OTTAWA, ON — So it begins. The North American Free Trade Agreement that governs every load of freight crossing the Canada-U.S. border is now formally being renegotiated.
In the midst of talk about tariffs and taxes, however, regulators are also looking for ways to streamline the crossings themselves. The U.S. goals include automating import, export and transit processes; reducing related documents and formalities; harmonizing customs data requirements; and advancing rulings about the way goods will be treated when imported.
There’s clearly room to improve. A 15-member industry coalition including the Canadian Trucking Alliance (CTA) recently complained about the lack of resources for border staffing and IT systems, and called for more Canada Border Services Agency funding.
Ralph Goodale, minister of public safety and emergency preparedness, admitted in a formal response that “a number of older” IT systems have hurt the supply chain. The Canada Border Services Agency has even begun reviewing – and in some cases refunding – Administrative Monetary Penalties linked to system outages, according to the alliance.
For its part, Canada’s largest trucking association has sent Global Affairs Canada a list of border issues that could be tackled in the trade talks. In-transit truck moves, cargo pre-clearance, government investment at ports of entry, harmonization of security programs, the trend in rising cross-border fees, the movement of food products and related inspections, and e-commerce were among them.
“Many of the comments by the carrier community contained in our submission are longstanding issues that have been impeding cross-border trade,” alliance president Stephen Laskowski said in a release. “CTA is eager to work with Ottawa, Washington, and the business communities on both sides of the -border to try and resolve these issues for the betterment of the economies in the U.S. and Canada.”
Topics on the wish list include:
Existing cabotage rules govern how foreign motor carriers reposition trailers. “This is inconsistent with modern-day logistics practices,” the alliance brief reads, noting how shippers, receivers and freight forwarders control when freight is loaded and unloaded. “Motor carriers must therefore maintain larger trailer pools, allowing them to drop off a loaded trailer at the consignee so the driver and truck don’t need to wait.” Echoing a call from the American Trucking Associations, CTA wants foreign drivers to be able to reposition empty foreign trailers as part of international commerce.
In-transit shipments – the domestic freight that takes a shortcut through a foreign country – essentially came to an end when Automated Commercial Environment (ACE) e-Manifests were introduced in 2006. Moves once allowed with no more than some manifest information now required full commercial information. But U.S. Customs and Border Protection has since 2016 been running a pilot project that allows nine qualifying carrier to run in-transit through the U.S. and selected ports. The alliance wants the program to become a permanent fixture.
Cargo pre-clearance vs. pre-inspection
While Canada and U.S. governments deemed a 2013 B.C. pilot project testing pre-clearance systems to be a success, the alliance says it delayed truck traffic and created longer lineups. A second test at the Peace Bridge in Fort Erie, Ontario, saw pre-inspected trucks processed 30 seconds faster per truck, when pre-inspection booths were limited to trucks with transponders.
“CTA has regularly cautioned against any initiative that would see trucks — particularly FAST-qualifying trucks — stopped twice… where currently there is only one stop,” the submission notes, referring to the Free and Secure Trade program. So it calls for “true pre-clearance” where selected group of trucks are allowed to bypass a border stop altogether.
“Both US CBP and CBSA have seen their resources decrease significantly over the last several years, leading the agencies to search for efficiencies through automation, the use of advanced technology, and biometrics. This shift, although it’s the way of the future, must be reconciled with the need for frontline officers to process trade in the present day,” the alliance says.
It isn’t the only department to face limited resources. Consider the challenges that U.S. Department of Agriculture faces when clearing shipments of food and meat. At the crossing with Pembina, North Dakota, only limited staff is available on Saturdays, and there are no inspections on Sundays. In Blaine, Washington, the offices are closed for inspections between 11 p.m. Friday and 7 a.m. Monday.
Requirements and processes for Customs Self-Assessment (CSA) and the Customs-Trade Partnership Against Terrorism (C-TPAT) overlap and could be streamlined, the alliance says. And it is calling for the Commercial Driver Registration Program (CDRP) to be wound down since that program allows drivers access to FAST lanes without the same intense background checks and security clearance needed to get a FAST card. There are about 1,745 CDRP card holders, and 1,330 also have FAST cards.
Rising fees referenced in the brief included U.S. Custom decals, off-load charges at the border, Administrative Monetary Penalties, and U.S. Customs and Border Protection penalties. Specifically, the alliance calls for a review of the Animal Plant and Health Inspection Service (APHIS) fees, which have been proposed to increase to US $8 per crossing — a jump of 52%. Related transponder costs would more than double.
These APHIS fees contravene the existing trade deal, are a tax on all U.S.-Canada trade, and are being imposed on the wrong party, simply because it’s easier to go after the truck than the owner of the product, the alliance observes. So too were these fees said to be a barrier to legitimate trade, lack the application of resources to assess risks, and exempts bus passengers, pedestrians and private aircraft just because there are no means to collect.
“The abundance of fees and penalties are detrimental to carriers hauling goods across the border, which is being passed down to the consumer,” the brief concludes. “Administrative burdens as well as additional costs and risks can also deter some carriers from transporting cross-border goods.”
The alliance is asking for Canada and the U.S. to use the same carrier codes, review the need for vehicle repair controls, have Canadian e-Manifests be accepted by the Customs and Border Protection as an export manifest, and have a single bond that can be used across North America.