Every year at this time I get to speak to the people in charge of some of the best transportation and logistics service suppliers in Canada. It’s part of our Award Winning Suppliers issue in Canadian Transportation & Logistics and it’s always a learning experience as I get to discuss pressing issues with these leaders.
Much of the discussion this year focused on the economic situation – how it’s affecting suppliers’ ability to offer services, how it will change the industry and the shipper-carrier industry. But there was one issue we haven’t heard much of late that really caught my attention: transborder trade and changes at the border.
Although the border is not making headlines the way it used to a few years ago when long lineups were the norm, the reality is there are some funny things going on. It would be fair to say things are not as they seem. For example, as Robert Murray of MSM Transportation pointed out, the transborder business has been on the decline since about the fourth quarter of 2006. Yet the statistics don’t bear that out. The rising value of energy exports from Western Canada for much of 2007 and 2008 served to mask the consistently declining volumes of exports from the manufacturing sector in Central Canada. While to many politicians an export is an export, the reality for motor carriers, and those based in Central Canada in particular, is that the demise of manufacturing exports is a serious issue that requires addressing.
The other mirage at the border is that more than 7 years after 9/11 and the myriad of security programs that were spawned, it is actually getting easier to cross it. Certainly the extended border delays that frazzled the nerves of transborder truckers for years have eased. But, as the Canadian Trucking Alliance (CTA) pointed out when it recently appeared before the House of Commons Standing Committee on International Trade, this should not be taken as any indication that all is now running smoothly. All it shows is a temporary reprieve caused by the drop in truck traffic crossing the border. The problems that have thickened the border in recent years – inconsistency between US and Canadian regulations, border guard staffing issues and inadequate infrastructure – have not been solved. In fact, CTA argues that despite the drastic drop-off in volumes, border processing times have barely changed at all.
When the North American economy eventually recovers, the problems that plagued motor carriers and their exporter customers will quickly rise to the surface and will do so at a time when we can least afford any obstacles to what may prove to be a fragile recovery for our beleaguered manufacturing sector.
And things could get worse if legislation currently being considered by our own government is adopted. The Canadian Border Services Agency is proposing to turn back trucks if the importer data has not yet been received before the truck arrived at the border. The truck would no longer be moved in-bond to an inland facility for clearance.
What should be done? A huge part of the problem at the border stems from the fact there are too many government agencies involved in setting legislation. As David Bradley, the head of the CTA, points out it can be a challenge just to find out who’s who and to get the different people working together. CTA’s recommendation to create a cabinet committee on the border and/or a specific ministerial or senior bureaucratic position with authority for all aspects of the border is a sound one and deserves consideration.
With more than 25 years of experience reporting on transportation issues, Lou is one of the more recognizable personalities in the industry. An award-winning writer well known for his insightful writing and meticulous market analysis, he is a leading authority on industry trends and statistics. All posts by Lou Smyrlis