Keeping the Big Wheels Turning

Trucking in the U.S. and Canada

“The trucking industry plays a critical role in Canada’s domestic and North American transportation,” says Josianne Martel, Communication Advisor for Transport Canada. “Almost all goods are at some point carried on a truck, and over half of all two-way trade with the U.S. is carried by this mode of transportation.”

Critical indeed, considering that over 10 million trucks cross Canada-U.S. borders annually with two-way goods trading valued at $570 billion according to Transport Canada’s 2012 statistics. “Trade with the U.S. grew rapidly between 1993 and 2000 before stalling during the 2001 recession,” continues Josianne. “Road was the dominant mode, accounting for approximately 60 percent of exports to the U.S. every year. It has fallen to 45 percent in 2012.”

With close to 8,000 kilometres of highway, the Trans-Canada connects all 10 Canadian provinces with major trade crossing points into the U.S.’s interstate systems. The 83 year old Ambassador Bridge connecting Windsor, Ontario with Detroit, Michigan, is the busiest Canadian border crossing with over 8,000 trucks per day, accounting for more than 25 percent of merchandise trade between the two countries. It’s expected that in the next 30 years, truck traffic will increase by 128 percent at the Ambassador Bridge crossing.

In June 2012, Canada and the U.S. announced an agreement to construct a new publicly owned bridge adjacent to the Ambassador Bridge. The new bridge will provide an alternative for handling capacity for the next 125 years while reducing delays and their associated substantial costs. The expected cost of the project is estimated to be $3.5 to $4 million. The Buy America legislation will not be applicable to the project. All iron and steel required for construction will be produced in either Canada or the U.S.

Binational planning

In 2013, the first joint Canada-U.S. Border Infrastructure Investment Plan (BIIP) initiative was developed to realize a 2011 commitment under the Beyond the Border Action Plan. The Beyond the Border Plan’s agenda is to secure the economic competiveness of both Canada and the U.S. while promoting border security and facilitating the movement of goods, services and people across a shared border. The BIIP is a testament to both nations’ collaboration in ensuring modern enhanced security at border crossings that will allow the efficient flow of goods while increasing trade, creating jobs and reducing border delays. The modernization of major border crossings will also reduce greenhouse gas emissions and decrease fuel consumption.

Josianne explains that the $127 million investment under the BIIP Plan will modernize facilities at four of Canada’s ports of entry – Lacolle, Quebec; Lansdowne, Ontario at Thousand Islands Bridge; Emerson, Manitoba; and North Portal, Saskatchewan. Both the Beyond the Border Action Plan and the Border Infrastructure Investment Plan will improve trusted trader programs and border crossing infrastructure. “Under the Beyond the Border Action Plan the governments of Canada and the U.S. have brought in initiatives on border infrastructure, technology and security aimed at facilitating trade and travel,” explains Josianne.

Additionally, in 2013, the Canadian government introduced Phase I of the truck cargo pre-inspection pilot project at the Pacific Highway border crossing between Surrey, B.C. and Blaine, Washington.

On February 2014, Phase II of the project was launched at the Peace Bridge crossing between Fort Erie, Ontario and Buffalo, New York. This pilot project is part of the Beyond the Border Action Plan hoping to address better management of a shared border while maintaining security and alleviating congestion of truck traffic. Josianne shares that the project will “better manage our shared border and improve economic opportunities for Canadian manufacturers and their U.S. based supply chain partners.”

The rising cost of doing business

U.S. border crossing regulations have continuously evolved, particularly following the 9/11 attacks, meaning that some Canadian trucking firms and drivers are struggling to comply with transborder security. “Based on analysis by the Government of Canada, the total gross cost in 2010 of transborder security related procedures to the Canadian trucking industry was $603 million,” says Josianne. “That’s $351 million due to U.S. procedures and $252 million to Canadian procedures. The largest cost component was truck delays at the border which accounted for over 60 percent of total costs.”

She adds that other major cost contributors were security-related installations (11 percent); shipping document preparation and submission (8 percent); user fees (6 percent); and training (6 percent). Josianne notes that, “These statistics reflect procedures in place at the end of 2010 and do not consider initiatives brought in under the Beyond the Border Action Plan.”

It’s been suggested that due to the administrative complexities of new security measures, some smaller Canadian trucking firms are opting out of the transborder market. Some drivers as well are reluctant to border cross due to the possibility of fines for non-compliance with security regulations and security measures that create delays and disrupt driver time.

Safety and security

The Free and Secure Trade program (FAST), is a binational program between Canada Border Services Agency (CBSA) and U.S. Customs and Border Protection (CBP). This voluntary program enables the CBSA to work in conjunction with the private sector in enhancing security measures so that cross-border shipments are simpler and experience fewer delays.

Those who have a FAST membership card may use this documentation as opposed to a passport when entering the U.S. Drivers, importers and carriers participating in the FAST program undergo a risk assessment; those that are FAST approved are identified as low risk. Approved carriers using registered drivers are cleared in to the U.S. more readily with higher levels of certainty enabling reduced costs. To date, three border crossings are FAST available including Windsor, Ontario – Detroit, Michigan; Sarnia, Ontario – Port Huron, Michigan and at Surrey, British Columbia – Blaine, Washington.

Additionally, the Customs-Trade Partnership Against Terrorism (C-TPAT) program works with businesses in ensuring the integrity of business partners and their supply chain and is not limited to large importers / exporters but SMEs as well. Companies holding C-TPAT certification possess a documented process that alleviates risks. Like FAST, a C-TPAT certification is seen as being low risk resulting in fewer time consuming customs examinations with specific reporting lanes at the border.

Concluding, Josianne acknowledges that “The Government of Canada is committed to ensure the efficient flow of goods and people between Canada and the rest of the world, including the U.S., and takes its responsibility for a safe border very seriously.”

July 21, 2018, 3:21 AM EDT

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