The industry was able to rapidly recover as booming oil production caused demand to climb
(PRWEB) February 15, 2015
Over the five years to 2015, the Local Specialized Freight Trucking industry has had a bumpy ride. Industry operators transport freight requiring specialized handling and trailers within metropolitan and local areas. This includes bulk liquids, dry bulk materials, forest products, refrigerated goods, automobiles and heavy equipment. The industry was able to rapidly recover from the recession as booming oil production and construction activity caused demand to climb. For instance, increasing tar sand oil production increased the need for trucks that can transport drilling equipment, relevant chemicals, tar sands and the oil itself. Therefore, in the five years to 2015, industry revenue is expected to rise.
However, while the industry has done well over the five-year period as a whole, it has had difficulty in recent years. “As a result of a global oversupply of coal and iron, the Canadian mining sector's revenue started to decline in 2012, which is expected to continue to in 2015,” says IBISWorld Economic Analyst Maksim Soshkin in the updated report. In addition, the oil and gas extraction sector has also levelled off, as recent declines in the price of crude oil tampers with production. Moreover, fears over a housing bubble have reduced residential construction activity. As a result of the slowdown in all of these sectors, demand for industry services has fallen, with revenue expected to increase slightly in 2015. The industry has also consolidated in recent years, with large carriers acquiring smaller ones to increase their value-added services and enter growing markets, such as servicing oil producers.
Over the five years to 2020, industry revenue is forecast to grow. As the economy continues to grow, so will demand for industry services. Operators will also benefit from increased use of just-in-time inventory management and increased supply chain integration. “Not only will these trends increase the frequency of deliveries, but they will also make supply chains more complex, encouraging large corporations to outsource their trucking fleets, thereby increasing the size of the market of carriers,” Soshkin says in the updated report. However, with oil prices expected be volatile, oil production and related investment may fall, leading to reduced demand for industry services.
For more information, visit IBISWorld’s Local Specialized Freight Trucking in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in this industry provide local trucking services using specialized equipment within a metropolitan area. Companies in the industry transport bulk liquids, dry bulk materials, forest products, automobiles, boats, livestock and other specialized freight. This does not include the transport of used goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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