The Loonie – A Hindrance or An Opportunity?

Whether it was to catch a cheaper flight from Bellingham to Las Vegas or to shop at an I-5 outlet mall, since 2013 many British Columbians were flocking to the nearest lower-mainland border crossing and travelling to the states in search of a good deal.

Canadian dollar the loonieHowever, a weakened Loonie curbed many Canadian shoppers who’d been making the trip south of the border to stay home. Indeed throughout Washington State’s Whatcom County, retailers in border towns like Sumas, Blaine, Lynden and further south to Ferndale and Bellingham have seen dramatic drops in Canadian shoppers since 2013 (BPRI Winter 2017 Brief: Changes in Canadian Shopping Visits in Northwest Washington, 2013 to 2016).

Interestingly though the loonie has rallied in value to a little over 80 cents to the American dollar. Will we see a surge in cross-border activity again here in Whatcom County? We hope so! However, even in light of recent news, there’s more to the ‘cross-border currency’ story than shopping. Like SELLING! CADUSD20yrs

Historically the USD has dominated over the Loonie as reflected in this 20 year chart. (Source)

A paradigm shift. Can Canadians consider the exchange rate between the Canadian Dollar (CAD) – USA Dollar (USD) not as a hindrance, but rather as an opportunity? They should! Here’s why.

Assuming all the proverbial ducks are in a row, ‘I’s dotted and ‘T’s crossed, the savvy B.C. business owner and entrepreneur stands to earn at least 20% more on their U.S. sales in part due to the favorable exchange rate.

“Here are the simple facts” says UCanTrade, Inc. president and dual citizen, Jim Pettinger: “(1) most U.S. land border crossings have been upgraded and are fully open for Canadian goods and people, (2) each sale you make for US$100 nets you C$120 or more, (3) your business presence in the U.S. can lead to a green card and dual-citizen status if you wish , and (4) American buyers (a) love Canadian goods, (b) have double the available money of their Canadian counterparts and (c) make their buying decisions at least  three times as fast.”

If history is an indicator then a long-term outlook is for a weak Loonie. Canadian companies need to immediately seize the opportunity to stake a position in the lucrative U.S. market. With careful planning, the initial cost can be minimal, but the payoff could be enormous.

Interested in learning more about doing business in the USA? Attend our next DBUSA Seminar &/or download this whitepaper “Ten Tips for Better Border Business”.

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

Subscribe to our TradeTips Newsletter for the latest import/export events and trade news, and/or call us at (360) 380-6900.

UCanTrade
Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade

The impact of e-commerce on truck manufacturing.

There’s little doubt digital online buying – a.k.a. the ‘Amazon Effect’, is impacting traditional retailers, especially since Walmart has stepped up to the plate to compete with Amazon in this competitive e-commerce space.  While consumers enjoy the benefits of their e-commerce ‘warfare’, another dynamic to the ‘Amazon Effect’ being brought into the forefront is truck and trailer manufacturing.

The supply procedure of any online purchase is run ‘not as a marathon but rather as a relay,’ says Bruce Sauer, of Truck/Body Builder. Adding, “Track coaches typically assign their fastest, most reliable runner to anchor the final leg of the race. It’s where many relays are won and lost”. His clever analogy highlights the importance and emphasis supply chain management and 3PL (third party logistics) companies are putting on the ‘final mile’ – the shipping, handling and delivery phase, of any e-commerce order.  Retailers need to be paying attention too.

Delivery vehicles are being re-designed to have better maneuverability at distribution and fulfillment centers moving away from full truckload models to more ‘metro-friendly freight patterns.’  Additionally, vehicles will likely be lighter and also get better gas mileage; ‘optimized’ so as to maximize cargo space and keep drivers comfortable, safe and able to conduct their job most efficiently. E-commerce has created a ‘trucking revolution’ that has really only just begun.

Since the physical size of the United States remains enormous, trailers will remain to play a vital role says Brent Yeagy, president and chief operating officer at Wabash National, a leading producer of commercial trucking equipment.  However, “E-commerce is not linear,” Yeagy says, “It’s growing exponentially. And its implications for the trucking industry promise to be more disruptive than 99% of us can even fathom at this point.”

Consumer expectations are also a big influencer. AlixPartners, LLP recently found in their 2016 Consumer Shipping Survey, seventy-five percent of e-commerce consumers are ‘greatly impacted’ by free shipping when they are making purchasing decisions. ‘Free and fast’ are what consumers expect and this expectation is another reason delivery vehicle manufacturers are rethinking their designs.

Simply put, a consumers’ last impression of a retailer is based upon their interaction with the ‘delivery company’.  An all out effort to streamline the supply chain down to redefining the design of the delivery truck, are underway.  Ultimately, consistent and reliable order fulfillment and delivery are imperative to any successful e-commerce retailer’s sustainability – especially in the competitive U.S. market.

TradeTips blog is published by UCanTrade, Inc., your cross-border experts since 1984.

Subscribe to our TradeTips Newsletter for the latest import/export events and trade news, and/or call us at (360) 380-6900.

UCanTrade
Website: www.UCanTrade.com
Phone: 360-380-6900
Email: info@UCanTrade.com
Twitter: @UCanTrade

(Source: Alix Partners, LLP article: “Final-Mile Delivery: What Do Online Shoppers Want? And How Should Retailers and Their Logistics Partners Respond?”)

(Source: Truck/Body Builder, “How the shipping model of e-commerce is impacting truck body and trailer manufacturers –the ‘Amazon effect’ of fast, free shipping re-routes truck body/trailer builders’ thinking”.)