The vast transport and storage industry in Canada includes a number of business subsectors, ranging from air, rail and maritime transport, to courier services. This industry has been one of Canada’s main business sectors affected by the impact of the pandemic. In 2020, Canada’s gross domestic product experienced a more pronounced drop (-20.4%) than all other Canadian sectors (-5.2%).1
Road transport: A Look Back at the Pandemic Year
In spring 2020, the industry had to quickly restructure itself following the stoppage of non-essential service activities, closure of the borders and implementation of strict health measures. “COVID-19 came to us as a shock, since we had never experienced a crisis of this size on a global scale,” said Mr. Uracz, Account Manager specialized in Transport at Hitachi Capital Canada. “We had to respond quickly.”
In the middle of the pandemic, demand for road transport services for consumer goods and food products reached an unprecedented peak. However, the stoppage of manufacturing activities caused disruptions in retailers’ supply chains, which affected needs for commercial carrier services. As a result, although a significant proportion of truckers remained critical for providing essential services, employment shrunk by approximately 10% in the hauling and logistics sector in the first quarter of 2020. This is the equivalent of 72,000 positions, including truckers who represented around half.2
Industry Subsectors Respond to High Demand
A sector of the transport industry had demand for its services explode during the first lockdown, in particular courier and home delivery services. The closure of non-essential businesses generated great enthusiasm in consumers for online shopping. According to Statistics Canada, during the pandemic, 45% of Canadians purchased physical goods online more often than before 20203 and online retail sales rose by 102.1% in May 2020, compared with February 2020.4 Canada Post delivered a million or more packages per day for 181 consecutive days, from mid-April to the end of 2020.5
The transport equipment sales market also experienced soaring demand from buyers. "The stoppage of equipment manufacturing caused a decrease in the availability of new material, which caused buyers to turn to users, whose units for sale are increasingly rare. A vicious circle was began. Prices shot up by approximately 15 to 20%,” said Mr. Uracz.
Transport Experts from Hitachi Capital Canada
Specialized intermediary finance at Hitachi Capital Canada has ensured an active presence in the Canadian transport industry for a number of years. They have an overall view of the current situation in the industry and an in-depth understanding of price fluctuations and economic performance indicators. They are leveraging their knowledge when the time comes to guide their clients in decisions related to their financing needs.
According to Mr. Uracz, “Since we have been following the evolution of the industry for a long time already, we know enough to advise our clients toward gradual growth that will withstand the test of time. We help them make decisions that will be advantageous in the short term as well as in five years.”
Hitachi Capital Canada offers a wide array of flexible business solutions for small, middle market and large corporations. Our intermediary finance provide support throughout the decision-making process: first they listen to their clients to properly understand their financial situation, then they guide them toward the next steps to take to increase their business’s profitability.
According to Mr. Uracz, “As we can see with the current pandemic happening, there is a lot of unknows in this world and we do not always know what is coming next. The best thing to do is to make sure that our clients are well positioned to handle the unexpected.”
Outlook for the Future
It is thought that the resumption of economic activities for the transport sector should take another one to two years to recover. Nationally, the first increase in trucking employment was seen in May of this year, bringing the number of people working in the sector to 4 percent below its 2019 level.6 Also, Transport Canada is helping with the economic recovery through the National Trade Corridors Fund, by giving the green light to 89 projects that will involve a total federal investment of $1.9B.7
Adrian Uracz, who is based in the Toronto area, helps develop business relations at Hitachi Capital Canada across Ontario in his role as intermediary finance. He has worked in the sales and finance sectors since 2013. He is currently concluding financial transactions worth over $100M. He sets himself apart at Hitachi by his exemplary leadership of his team and he is a trusted source for his clients thanks to his sincere desire to help local entrepreneurs prosper.
1Statistics Canada. (June 2021). “Transportation Data and Information Hub”. Accessed at https://www144.statcan.gc.ca/tdih-cdit/index-eng.htm.
2Reynolds, Christopher. (August 2020). “La pandémie de COVID-19 préoccupe de nombreux camionneurs” (the COVID-19 pandemic worries a many truckers) (French only) in Le Soleil. Accessed at https://www.lesoleil.com/affaires/la-pandemie-de-covid-19-preoccupe-de-nombreux-camionneurs-eb2607392eaee8bfa2ce26715f0d95b2.
3Statistics Canada. (June 2021). “Internet use and COVID-19: How the pandemic increased the amount of time Canadians spend online”. Accessed at https://www150.statcan.gc.ca/n1/pub/45-28-0001/2021001/article/00027-eng.htm
4Statistics Canada. (April 2021). "Retail e-commerce sales (table)". Accessed at https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=2010007201&cubeTimeFrame.startMonth=02&cubeTimeFrame.startYear=2020&cubeTimeFrame.endMonth=05&cubeTimeFrame.endYear=2021&referencePeriods=20200201%2C20210501&request_locale=en.
5Canada Post. (2021). "Annual Report 2020: 2020: An unprecedented year". Accessed at https://www.canadapost-postescanada.ca/cpc/en/our-company/about-us/financial-reports/2020-annual-report/an-unprecedented-year.page.
6Statistics Canada. (June 2021). “Labour Force Survey, May 2021”. https://www150.statcan.gc.ca/n1/daily-quotidien/210604/dq210604a-eng.htm.
7Statistics Canada. (June 2021). “Transportation Data and Information Hub”. Accessed at https://www144.statcan.gc.ca/tdih-cdit/index-eng.htm.