,000 km 173.2 164.0 159.8 174.6 165.4 161.1
Deck)
80,000 km 206.0 195.2 190.1 207.6 196.7 191.6
160,000 km 181.6 172.0 167.6 183.0 173.4 168.9
240,000 km 173.4 164.3 160.1 174.8 165.6 161.4
59

80,000 km 201.2 190.6 185.7 203.2 192.5 187.6
160,000 km 169.7 160.8 156.7 171.6 162.6 158.4
240,000 km 159.2 150.9 147.0 161.0 152.6 148.7
Deck)
80,000 km 234.2 221.9 216.2 232.5 220.3 214.6
160,000 km 207.6 196.6 191.6 205.8 195.0 190.0
240,000 km 198.7 188.2 183.4 196.9 186.5 181.8
Tanker
80,000 km 238.7 226.2 220.4 240.0 227.4 221.5
160,000 km 197.1 186.7 181.9 198.3 187.9 183.0
240,000 km 183.2 173.6 169.1 184.4 174.7 170.2
60
PEI Newfoundland
80,000 km 176.6 167.3 163.0 186.2 176.4 171.8
160,000 km 153.6 145.5 141.8 164.8 156.2 152.2
240,000 km 146.0 138.3 134.7 157.7 149.4 145.6
80,000 km 182.6 173.0 168.6 190.3 180.3 175.7
160,000 km 159.8 151.4 147.5 169.1 160.2 156.1
240,000 km 152.2 144.2 140.5 162.1 153.5 149.6
80,000 km 183.9 174.2 169.8 190.7 180.7 176.0
160,000 km 155.4 147.2 143.4 164.3 155.7 151.7
240,000 km 145.8 138.2 134.6 155.5 147.3 143.5
80,000 km 165.2 156.5 152.5 172.6 163.6 159.4
160,000 km 142.8 135.2 131.8 151.8 143.8 140.1
240,000 km 135.3 128.1 124.9 144.8 137.2 133.7
80,000 km 209.8 198.7 193.6 218.5 207.0 201.7
160,000 km 183.3 173.6 169.2 193.9 183.7 178.9
240,000 km 174.4 165.2 161.0 185.6 175.9 171.4
Deck)
80,000 km 209.3 198.3 193.2 218.2 206.7 201.4
160,000 km 183.2 173.6 169.1 193.9 183.7 179.0
240,000 km 174.5 165.3 161.1 185.8 176.1 171.5
61

80,000 km 207.2 196.2 191.2 214.1 202.8 197.6
160,000 km 173.3 164.2 160.0 182.8 173.2 168.7
240,000 km 162.0 153.5 149.6 172.4 163.3 159.1
Deck)
80,000 km 238.1 225.6 219.8 246.1 233.2 227.2
160,000 km 209.5 198.5 193.4 219.7 208.1 202.8
240,000 km 200.0 189.5 184.6 210.8 199.7 194.6
Tanker
80,000 km 247.4 234.4 228.3 253.4 240.1 233.9
160,000 km 202.3 191.6 186.7 211.9 200.8 195.6
240,000 km 187.3 177.4 172.9 198.1 187.7 182.9
62
Yukon Northwest Territories

80,000 km 217.7 206.2 200.9 210.0 199.0 193.9
160,000 km 197.0 186.7 181.9 189.4 179.4 174.8
240,000 km 190.2 180.1 175.5 182.5 172.9 168.4
80,000 km 225.6 213.8 208.3 215.3 204.0 198.7
160,000 km 205.1 194.3 189.3 194.8 184.5 179.8
240,000 km 198.3 187.8 183.0 187.9 178.0 173.5
80,000 km 215.3 204.0 198.8 211.1 200.0 194.8
160,000 km 189.6 179.6 175.0 185.3 175.6 171.0
240,000 km 181.0 171.5 167.1 176.7 167.4 163.1
80,000 km 194.6 184.4 179.6 192.7 182.5 177.8
160,000 km 174.4 165.2 161.0 172.4 163.4 159.2
240,000 km 167.7 158.8 154.8 165.7 157.0 153.0
80,000 km 258.5 244.9 238.6 245.4 232.5 226.5
160,000 km 234.6 222.3 216.6 221.6 209.9 204.5
240,000 km 226.7 214.7 209.2 213.6 202.4 197.2
Deck)
80,000 km 259.2 245.6 239.3 246.1 233.2 227.2
160,000 km 235.7 223.3 217.6 222.7 211.0 205.5
240,000 km 227.9 215.9 210.4 214.9 203.6 198.3
63

80,000 km 241.4 228.7 222.8 236.0 223.6 217.9
160,000 km 210.9 199.8 194.7 205.5 194.7 189.7
240,000 km 200.7 190.1 185.3 195.4 185.1 180.4
Deck)
80,000 km 293.0 277.6 270.4 288.6 273.4 266.4
160,000 km 267.5 253.5 247.0 263.1 249.2 242.8
240,000 km 259.1 245.4 239.1 254.6 241.2 235.0
Tanker
80,000 km 278.6 264.0 257.2 277.3 262.7 256.0
160,000 km 238.2 225.6 219.9 236.7 224.3 218.5
240,000 km 224.7 212.9 207.4 223.2 211.5 206.0
64
2 Axle Straight Truck Configuration Summary
10% Profit 5% Profit 2.5% Profit

Margin Total Margin Total Margin Total
Province: Costs (c/km) Costs (c/km) Costs (c/km)
British Columbia
40,000 km 390.1 369.6 360.1
80,000 km 364.1 345.0 336.1
120,000 km 355.5 336.8 328.1
Alberta
40,000 km 351.1 332.7 324.1
80,000 km 327.1 309.9 301.9
120,000 km 319.0 302.3 294.5
Saskatchewan
40,000 km 343.3 325.2 316.9
80,000 km 317.7 301.0 293.3
120,000 km 309.2 292.9 285.4
Manitoba
40,000 km 341.4 323.4 315.1
80,000 km 315.6 299.0 291.3
120,000 km 307.0 290.9 283.4
Ontario
40,000 km 359.8 340.8 332.1
80,000 km 333.0 315.5 307.4
120,000 km 324.1 307.0 299.2
Quebec
40,000 km 345.6 327.4 319.0
80,000 km 318.7 301.9 294.2
120,000 km 309.7 293.4 285.9
65
New Brunswick
40,000 km 293.8 278.4 271.2
80,000 km 269.3 255.1 248.6
120,000 km 261.1 247.3 241.0
Nova Scotia
40,000 km 295.2 279.7 272.5
80,000 km 270.5 256.3 249.7
120,000 km 262.3 248.5 242.1
P.E.I.
40,000 km 293.3 277.9 270.8
80,000 km 266.8 252.7 246.2
120,000 km 257.9 244.3 238.1
Newfoundland
40,000 km 301.6 285.8 278.4
80,000 km 277.2 262.6 255.9
120,000 km 269.0 254.9 248.3
Yukon
40,000 km 387.0 366.7 357.3
80,000 km 363.3 344.2 335.4
120,000 km 355.4 336.7 328.1
N.W.T.
40,000 km 370.7 351.2 342.2
80,000 km 346.7 328.5 320.0
120,000 km 338.7 320.9 312.6
66
APPENDIX B
RATES FOR HAULING CONTAINER CHASSIS ON

SPECIFIED CORRIDORS (ONE-WAY)
67
$ $
Truck
Canadian Corridors Analysis -- PC*Miler Distances and Running Times Cost Per Delivery
Distance Distance
(MI) (KM) Transit (Hr) Km Cost Per Trip
1 St John's, NL Toronto, ON 1914.7 3081.3 68.0 131.9 $4,064
2 Halifax, NS Moncton, NB 162.6 261.6 5.1 136.5 $357
3 Halifax, NS Toronto, ON 1111.6 1788.9 34.2 124.5 $2,227
4 Moncton, NB Montreal, QC 617.3 993.4 23.2 126.0 $1,252
5 Quebec, QC Baie Comeau QC 255.9 411.8 7.2 142.2 $586
6 Montreal, QC Quebec, QC 156.7 252.1 5.0 148.3 $374
7 Val D'Or Toronto, ON 455.9 733.7 11.6 137.3 $1,007
8 Toronto, ON Montreal, QC 337.6 543.3 9.0 139.0 $755
9 Toronto, ON Winnipeg, MB 1379.8 2220.5 56.2 130.1 $2,889
10 Sault Ste Marie Toronto, ON 423.5 681.5 10.9 139.7 $952
11 Winnipeg, MB Calgary, AB 826.1 1329.4 27.9 133.1 $1,769
12 Saskatoon Calgary, AB 386.0 621.2 10.1 135.5 $842
13 Calgary, AB Vancouver, BC 604.4 972.7 22.9 143.9 $1,400
14 Calgary, AB Edmonton, AB 188.7 303.7 5.7 149.1 $453
15 Edmonton, AB Yellowknife, NT 929.5 1495.8 30.2 142.7 $2,135
16 Vancouver, BC Toronto, ON 2716.5 4371.7 101.9 136.5 $5,967
17 Whitehorse, YT Vancouver, BC 1584.3 2549.6 52.7 152.3 $3,883
68
Truck
International Corridors Analysis -- PC*Miler Distances and Running Times Cost Per Delivery
Distance Distance
(MI) (KM) Transit (Hr) Km Cost Per Trip
1 Montreal, QC New York, NY 374.5 602.7 10.8 139.1 $838
2 Toronto, ON Chicago, IL 514.0 827.2 21.9 139.3 $1,152
3 Cambridge, ON Detroit, MI 182.3 293.3 6.6 151.4 $444
4 Toronto, ON Dayton, OH 439.8 707.8 12.3 140.5 $994
5 Kingston, ON Detroit, MI 389.6 627.0 11.2 142.0 $890
6 Winnipeg, MB Kansas City, MO 814.9 1311.4 28.6 130.8 $1,715
7 Calgary, AB Phoenix, AZ 1541.9 2481.4 52.8 138.4 $3,434
8 Vancouver, BC Los Angeles, CA 1280.7 2061.0 47.0 142.9 $2,945
Truck
Cost Per Delivery
Additional Corridors For Rail and Marine Comparisons of Chassis Movements Km Cost Per Trip
1 Sept Iles Trois Rivières 476.5 766.8 13.1 139.3 $1,068
2 Halifax Chicago 1,616.2 2600.9 62.4 123.8 $3,219
3 Montreal St John's 1,579.5 2541.9 61.6 132.9 $3,379
4 Halifax Boston 701.7 1129.2 26.1 125.7 $1,420
5 Toronto Memphis 969.4 1560.1 32.0 136.0 $2,121
6 Toronto Detroit 236.9 381.3 7.8 147.4 $562
69
APPENDIX C
SUMMARY OF OWNER OPERATOR ANALYSIS RESULTS
BY REGION
70
Region: British Columbia
No of responses: 2
Worked Hours: 2,554

Driver Costs $30,000 $0.257 15.9 $11.75
Road Expenses $3,100 $0.027 1.6 $1.21
Fuel Costs $79,626 $0.681 42.3 $31.18
Tire Costs $4,746 $0.041 2.5 $1.86
License Costs $500 $0.004 0.3 $0.20
Insurance Costs $14,077 $0.120 7.5 $5.51
Depreciation $25,843 $0.221 13.7 $10.12
Interest $1,922 $0.016 1.0 $0.75
Communications $2,763 $0.024 1.5 $1.08

Total Costs $199,644 $1.708 106.1 $78.17
71
Region: Alberta
No of responses: 2
Worked Hours: 977

Driver Costs $18,307 $0.189 11.7 $18.74
Road Expenses $9,275 $0.096 6.0 $9.49
Fuel Costs $67,717 $0.699 43.5 $69.31
Tire Costs $46 $0.000 0.0 $0.05
License Costs $4,070 $0.042 2.6 $4.17
Insurance Costs $7,741 $0.080 5.0 $7.92
Depreciation $18,667 $0.193 12.0 $19.11
Interest $12,669 $0.131 8.1 $12.97
Communications $4,175 $0.043 2.7 $4.27

Total Costs $186,523 $1.926 119.7 $190.91
72
Region: Ontario
No of responses: 20
Worked Hours: 3,786

Driver Costs $42,203 $0.349 21.7 $11.15
Road Expenses $6,691 $0.055 3.4 $1.77
Fuel Costs $63,373 $0.524 32.6 $16.74
Tire Costs $3,890 $0.032 2.0 $1.03
License Costs $4,038 $0.033 2.1 $1.07
Insurance Costs $7,813 $0.065 4.0 $2.06
Depreciation $19,893 $0.165 10.2 $5.25
Interest $4,416 $0.037 2.3 $1.17
Communications $4,192 $0.035 2.2 $1.11

Total Costs $177,674 $1.469 91.3 $46.93
73
Region: Quebec
No of responses: 4
Worked Hours: 1,778

Driver Costs $24,220 $0.241 15.0 $13.62
Road Expenses $5,100 $0.051 3.2 $2.87
Fuel Costs $52,919 $0.527 32.7 $29.76
Tire Costs $3,514 $0.035 2.2 $1.98
License Costs $3,100 $0.031 1.9 $1.74
Insurance Costs $8,833 $0.088 5.5 $4.97
Depreciation $16,517 $0.164 10.2 $9.29
Interest $8,483 $0.084 5.2 $4.77
Communications $4,750 $0.047 2.9 $2.67

Total Costs $150,122 $1.494 92.8 $84.42
74
Region: Atlantic Canada
No of responses: 6
Worked Hours: 2,773

Driver Costs $36,196 $0.313 19.5 $13.06
Road Expenses $12,551 $0.109 6.7 $4.53
Fuel Costs $56,426 $0.488 30.3 $20.35
Tire Costs $4,226 $0.037 2.3 $1.52
License Costs $3,048 $0.026 1.6 $1.10
Insurance Costs $7,107 $0.061 3.8 $2.56
Depreciation $19,406 $0.168 10.4 $7.00
Interest $6,273 $0.054 3.4 $2.26
Communications $3,682 $0.032 2.0 $1.33

Total Costs $167,523 $1.449 90.0 $60.42
75
Region: > 30% MILEAGE in USA
No of responses: 31
Worked Hours: 3,159

Driver Costs $43,131 $0.349 21.7 $13.65
Road Expenses $11,031 $0.089 5.5 $3.49
Fuel Costs $56,867 $0.460 28.6 $18.00
Tire Costs $3,541 $0.029 1.8 $1.12
License Costs $4,259 $0.034 2.1 $1.35
Insurance Costs $8,589 $0.070 4.3 $2.72
Depreciation $19,398 $0.157 9.8 $6.14
Interest $2,832 $0.023 1.4 $0.90
Communications $4,195 $0.034 2.1 $1.33

Total Costs $179,853 $1.456 90.5 $56.93
76
APPENDIX D
COSTING ANALYSIS OF CROSS LAKE FERRY OPERATION
OSWEGO-TORONTO
77
Costing Analysis of Cross Lake Ferry Operation Oswego-Toronto
While there have been proposals for a cross lake service one does not currently
exist. However, estimated potential ferry charges based on avoidable over-the-
road costs were calculated. Details are provided below. This analysis is
provided only as an example as actual charges could vary considerable because
of prevailing market conditions. For analytical purposes, three origins were
selected, Boston, New York and Philadelphia. For each origin, important
container terminal facilities were selected as the origin point. These were:
Port of New York:

Maher Terminals
Fleet Street
Elizabeth, NJ 07201
Port of Boston
Paul W. Conley Container Terminal
E. First Street and Farragut Rd
South Boston MA 02127
Port of Philadelphia
Packer Avenue Marine Terminal
Columbus Blvd (Delaware Ave) at Packer Avenue
Philadelphia PA 19148-5115 (this zip may be a P.O. box rather than an
address)
For each origin, distance was calculated to Oswego and Toronto based on PC
Miler distances using the addresses’ zip code as the origin point. Other locations
(e.g. domestic) points could have been selected but would have made little
difference in the mileage calculations or in truck costs. For Toronto, distance to
the Port was used as a proxy for the Toronto area. Mississauga would have
been shorter but Scarborough or Markham would have been longer. Highway
distances as calculated with PC Miler follow.
Highway Distances to Toronto and Oswego KM MILES

Boston, MA port Toronto, ON port 868.2 539.5
Boston, MA port Oswego, NY port 535.3 332.6
New York, NY port (Elizabeth,
NJ) Toronto, ON port 742.2 461.2
New York, NY port (Elizabeth,
NJ) Oswego, NY port 441.8 274.5
Philadelphia, PA port Toronto, ON port 770.9 479.0
Philadelphia, PA port Oswego, NY port 470.2 292.2
Hamilton, ON port Toronto, ON port 70.6 43.9
78
Marine distance from Oswego to Hamilton was assumed to be 216 km and cross
lake transit time at 12 hours.8 The service would be drop trailer with two ferries
each operating one round trip per day.
Notwithstanding, the foregoing, the true measure of what would be available for a
ferry service depends upon the level of competition that truck operators could
provide. Accordingly, the truck costing model was used to develop over-the-road
truck costs including a margin for profit. The following tables provide the
comparison of what would presumably be available for a ferry service when the
trucking costs from New York, Boston, and Philadelphia respectively direct to
Toronto or via Oswego and Hamilton are compared.
Movement Cost
Direct trucking from New York to Toronto $1,026
Trucking Cost for road portion of same movement
using potential Oswego-Hamilton ferry service:
New York – Oswego $658
Hamilton-Toronto $135
Total cost $793
Cost difference available for ferry service

($1,026 -$793) $233
Movement Cost
Direct trucking from Boston to Toronto $1,193
Boston – Oswego $788
Total cost $923

($1,193 -$923) $270
8
Marine Transportation in Ontario, A study for the Marine Transportation Forum and the Ontario
Ministry of Transportation, The Mariport Group, December 2006, p 13.
79
Movement Cost
Direct trucking from Philadelphia to Toronto $1,064
Philadelphia – Oswego $698
Total cost $833

($1,064 -$833) $231
With a drop trailer service, considerable space would be required at each end to
marshal and store the trailers and there would be a cost for this. Also, ferry
loading/unloading would be time consuming. West Coast barge jockeying
charges, for example, are in the order of $30 per trailer at each end of the barge
movement and Marine Atlantic charges are considerably higher ($99.25). If
costs comparable to those at the West Coast were to be assumed this would
remove about $60 from the share available for the actual cross-lake operation.
In addition, a cross-lake service would add in the order of 14 hours to an average
transit time.
A split movement would have some natural advantages and some potential
disadvantages.
Advantages:
 Because drivers would only operate within their home country, border
certification would not be needed.
 Potential for reduced costs where daily round trips are possible.
 Fewer trucks on the road between the border and Hamilton.
Disadvantages
 There could be additional CBSA charges at Hamilton if the Windsor ferry
model is followed.
 Container transit time would be greatly increased if the ferry option is
used.
 If any problems occurred with the ferry operation,9 transit time could be
greatly increased – essentially one day longer.
 There would be cost associated if tractors have an extended wait for the
ferry or for having to hold trailers waiting for pick-up.
9
For example, breakdown or weather problems.
80

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Final Report

OPERATING COSTS OF TRUCKING

By Ray Barton Associates Ltd.

March 31, 2008

TABLE OF CONTENTS .................................................................................................. 2

List of Exhibits ................................................................................................................. 3

1.0 Introduction ............................................................................................................... 4

2.0 Truck Costing ............................................................................................................ 5

3.0 Effects of Fleet size ................................................................................................. 36

4.0 Private vs. For-hire fleets......................................................................................... 38

5.0 Owner-Operator Cost Survey .................................................................................. 40

6.0 Rail .......................................................................................................................... 43

7.0 Marine Movements .................................................................................................. 49

Exhibit 2.1: Equipment Configurations for Case Studies...................................... 6

Exhibit 2.3: Representative Driver Wages .......................................................... 19

Exhibit 2.4: Fuel Costs ........................................................................................ 21

Exhibit 2.5 Purchase Cost of Power Units .......................................................... 24

Exhibit 2.6 Purchase Costs for Trailer Units ....................................................... 25

Exhibit 2.7: Licencing Fees and Weights ............................................................ 27

Exhibit 2.8: Unit Tractor-trailer Cost Comparisons Over Time ............................ 30

Exhibit 5.1: Owner-operator Costs ...................................................................... 40

Exhibit 5.2: Comparison of Owner-operator and Fleet Vehicle Costs ................. 42

Exhibit 6.1: Intermodal Rates for Selected Corridors CN Rail ............................. 44

Exhibit 6.2: Intermodal Rates for Selected Corridors CP Rail ............................. 45

OPERATING COSTS OF TRUCKING AND

Since 1972, Transport Canada has sponsored research and publication of

Objectives for this project are as follows:

 Reflect differences in the truck operating cost structure associated with a

 Depict differences, if any, from base case trucking service options

 Provide comparative intermodal transportation service costs for:

2.0 Truck Costing

Documentation of this approach has been widely described in prior editions of

Whether the trucking operation is for-hire, or part of a private fleet, providing an

Currently, operator margins tend to be lower, perhaps averaging from 2.5 to 5%

margins reported by express transportation companies operating a premium

To enumerate all of the foregoing cost components, an Excel based costing

Exhibit 2.1: Equipment Configurations for Case Studies

Five Axle Semi Trailer (Van)

Exhibit 2.1: Equipment Configurations for Case Studies

Five Axle Semi Trailer (Flat deck or Lowboy)

Five Axle Semi Trailer (Liquid Tank)

Exhibit 2.1: Equipment Configurations for Case Studies

Five Axle Container Chassis

Six Axle Tridem Semi Trailer (Van)

Six Axle Tridem Semi Trailer (Flat Deck)

Exhibit 2.1: Equipment Configurations for Case Studies

Six Axle Tridem Tank Trailer

Eight Axle Super B-Train (Flat Deck)

Eight Axle Super B-Train (Liquid Tank)

Exhibit 2.1: Equipment Configurations for Case Studies

Two Axle Straight Truck (Van)

The calculation is a replica of the methodology commonly used by fleet operators

Input Unit Costs

1) Truck Fleet Supplier Quotations (Equipment, tires, fuel).

2) Fleet Operator Expert Consultation in all Regions. A telephone survey

3) Literature Review on the Subject of Driver Costs (rates of pay, working

4) Regulatory Publications (vehicular size and weight restrictions, license

For trucks domiciled in US Regions, on the selected international corridors, unit

For operations on international Canada - US corridors, most costs were based on

Vehicle Configurations and Equipment Life Cycle

In order to better standardize Operating Costs of Trucks in Canada, some

Power Unit Configurations

 TRACTOR FOR A FIVE AXLE SEMI CONFIGURATION: Conventional