Merger time in the Maritimes

MONCTON — Canada’s eastern provinces have an "overabundance of carriers," and something’s gotta’ give.

That’s the word from Atlantic Provinces Trucking Association (APTA) Chairman Shane Esson.

He says when too many smaller carriers are fighting for their survival, rates drop to unprofitable levels, so you’re liable to see bigger outfits join forces to make trucking practical again.

According to the New Brunswick Business Journal, Esson, who is also general manager of Keltic Transportation Group, told about 40 people at Transportation Club of Moncton meeting that the two big fleet mergers that took place last month are the just the start of a trend.

In the same week in January, Warren Transport merged with D.D. Transport of Mount Pearl, Nfld., to form Atlantica Diversified Transportation Systems while Irving Transportation System announced that its subsidiary Sunbury Transport would be united with sister carrier RST Transport.

Esson noted that the consolidation trend is a North-American wide phenomenon, but he expects mergers to accelerate in Atlantic Canada specifically so companies can leverage economies of scale in this challenging market.

Maritime truckers have been hit particularly hard with the lumber market which was only made worse by slumps in the potato, seafood and peat-moss markets.

Esson also cited the credit crunch as a force driving truckers out of business. Fuel suppliers began asking truckers to pay for fuel within seven to 10 days, instead of the usual 30 or more.

Finally, Esson noted that 2010 has brought with it a modest upswing in business, though the rebound has not been particularly muscular.

"It’s going to be later on this year before the economy really starts to pick up," he was quoted as saying. "What I see happening is, only the strong will survive." 


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