In my last column I made the case for the dire need to ensure that we maintain open and efficient access to the U.S. market.Considering its importance to the health of our economy, addressing border i...
In my last column I made the case for the dire need to ensure that we maintain open and efficient access to the U.S. market.
Considering its importance to the health of our economy, addressing border issues should be a top priority.
This month I would like to take a closer look at how we can “fix the border.”
For many years Canadian governments at all levels ignored or were unwilling to take responsibility for the infrastructure needed to support the explosion in trade that occurred as a result of NAFTA.
Perhaps the most obvious example is in the city of Windsor, Ont.
A full 25 per cent of the Canada-U.S. truck volumes are handled at Windsor.
Thirty four per cent of all Canada-U.S. trade crosses at Windsor-Detroit.
The last nine kilometres from Highway 401 to the Ambassador Bridge, however, are not a freeway but a municipal road – the infamous Huron Church Road.
You can take a truck from Toronto to Miami and you will go through 16 stoplights; 15 of them are in Windsor.
At the end of May, after years of neglect and months of wrangling over details for a medium term plan to help alleviate some of the problems in Windsor, the Government of Canada and the Province of Ontario announced a $300 million plan to begin the process of fixing the problems in Windsor.
While real relief is some years away, the trucking industry enthusiastically welcomes the plan.
We can’t change history.
How things were allowed to get to the state they have in Windsor is unconscionable.
But, we believe that what has been decided by the two senior levels of government is a good platform for moving forward.
Moreover, the announcement in Windsor capped off a series of strategic investments recently announced for most of the major border crossings.
Governments are coming to grips with how important our borders are.
Now it’s time for the private sector proponents to come to the table and build new connections to the border.
I challenge them to get on with the job.
But it is also important to note that the border does not begin and end in the border cities and towns.
The border is part of a system; it is wherever goods are picked-up or delivered.
A delay in Toronto can just as easily impede a just-in-time shipment to Michigan as delay a just-in-time shipment from Michigan to an assembly line in Oshawa.
Nevertheless, Canada remains the only major industrialized country on the planet NOT to have a national highway policy.
For a country as dependent upon trade and highways, this is very concerning.
The recent “selective and strategic” infrastructure investments are welcome and advised but they are not indicative of a national highway policy.
This is in stark contrast to the United States, for example, where virtually all federal gasoline and diesel fuel tax revenues are put back into the interstate highway system.
Bilateral & Better Border Management Systems
For years, the Canadian and U.S. customs agencies operated separately from each other.
For reasons that are apparent when you consider Canada’s need to trade, Canada Customs focused on trade facilitation.
The U.S. Customs Service, on the other hand, focused primarily on national security and enforcement.
Of course, if we didn’t know why before, we do now.
The challenge since September 11th is how to achieve the twin goal of enhanced security while at the same time improving trade efficiency.
Accomplishing this requires a bilateral approach, with border management systems that both countries buy into, that are co-ordinated and just as importantly, that are effective.
And, real progress has been made.
The Smart Border Declaration, signed in December 2002 by Canadian Deputy Prime Minister John Manley and U.S. Secretary of Homeland Security Tom Ridge, is testament to that.
In our view, the single most significant result of the Smart Border declaration to date has been the introduction of the important Free & Secure Trade (FAST) program.
There have been – as should be expected – some growing pains associated with FAST.
Not all the border crossings are fully operational.
There are problems at some of the crossings in accommodating dedicated FAST lanes, which has caused some carriers to question the benefit of joining the program.
LTL shipments, which mix several customers’ freight, present particular challenges.
But, the message from the customs agencies on both sides of the border is clear – become a member of FAST, or you will sit and wait.
But the broader trade community also needs to get with the program.
Shippers must also get on-board with FAST
It defeats the purpose to have a FAST-approved carrier, with a FAST-approved driver, forced to sit in the slow lane at the border because the truck is delivering non-FAST goods from a non-FAST shipper.
The uptake by exporters and importers needs to be increased.
The costs of border delays cannot and should not be borne by a carrier that has joined FAST and has made the necessary investments in security under the U.S. Customs Trade Partnership Against Terrorism (C-TPAT) or the Canadian Partners in Protection (PIP) programs.
We are beginning to see carriers charging shippers for these delays either through security surcharges, as ancillary costs, or through differential rates for FAST and Non-FAST customers.
We must remain vigilant.
There are still a lot of areas in the 30 point action plan where work needs to be done.
Reverse inspections are one example.
Numerous other measures have been proclaimed or proposed which could, depending on how they are implemented, denigrate or scupper the gains made as a result of the Smart Border Declaration.
The list includes such measures as mandatory EDI pre-notification of all land shipments into and out of the United States.
Prenotification is on the way
While objections from the trade community on both sides of the border led to the withdrawal of the Homeland Security Department’s so-called “straw-man” proposals, the fact is there will be some form of pre-notification before the year is out.
As Canadians we must remind ourselves that Canada is rarely on the radar screen in Washington at the best of times.
However, some recent examples in the security arena underscore this.
Earlier this year, new rules were introduced that provided two weeks notice that aliens (including Canadians) would be banned from hauling explosives into the U.S.
No one considered that this was a $300 million business between Canada and the U.S. and that there were Canadian carriers and truck drivers that had already been involved in this activity for years.
It was only after considerable effort on the part of industry and government on both sides of the border that Canadian truckers were granted a reprieve.
Next was the announcement of a Transportation Worker Identity Card.
At some point, it is estimated that 20 million transportation workers in the U.S. will require this card.
The problem for us is no one apparently gave thought as to whether or how a Canadian truck driver would be required to apply for a TWIC card.
And recently a requirement has been introduced that calls for drivers wishing to haul hazardous materials in the U.S. to have a HAZMAT endorsement on their commercial drivers’ licences signifying they have passed a security background check.
Canadian truck drivers were granted a reprieve because there is no mechanism or requirement for hazmat endorsements on Canadian commercial drivers’ licences.
However, we fully expect that this reprieve will be very short-lived.
The question is how will Canadians comply if that’s the case?
Again, we think the answer might reside with the FAST program.
We are encouraging both the Canadian and U.S. governments to use the FAST program as the platform for satisfying as many of these other security measures as possible.
It just seems to make sense.
No one wants to end up carrying a wallet the size of a filing cabinet around like George Costanza of Seinfeld fame.
third requirement for “fixing the border” is that we maintain good political relations between the world’s two major trading partners.
We are each other’s best customer.
But, the relationship between Canada and the United States transcends matters of business, trade and economics.
We are tied by the bonds of history, geography and shared values.
We are certainly each other’s best friend.
– David Bradley is president of the Ontario Trucking Association, chief executive officer of the Canadian Trucking Alliance, and a trucking industry lobby leader.