OTTAWA, Ont. — A study released yesterday by Transport Canada points to the significant cost implications of post 9/11 border security measures on the trucking industry. The study, entitled “The Cumulative Impact of U.S. Import Compliance Programs at the Canada/U.S. Land Border on the Canadian Trucking Industry,” developed a mid-range estimate of $290 million per year on Canadian trucking companies to comply with new U.S. import compliance programs.
“It comes as no surprise to anyone in the trucking industry” said Canadian Trucking Alliance CEO, David Bradley. “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, in which CTA participated as a member of the steering committee, validates much of what industry leaders have been saying over the past couple of years.”
The study, prepared for Transport Canada by DAMF Consultants and L-P Tardif and Associates, suggested cost increases are being driven by various factors, including:
-Border wait and processing time
-Compliance costs for driver participation in the FAST program
-Physical security measures adopted in order to qualify for the Customs – Trade Partnership Against Terrorism
-Driver training and border crossing bonuses
-Administrative costs, particularly those associated with advance reporting requirements
In response to increased border security costs, it is becoming increasingly common for carriers to impose security surcharges for U.S. bound shipments. While some shippers have resisted payments of this type, Bradley believes the shipping community is beginning to accept that security costs are real, and that surcharges to pay for them are a necessary cost of doing business.
“When carriers first began to request security surcharges, shippers quite rightly demanded that carriers prove their costs had actually increased. One could not have expected anything less. This study provides a good overview of the reasons why carriers are adopting this course,” he said.
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