US/Canadian Dollars at Par - What does it mean for the moving industry?

Rick Taylor October 13, 2010 News, International Moving

As I write this, the Candian dollar and US dollar are virtually at the same level. If it stays in this range for some time, how would it effect the moving industry?

Canada and the United States are each others largest trading partners. Not only do we move goods and services across the border but people. Indeed, employee relocation to the United States from Canada and vice versa is a very important part of the moving industry.

Trucking laws prohibit Canadian drivers to interstate (i.e. perform moves within the United States) and for US drivers to do the same in Canada. As such, it is very difficult for moving companies to get effecient full loads on cross border moves. Many drivers have to go a fair distance in between stops (called empty miles) for their next pick up or delivery. This does add significant costs to the van foreman as these "empty miles" are not revenue generating.

Over the past few decades, the majority of the van foreman operating on this route were Canadian drivers. As these moves were paid in US currency, the Canadian based drivers were able to absorb these ineffeciencies due to the currency premium they enjoyed when they converted these US dollars back into Canadian funds.

That is no longer the case.

As a result,many van foreman and moving companies are slowly leaving the cross border business. While this has yet to have an impact in this sluggish economy with volume levels being low,it will be a major issue when we return to more normal levels of activity.

In order to stay in this business, the remaining providers will need to look at alternative service models and most importantly, have the large amount of volume necessary to create the effeciencies needed.

Taylor Moving/Taylor International is at the forefront of cross border business which represents almost 40% of our overall business mix. We look at these changes not as a problem but as an opportunity to expand our reach while continuing to offer our clients the seamless cross border services they have come to rely on us to provide. Please contact your Account Executive or Moving Consultant if you want to learn more.

Nicole October 25, 2010 @ 2:02 PM

Very informative and well written. Looking forward to more blogs relating current events to the moving industry.

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