Challenges mount for cross-border shipments
Security, costs continue to increase, panelists say
Published: January 12, 2010, 12:30 am
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Getting goods across the U. S.-Canadian border will remain difficult and probably will get more expensive, a panel of business experts agreed Monday, as governments continue to put security ahead of commerce and a post-recession shakeout in the shipping business leads to higher costs.
But learning to mitigate, negotiate and simply deal with all of that is crucial for Buffalo Niagara, panelists said, as the area’s status as a logistical nexus between regions, nations and giant commercial centers remains key to the area’s economic future. The event, held at the Shea's Smith Theater on Main Street in Buffalo was sponsored by the Buffalo Niagara Partnership, World Trade Center Buffalo Niagara and the Council for Supply Chain Professionals.
Panel moderator Jack Ampuja, a consultant and teacher of supply chain management at Niagara University, said Buffalo’s strategic location between the Midwest and the East Coast, which made it a commercial giant a century ago, hasn’t changed.
If anything, he said, the situation has been enhanced by the fact that the city is also a key link between New York City and Toronto, the two nations’ largest commercial centers, while Ontario’s Golden Horseshoe, which includes Toronto, Hamilton and Niagara Falls, is the fifth largest commercial center in North America.
But Ampuja and three panelists who work in the shipping business agreed that the added costs of moving goods around will pose a major hurdle to capitalizing on those assets. Not only do ever-stricter and often confusing border-crossing rules add to the costs, but also a smaller number of shipping companies operating reduced fleets of vehicles will end those shippers’ willingness to run at low, or even negative, profit margins.
“Be prepared for some sticker shock,” agreed Mike Diati, vice president of Speed Global Services, a Buffalo-based logistics firm that arranges shipping and customs processing for businesses moving their products around the world.
The recent recession was only the worst of 10 years of declining demand for the services of shipping companies’ trucks, aircraft and ships, Ampuja said, leading many to go out of business or pull out of certain markets.
“This recession is a little bit different,” Ampuja said. “The trucks haven’t just been parked. They’re gone.”
The trucks that remain in the cross-border shipping business, the panelists agreed, will have to be driven, owned and hired by people who pay attention to detail and allow the time and money necessary to comply with all regulations — however maddening that might be.
“If you are inefficient, you are going to pay for it,” Ampuja warned manufacturers who ship their goods across the border. “The carrier isn’t.”
The other major hurdle to cross-border commerce remains the continuing, and often conflicting, efforts of the U. S. and Canadian governments to beef up security. The two governments’ apparent failure to agree even on what to call their efforts, much less on how they should be carried out, has led some shippers to tear their hair.
“The left hand doesn’t seem to know what the right hand is doing,” said Robert Rich, president of Buffalo-based ROAR Logistics. “How are we supposed to defend our borders if we can’t get our computers to speak to each other?”
Larry Fontaine, owner of Fontaine Transport, a trucking company from Port Colborne, Ont., explained how going to the trouble of getting his drivers certified with both nations’ security protocols doesn’t help very much if the company sending the goods from one side of the border and the company that ordered them on the other have not fulfilled all their responsibilities.
Still, the pros agreed, those in the shipping business, and those who depend on its services, should do all they can to work with the relevant officials of both governments, make themselves known and develop a reputation for being trustworthy.
Ampuja also emphasized that Buffalo needs the companion span of the Peace Bridge to be built as soon as possible, as it will be sorely needed when a recovered economy pushes traffic higher.
“We need that new bridge,” he said. “We should be supporting that every which way possible.”
gpyle@buffnews.com
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