With cross-border trucking frustrations at an all-time high, carriers are feeling the need for a unified national voice. The Canadian Trucking Alliance's new chairman - MacKinnon CEO Evan MacKinnon, j...
With cross-border trucking frustrations at an all-time high, carriers are feeling the need for a unified national voice. The Canadian Trucking Alliance’s new chairman – MacKinnon CEO Evan MacKinnon, just may be the ticket.
In an exclusive interview with Truck News, MacKinnon outlined the national organization’s struggle with U.S. Customs’ latest pre-notification scheme and what the after effects might be for transborder carriers. The following is the first of a two-part series:
TN: You’ve served on the board of the Canadian Trucking Alliance for about 10 years now and you were part of the association’s restructuring. In your view how is this association better meeting the needs of its members today than it was a decade ago?
MacKinnon: There are a couple of things that have happened that have had a big effect. In the form of an alliance, each provincial association plays a bigger role in the alliance today than it did in the previous association.
Today the alliance is led by the issues that are important to the provincial associations rather than simply to the leader of the association. It’s a better representation of industry issues.
There have also been a lot of changes in the ranks of provincial association managers, starting about five years ago. The managers in place today are very professional when they come to the table of CTA.
The communication between the seven provincial managers is good today and their ability to make decisions on behalf of their own associations has improved the CTA’s response time on critical issues.
They are there to not only represent their association provincially but to also make decisions nationally.
Today the issues that are brought to the table are issues that benefit carriers Canada-wide.
I’m also very confident in the staff that exists at the CTA today. Our staff although not large, is mighty.
Our staff offers a variety of skill sets that suits the current needs of the alliance very well.
In my chairmanship I want to ensure we continue to be strong in these areas, as it has increased the productivity of the alliance immensely.
TN: Speaking of issues, now that you are the chairman, what would you like to see the CTA tackle?
MacKinnon: The border is the number one issue right now – how we are going to keep trucks moving efficiently across the border without extensive delays.
We are putting out a lot of fires right now.
What used to be priority issues before Sept. 11 and what are priority issues today is completely different.
TN: There are many carriers, of course, who are not part of the CTA or any provincial trucking association. What would you like to say to those carriers? Why should they be involved, particularly at a time when many are watching their expenses?
MacKinnon: A lot of the benefits that the alliance and the associations work for and lobby for on behalf of members do go out evenly to the trucking industry as a whole. So companies often share equally in those benefits regardless of whether they are members. But there are many benefits to membership, such as having an opportunity to speak your piece and have a say in the direction the association is going and which issues take priority.
Also, by being a member you have more information and you have it in a more timely fashion. My own company recently saved a substantial amount of money as a result of CTA’s successful efforts in lobbying for reduced state franchise tax.
Those savings will pay our CTA dues for several years to come. Of course the networking contacts and business relationships developed through association membership are an added bonus.
Being an active member of a trade association is really an investment in the future longevity of the industry you are in.
TN: Let’s speak about the border. About 270 carriers have been approved so far by the U.S. for the FAST program. There are another 100 or so on the Canadian side with more up for approval. Yet only 90 Canadian importers have applied, and only two have been approved at the time of this interview. Are you surprised with how slow shippers are moving in attaining approval for this border program?
MacKinnon: I’m not surprised, but I’m disappointed that the shipping industry has not got on board quicker. The negative impact at the border has been relatively mildly felt by the shipping industry. That’s the only reason I can see they have not jumped on board.
There have been very few carriers who to this point have put in any kind of additional surcharges for excess delay at the border. I think that’s going to come but right now the carrier has more than the majority of the inconvenience at the border.
The shipper’s product is getting from A to B – there has been some inconvenience to them but the majority of the cost has been borne by the carrier and we are working hard to minimize that cost.
We are looking to work for the very best customers and one of the criteria of the future is going to be whether they are FAST approved. One of the biggest issues we have in our industry is driver retention. It’s important to minimize the aggravation for the driver at the border. There were already drivers leaving the industry and now they have the hassle of waiting eight and 10 hours overnight at the border.
TN: The U.S. Customs pre-notification rules just announced by Custom and Border Security are certainly an improvement on the initial strawman proposals.
What’s the CTA’s position on the proposed rules?
MacKinnon: CTA was a member of the trucking working group that provided recommendations to U.S. Customs and Border Protection (CBP) following introduction of the strawman proposals.
The initial proposals were terrible and would have destroyed JIT shipping.
The new proposals are a lot more favorable and manageable.
They certainly provide further reason to get on board with FAST. However, this is still an enormous undertaking and there will be lots of bugs to work out and many carriers will have to spend more, some a lot more, to get their systems up to speed. But, we knew there would be some sort of pre-notification; it’s the world we live in now.
The latest proposals are lot easier to deal with.
TN: Are you satisfied with how the discussions with U.S. Customs progressed? Are they listening to trucking industry concerns?
MacKinnon: The CTA has done an exceptional job dealing with U.S. Customs. Right now, if U.S. Customs wants information on Canadian security border issues they contact CTA rather than the Canadian government.
CTA has spent a lot of time in Washington and has made significant headway.
CTA is very well respected in Washington.
TN: At this point is the CTA decided on any changes it would like to request during the 30-day comment period?
MacKinnon: We’re working on that now. We are consulting with our industry experts and with our U.S. legal advisors and with our partner associations in Canada and the U.S.
TN: The half-hour to one-hour pre-notification is a marked departure from the four hours pre-notification Customs and Border Security originally suggested for truck shipments. In your view, what helped change their mind?
MacKinnon: Carriers and shippers on both sides of the border were unanimous in their total opposition to the strawman proposals. Also, I have to think that there are still people, in fact I know there are people, in the U.S. government who are concerned about the economy and want to make sure that security doesn’t unnecessarily impede trade.
At some point that reality sets in.
TN: I understand up to 60 per cent of shipments arriving at the border come with paper documents.
Pre-notification will require electronic filing of documentation. Can you comment on the impact this will have on the industry, and in particular smaller carriers?
MacKinnon: Small or large carriers that are working for any of the major multinational shippers or 3PLs likely are already into EDI and while there will no doubt be some additional systems work that needs to be done.They should be able to manage it.
Although this is not a great time in the industry to be
asking anyone to spend more money. Clearly carriers that are not up to speed technologically, whatever their size, are going to have a tough time. Some of them may have to think about whether they wish to continue to try and compete in the transborder market.
This obviously will be a hard decision for some of those carriers and no doubt it will be painful. But these programs must apply to everyone in order to have a level playing field.
If at the end of the day, some are forced or decide to leave that market, those that are able to comply will see it as an opportunity to pick up some business. It is survival of the fittest in the market. CTA’s role should be to make sure the rules are as efficient and based on common sense as possible.
After that it is the carriers’ responsibility to comply and live with the rules.
TN: Efficiency at the border goes beyond the programs that help speed shipments through. The infrastructure must also be there. Ottawa has ponied up some significant funds of late – what’s your assessment of Ottawa’s endeavors on setting up the border with a proper infrastructure?
MacKinnon: It has been slow coming. It’s a fair sum of money they have allotted to it. If facilities are to be built they also have to be manned by U.S. Customs, so it has to be done in conjunction with American Customs.
One of the CTA’s biggest struggles appears to be not just convincing the public but convincing the Canadian government of how significant trucking is in the movement of the economy.
In Ontario there are three border points across which 70 per cent to 80 per cent of the Canadian economy moves over.