There are key differences —and similarities — that all shippers should be aware of when shipping goods across the U.S.-Canadian border.
Despite their many similarities, the logistics markets in the U.S. and Canada are actually different in a number of ways. This can confuse and frustrate shippers on either side of the U.S.-Canadian border, particularly when it comes to importing and exporting goods.
“Canada and the U.S. share the longest international border in the world, and a high percentage of Canada’s citizens are situated within 100 miles of that border,” says Craig Watson, Head of Land Transport, Canada from DB Schenker. “This and other factors make for an especially close, centuries-old trade relationship between the two countries. And while this has created a shipper-friendly logistics environment, there are also some key challenges that companies need to watch out for.”
Here are five key factors, both differences and similarities, that all shippers should be aware of before moving goods across the border:
- Transportation Infrastructure is Different
“Geographically, Canada is the second largest country in the world and it has the tenth largest economy in the world,” Transplace’s Brian Ware told Talking Logistics, adding that the U.S.’ interstate and highway infrastructure differs greatly from Canada’s single, flat highway that runs across the southern portion of the country. “About 85 percent of our population lives within 150 miles of the U.S. border. So, it’s a difficult market to serve, especially the rural areas, and most of our urban density is spread across five major cities — Toronto, Montreal, Vancouver, Calgary, and Edmonton.”
- Driver Shortages Prevail on Both Sides of the Border
According to the Canadian Trucking Alliance’s David Bradley, Canada will be short 33,000 drivers by the year 2024. In its Truck Driver Shortage Analysis 2017, the ATA calls the U.S. driver shortage “a problem for the entire supply chain,” as 70.6% of all freight tonnage is moved on the nation’s highways. “If nothing changes in the trend line by 2026, the shortage could surpass 174,000,” the ATA notes in its report. “We are not saying that the shortage will reach that level; instead, this is more of a warning to the industry and the broader supply chain of what could happen if things don’t change.”
- Both Countries are Mandating Electronic Logging Devices
As of December 17th, any commercial vehicle in the U.S. that weighs over 10,000 pounds with a model year of 2000 or newer must be equipped with an FMCSA-approved electronic logging device (ELD). This mandate represents Phase 2 of the FMSCSA’s phased-in ELD compliance requirements. The ELD ruleapplies to most motor carriers and drivers who are currently required to maintain records of duty status (RODS) per Part 395, 49 CFR 395.8(a). The rule applies to commercial buses as well as trucks, and to Canada- and Mexico-domiciled drivers. Canada’s ELD rule will adopt most of the provisions in the U.S. mandate, and is currently set to go into effect December 2019.
- Canada Lacks a Centralized Regulatory Voice for Trucking
One reason Canada is two years behind the U.S. with its ELD mandate is because, unlike in the U.S., where FDOT establishes interstate trucking regulations, individual provinces make such regulatory decisions in Canada. “With any changes that we want to make, we have to have all 10 provinces and three territories [involved],” said Bradley.“So it’s a like constitutional conference every time we try to make the slightest change to a Canadian regulation.” This has also kept Canada and the U.S. from reaching “truly North American standards” on issues such as safety features and weights and dimensions. “Canada doesn’t speak with one voice.”
- Transport of Hazardous Goods is Regulated Differently
The transportation of dangerous goods in Canada is governed by the Transportation of Dangerous Goods Act, and applicable regulations. In the U.S., the equivalent legislation is the US Department of Transportation (DOT) Code of Federal Regulations. Both require similar training requirements for persons handling and transporting dangerous goods, but there are also differences that include:
In the U.S., the Hazardous Materials Regulations (HMR) exempts dangerous goods being sent back from retail locations to distribution centers, with reverse logistics shipments by motor vehicle being exempt from the general HMR requirements. This exemption does not exist in Canada, according to Environmental Law Insights.
49 CFR only applies to hazardous materials “in commerce,” and not in private vehicles, being transported for non-commercial purposes. In contrast, the TDGA applies to anyone who handles, offers for transport, or transports dangerous goods unless exempt under a “Special Case,” Equivalency Certificate, or Special Provision, Environmental Law Insights points out.
With U.S. goods and services trade with Canada totaling nearly $674 billion last year, shippers should take the time to research the nuances of cross-border shipping and understand the key differences between the two countries’ transportation rules and infrastructure. Armed with this information, companies can make the best possible decisions — and make sure all of the I’s are dotted and T’s crossed — before sending their goods off to customers.