The face of North American for-hire trucking is being permanently altered, Canadian carriers say as they struggle to comply with a myriad of ever-changing U.S. border-crossing regulations.

That outlook, as well as many other opinions among Canadian truckers, is highlighted in a new Transport Canada study released this past fall, which for the first time since the terrorist attacks of 9-11 attempts to quantify what it costs truckers on this side of the 49th to haul freight across the border.

The study — entitled “The Cumulative Impact of U.S. Import Compliance Programs at the Canada/U.S. Land Border on the Canadian Trucking Industry”– estimates that increasing U.S. security and customs requirements is costing Canadian carriers and owner-ops around $290 million per year, and drivers another
$5 million out-of-pocket.

The study measured the impact of the increasing and sometimes arbitrary, regulations by surveying trucking industry segments; mainly for-hire carriers, but also some private carriers, owner-operators, and a handful of shippers and other stakeholders.

By analyzing the cost impact of customs and security programs such as Advanced Electronic Presentation of Cargo Information; Customs-Trade Partnership Against Terrorism (C-TPAT); Free and Secure Trade (FAST); United States Food and Drug Administration (FDA) prior notice arrival; Transportation of Dangerous Goods; and the upcoming Automated Commercial Environment (ACE) Program, Transport Canada estimates the Canadian trucking industry’s compliance bill totals anywhere between $179 million to $406 million this year.

A mid-range number would be in the order of $290 million per year, Transport Canada guesses. Driver costs due to the U.S. border security measures are at a minimum $3.4 million/annum to a maximum of $6.8 million.

“It comes as no surprise to anyone in the trucking industry,” said David Bradley, CEO of the Canadian Trucking Alliance, which was part of the report’s steering committee. “The industry has worked hard and made significant adjustments to comply with requirements under U.S. laws such as the Patriot Act, Trade Act, and Bioterrorism Act. But there is a cost to higher security, and this study validates much of what industry leaders have been saying over the past couple of years.”

Close to 60 percent of the for-hire carriers in the sample felt that U.S. security measures were causing some structural change to the Canadian and North American trucking industry.

The majority of the comments mentioned that smaller Canadian carriers were to some extent leaving the transborder market due to the administrative complexities of the new security measures that they faced. According to respondents, larger Canadian carriers for the most part were taking over this traffic.

The study also states that Canadian carriers complying with the rules have yet to perceive any concrete benefits from U.S. clearance programs they’ve been applying for. “There is some light at the end of the tunnel but a number of challenges must be overcome before these benefits become material,” the study notes.

No kidding. Ret Tinning, sales manger for specialized container carrier Berry & Smith Trucking in Penticton, B.C., says that right now that light is pretty dim.

“It’s definitely still a work in progress,” he says of border clearance programs such as FAST four years after they were first created. He told Today’s Trucking that a serious lack of FAST-approved shippers are hindering the ability of Canadian carriers to take advantage of potential benefits from the US security regime.

In fact, a separate, recently published study commissioned by FedEx Express Canada, states that despite the wide-scale promotion of FAST, only 38 percent of companies that export goods to the U.S. know anything about the binational border clearance program which requires the driver, carrier, and shipper to undergo background checks in exchange for what’s supposed to be expedited customs clearance.

However, perhaps the most alarming effect as described by practically all carriers questioned in the survey, is the opinion that U.S. security measures are exasperating the qualified driver shortage for transborder lanes.

“There is a general reluctance for many drivers to cross the border due to the U.S. security measures [e.g., the potential for fines if noncompliant, and delays at the border that cut into driving time]. The long-haul nature of many U.S. routes also has quality-of -life implications for many drivers who wish to remain closer to home for family reasons,” the study states.

Furthermore, several owner-operators also indicated they were very emphatic in their intention to get out of the transborder business. The main reasons given were: The costs related to becoming FAST approved; the private information that had to be submitted to become FAST approved; and receiving no compensation by carriers for increased costs due to FAST and/or for increased delays at the border.

“Surely, anecdotally at least, you hear about certain drivers that don’t want to cross the border anymore. I can’t see the border [issue] making the driver situation any better,” says Ron Lennox, vice-president of trade and security at the CTA. “If you look at the trade magazines, you’ll see [recruitment ads] that say ‘no U.S.’ or ‘no border crossing.’ So what does that mean when you have recruiters using that as a selling point? It sure says something about crossing the border these days.”

Tinning appreciates the attempt to analyze border-crossing issues from a monetary perspective, but quickly adds that the true cost will likely never be realized. He says there are so many miscellaneous expenses involved in crossing the border — including the actual cost of quantifying your costs to get surcharges from customers — that carriers can’t expect to recoup every dime.

Ironically, however, more than a few carriers have benefited from the stranglehold U.S. regulations have put on some of their competitors, says Tinning.

In a sense, U.S. Customs is acting as a gatekeeper in more than one way. “You can’t pick and choose these costs, so in a way it levels the playing field,” he says. “Now you can’t necessarily go in and undercut the rate because these are the issues every carrier who crosses the border must deal with. It’s part of the cost of doing business today.”