MISSISSAUGA, Ont. — Two key trends affecting the Canadian transportation industry today are the disparity between the US and Canadian economies, and the weakness of the Canadian dollar.
That was the message from Silvy Wright, president and CEO of Northbridge Insurance, when speaking today at the Surface Transportation Summit.
She said the strength of the US economy compared to Canada’s has meant more freight is moving north-south than east-west, the opposite of what has been seen over the past five years. Increased exposure to the litigious US has implications for insurers and carriers.
Wright said the loonie was on par with the Canadian dollar two years ago, and now sits at about 75 cents. This means a 30% increase in the cost of equipment and claims costs for Canadian carriers travelling to the US.
She pointed out a $5-million limit on a policy issued in Canadian dollars means the policy will only cover about US$3.7 million in the event of a claim that originates in the US.
Canadian trucking companies that operate in the US should be aware of high-risk, hyper-litigious areas, which tend to include to the states of California, Texas, New Mexico, Louisiana and Florida.
“If you are increasing your routes in the US, understand when you go through Louisiana or Florida, you are potentially subject to a very litigious environment,” Wright warned, emphasizing the need for route planning. She also urged carriers to pass this information along to shippers so they can share the cost of the heightened risk.
Wright concluded her comments by urging carriers to focus on innovation.
“We’re all busy managing our operations,” she said. “But we need to make time to think about innovation. I really urge, whether you’re a small company or a large company, to have a dedicated person or dedicated time where the executive team comes together and thinks about innovation. What are you doing to improve that? How do we take innovation to the next level for the transportation industry? Because if we don’t, somebody else will.”
James Menzies is editor of Truck News magazine. He has been covering the Canadian trucking industry for more than 15 years and holds a CDL. Reach him at firstname.lastname@example.org or follow him on Twitter at @JamesMenzies. All posts by James Menzies