What can carriers do to moderate the impact of the high Canadian dollar?
Leading CEOs weigh in on that key question in Part III of our series on the insights and advice of Canada’s trucking industry leaders. Their comments were made during the OTA’s recent CEO forum.
Here’s what they had to say about dealing with concerns over the high dollar:
Serge Gagnon, XTL Transport: You will not be in business if you don’t address it. It’s very simple you’re losing 20%. You have no choice. When we did the budget in 2002 we did it with the U.S. dollar at $1.54 (Cdn). We were facing a choice. We told customers we either change that or we walk away from business. It was their choice. As of September, we don’t have any more problems with currency. They have been solved. .
Brian Taylor, Liberty Linehaul: We all got caught up on the upside the last few years and thought of U.S. currency as an asset and now it’s a liability. The only option you have is to reprice. You can also hedge that liability by making your payables in U.S. dollars equal your receivables in U.S. dollars. Now that we’ve seen what can happen, going forward maybe more of us will do that.
Dan Einwechter, Challenger Motor Freight: You can forward trade your currency with the bank a year or two out and that will cover you a little bit. With clients we’ve had to either go back to them and put a currency surcharge in place or sit down with them and say here’s what the exchange rate was when those rates went into playIn some cases we will be more expensive than U.S. carriers. But because of the Homeland Security issues, because of high demand next year and tight supply, U.S. carriers can’t be everywhere and their trucks will be pulled back into U.S. soil next and we will still be moving the freight. But I still get carriers calling me asking what they can do about the currency situation. The problem started in January. If you’re asking in November what to do, I tell you now, if you’ve done nothing, kiss yourself goodbye, I want your drivers.
Mark Seymour, Kriska Transportation: We have to believe that raising rates because of the dollar is not creating an opportunity for U.S. carriers to come to Canada because they have to appease their labor force and their labor force does not want to deal with the border. If they can keep their assets busy south of the border and not have to deal with the border, that’s exactly what they want to do.
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