Has your Company Mastered Cross-Border Trade between Canada and the United States?

The North American Free Trade Agreement (NAFTA) is celebrating its 20th anniversary in 2014. Since the enactment of NAFTA in 1994, trade between the United States, Canada and Mexico has increased almost 200 percent to an estimated $930 billion. The cross-border flow of goods between the U.S. and Canada has grown to $400 billion.

A new U.S. Transportation Department report shows three of the five surface transportation modes, truck, rail and pipeline, carried more U.S. trade with North American Free Trade Agreement partners Canada and Mexico by value in 2013 than compared to the year before. Most U.S.- Canada trade in 2013, 83.6%, was carried on the surface modes of truck, rail and pipeline. Trucks carried 54.4%, followed by rail at 16.7%, pipeline at 12.6%, vessel at 5.7% and air at 4.5%.

Michigan led all states in trade with Canada in 2013 with $74.6 billion. Of the top 10 states for U.S.-Canada trade in 2013, Washington had the highest percent change over 2012, a 6.4% increase. The top commodity category transported between the U.S. and Canada in 2013 was mineral fuels, valued at $134.1 billion, with $79.2 billion or 59.1% moved by pipelines. The next highest commodity category transported by a single mode in U.S.- Canada trade was vehicles and vehicle parts (other than railway vehicles and parts) with $66.1 billion in trade moved by trucks. Cross-border trade via truck and rail continues to show positive trade growth for Canada and the United States. The growth continues as freight transportation providers on both sides of the border strengthen their relationships with cross-border shippers.

Transforming words and good intentions into more concrete and long-term action, both the United States and Canada are promoting greater economic growth and jobs through a stronger, more visible commitment to regulatory cooperation. With greater opportunities for growth on the horizon, trucking companies on both sides of the border have bolstered their cross-border service offerings to accommodate trade. While Canada and the United States have been good friends for many years and have the longest unpatrolled border in the world, they are distinctly different countries. The two countries have different geographies, climates, cultures, currencies, populations, laws and transportation systems. A failure to understand the unique features of each country can lead to fines, service problems and unhappy customers.

As an example, Canadian e-Commerce is expected to grow at a double-digit pace over the next few years, and U.S. businesses are increasingly tapping in to that $32 billion annual market. But the not-so-good news is that businesses are bumping into unexpected challenges in transporting those goods from the U.S. to their Canadian consumers. A new research brief, “Canadian e-Commerce Presents New Opportunities for U.S. Businesses,” details those challenges, and also highlights ways in which U.S. businesses are overcoming those obstacles. The research brief details findings of a study conducted by Peerless Research Group in which supply chain managers were queried about issues with U.S./Canada e-Commerce shipping.

Among the survey findings, almost 60 percent of respondents said they have had shipments delayed at the border due to incomplete paperwork, while almost 40 percent have had to reconfigure their packaging or labeling to comply with Canadian federal or provincial requirements. One survey respondent remarked that: “Delays at the border have increased our costs by driving up man hours and payroll due to service disruptions.” The survey also highlights issues that are “uniquely Canadian,” including delivery obstacles caused by the vastness of the country’s geography, and the fact that the country is primarily serviced by regional transportation carriers, necessitating several “handoffs” from one carrier to another, thus increasing the risk of damage and delay.

What can cross-border shippers do to improve their knowledge of NAFTA-related laws, processes and carriers? Education is a great first step. SMC3, an Atlanta-based LTL pricing resource centre will be offering a course in the Canadian freight market through its learning centre that it calls The Academy. The course will take place in Buffalo, New York on August 21, 2014. What will you learn?

Compliance & Legal Strategy

Examine the complexity of cross-border compliance and legal issues, and identify steps to build internal resources expertise, and technology to manage these critical processes efficiently and cost-effectively.

Cross-Border Regulation

Understand how the expansion of NAFTA traffic regulations have resulted in compliance and security issues that challenge transportation and logistics providers as well as shippers.

Understanding the Canadian Domestic Freight Market

Explore the often misunderstood persona of Canada's domestic freight market; its distinct geography, its sizeable population, varied climate, and diverse economy and government make it quite distinct.

NAFTA: Impact on the Canada/US Cross-Border Freight Market

Extend your knowledge of cross-border trade flows that impact head haul and back haul pricing for cross-border freight, modal options, currency challenges, and other key variables.

Customs Clearance Best Practices

Join one of North America's top 3PL experts as we explore the best practices for cross-border customs clearances and address the impact that customs delays have on your ability to effectively manage your supply chain.

Cross-Border Shipping Strategies & CTPAT

Discover the processes and procedures being implemented to foster the expedited movement of cross-border freight and hear about industry improvements

This new Academy workshop will address the unique challenges facing US-Canada cross-border transportation, as well as provide valuable insight on cross-border markets, transportation, logistics, security and compliance. Here is a link to the workshop (http://www.smc3.com/smc3/academy/workshops-cbt-ca.htm). I will have the distinct pleasure of talking about two subjects near and dear to my heart, domestic Canada and cross-border freight transportation. I look forward to seeing many of you in Buffalo for day of education and networking this summer.

To keep up to date on the latest trends in Canadian freight, obtain a free subscription to Dan’s Transportation Newspaper or sign up for the 2014 Surface Transportation Summit (www.surfacetransportationsummit.com) where attendees can meet representatives from Canadian truckers, railways and logistics service providers.