So, it’s not surprising that Canada, Mexico, and the United States are among each other’s top trade partners. Canada and Mexico have been one of the top three merchandise export markets for 49 states in the United States, the U.S. Chamber of Commerce reports.

“Cross-border trade with respect to Mexico, the United States, and Canada is more relevant than it ever has been. We have a stable geopolitical environment, free trade, and half a billion people between the three countries,” says David Cox, chief executive officer of Polaris Transportation Group, a provider of less-than-truckload (LTL) service between Canada and the United States, and other services. Each of the countries also boasts an educated workforce, making cross-border trade even more efficient, Cox says.

The focus on business opportunities within North America has grown over the past few years. “After 2008, we saw a lot of companies open up shop across the world, but predominantly Asia,” says Andreea Crisan, president and chief executive officer with ANDY, a provider of transportation and supply chain solutions, based in St-Laurent, Quebec.

For example, annual foreign direct investment (FDI) into China grew from around $40 billion in 2000 to $124 billion in 2011, and then growth rates dropped. In 2022, FDI into China hit about $189 billion—a massive number, but up just 4.5% from the previous year.

Rising costs for shipping, labor, and other expenses, along with the push for sustainability, have prompted companies to consider a wider range of countries when locating operations. Many organizations based in North America are assessing opportunities closer to home.

“It’s a natural transition, given all that’s going on, to come back on to the North American continent,” says Crisan. It’s also good for the planet to manufacture closer to the market for a company’s products, cutting the distance items have to be transported, she adds.

A growing number of U.S. companies are turning to nearshoring, typically in Mexico, for greater visibility, shorter delivery times, and a greater ability to influence the quality of their products, says Jose Minarro, managing director with Sunset Transportation’s Cross-Border Operations.

Mexico’s proximity to the United States, its availability of skilled labor, competitive labor costs, favorable trade conditions, and tax exemptions make it attractive for manufacturing, he adds.

The shorter transportation times are especially significant for products that are seasonal and/or time sensitive, like fashion items, says Jerry Haar, professor of international business at Florida International University. In addition, by shifting some operations from other parts of the world to Mexico, companies diversify their supply chains, lowering risk, he adds.

Boosting Nearshoring Benefits

Trade agreements between Canada, Mexico, and the United States further boost the benefits of nearshoring and cross-border trade. The most prominent, the United States Mexico-Canada Agreement (USMCA) went into effect July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). The USMCA contributes significantly to stability in rules and norms, reducing the risk to trading and investing across North America, Haar says.

The USMCA allows for a wide variety of duty-free items that can be exchanged among the United States and Mexico, Minarro says. An added benefit: Many manufacturing companies that set up shop in Mexico end up selling a portion of their production into the domestic market of approximately 130 million people, he says.

Surging Trade

“Since the inception of USMCA, trade throughout North America has experienced a surge, accompanied by a substantial uptick in investment within industries capitalizing on this opportunity,” says Rachel Honbarger, project manager with Tompkins Solutions, a provider of supply chain solutions.

In 2022, exports of U.S. goods with the USMCA were $680.8 billion, up 16% from 2021 and a 34% jump from 2012, according to the Office of the United States Trade Representative. Imports of goods through the USMCA also grew, rising 20.5% between 2021 and 2022, to total $891.3 billion.

Cross-border trade and nearshoring within North America offers companies based in Canada, Mexico, and the United States greater opportunity for profit and growth. At the same time, companies need to consider potential risks.

One is potential changes to trade agreements or policies. Even minor adjustments can profoundly affect the functionality or expenses associated with operating such a supply chain.

An example is recent efforts by some policymakers to amend aspects of Section 321, which allows many imported items to enter the United States free of duties and taxes, so long as the aggregate retail value of the products imported in one day and exempted from the payment doesn’t top $800. A slight modification to the scope of duty-free exemptions could lead to substantial shipping expenses, making nearshore distribution economically unviable, Honbarger says.

In addition, locating manufacturing operations across the border from distribution networks increases transportation expenses due to tariffs, longer travel distances, and a rise in shipment volumes to compensate for extended travel times.

Pulling Off Cross-Border Operations

Executing a cross-border operation requires complex technological integration to ensure seamless oversight and control of the entire supply chain process.

Without this, businesses face potential product loss, challenges in restocking distribution centers or meeting customer demands, and expenses stemming from inadequate visibility into operations.

Achieving the benefits of cross-border trade and nearshoring within North America—including increased profit and accelerated growth—demands an in-depth knowledge of the relevant regulations and documentation requirements to minimize the risk that shipments are held up by the authorities.

Working with a logistics provider with expertise and a commitment to this trade area is essential. “We’re in a 24-hour industry,” Cox says. Partnering with a quality broker that can support its clients around the clock cuts the chance of border mistakes and delays, he adds.

These providers can help shippers navigate trade across North America.

ANDY: High Standards and Customized Services

Supply chain solutions provider ANDY is well equipped to manage cross-border shipments, relying on its experience and expertise on the processes and requirements.

From its start with a single, burgundy-colored delivery truck, ANDY has grown into one of the 250 largest fleets in North America, as well as one of the fastest growing companies in Canada.

It also holds the distinction of being one of a handful of women-owned companies in the supply chain and transportation sector. “We try to empower women and place them in pivotal roles where they’re decision makers,” Crisan says.

At the same time, the men who are part of ANDY also contribute to its success. “Great men work here as well,” Crisan says. “It’s a diverse place. Our success boils down to our company culture.”

The culture has helped fuel ANDY’s tremendous growth since its start in 2001. That’s when Crisan and her father, Ilie Crisan, emigrated from Romania to Canada. A former bus driver, the older Crisan tried to find a job as a truck driver in Canada but was unable to. With savings running low, he purchased his own truck and got to work. “That’s how it started,” Crisan says.

Then 11 years old, Andreea Crisan has been key to ANDY’s growth. Among other responsibilities, she helped her father translate documents. “I grew in parallel with the company and so did my responsibilities,” she says.

ANDY now operates out of 15 locations across Canada, including eight terminals that are CTPAT and PIP certified, as well as a fleet of about 300 trucks and 800 trailers.

Its clients range from industrial and natural resource firms to retailers and manufacturers, and they can choose from drayage, transportation, logistics, distribution, and warehousing, and other transportation and logistics services.

Shippers also can choose from flatbeds, less-than-truckload and full truckload, and dedicated transport, among other options, as well as brokerage, warehousing, cross-docking, and other services. “We can act like a one-stop shop,” Crisan says. All trucks are outfitted with live tracking technology, providing clients with visibility into the movement of their shipments. They also can assess performance through reporting and analysis.

Building Cross-border Expertise

Since its earliest days as a company, ANDY has been handling cross-border shipments. “We’re experts on the processes and requirements, and well equipped to manage cross-border shipments, so there are no delays,” she says.

Because of its commitment and responsiveness to its clients, ANDY earned all the transportation business of one of its clients, in a dedicated contract arrangement. “We’ve become this company’s outsourced, dedicated private fleet,” Crisan says. For this company, ANDY provides planning, cross-docking, and daily deliveries and other services.

It’s an important and challenging role, and ANDY is more than up to the task. Because the client ships every day, its customers can place orders until late afternoon, and be confident their products will be shipped the next day.

“That’s our client’s promise to its customers, and our partnership makes us a very integral part of that promise,” Crisan says. Through the dedicated contract arrangement, the client gains quality service, predictability, and cost savings, she adds.

To achieve these benefits, ANDY worked with the company to truly understand its needs, and then tailored its services to meet them. “It’s a true partnership, and we’re working together to provide the services that can help our client achieve its objectives,” Crisan says.

Polaris Transportation Group: Customer-Focused Logistics Specialists

Along with its cross-border service, Polaris Transportation Group offers third-party logistics, warehousing, distribution, and supply chain management services.

Over the past three decades Polaris, one of the largest privately held Canadian LTL carriers, has moved 6 million shipments between Canada and the United States. “At Polaris, our principal activity is quick, transparent, cross-border transportation,” Cox says.

To ensure it can continue providing this, Polaris has cultivated an in-depth understanding of customs regulations, as well as strong relationships with customs and border protection agencies in both Canada and the United States, Cox says.

He and his team also have been very deliberate in investing in technologies that enable Polaris’ clients to work in a digitally transparent fashion.

Polaris ships a range of commodities, with a specialization in dry goods and high-value products. It also works in all transport modes. Along with its cross-border service, Polaris offers third-party logistics, warehousing, distribution, and supply chain management services.

Customers come in all sizes. “Smaller companies may move a handful of shipments a month, but those shipments impact their business, their well-being, and their reputation. I am equally in love with those businesses as much as I am the larger ones,” Cox says.

Four companies make up Polaris; three are Polaris Transport, Polaris Global Logistics, and Polaris Commercial Warehousing. In 2019, with the launch of NorthStar Digital Solutions—the fourth Polaris company—the head office housed a state-of-the-art digital lab. Among other initiatives, NorthStar Digital Solutions has explored artificial intelligence and machine learning, enabling it to continue searching for efficiencies within its processes.

Making Strategic Investments in Technology and Workforce

Polaris has also invested in robotic processing automation, artificial intelligence, and blockchain. By deploying a mobile driver application (FR8Focus) and integrating it into their TMS, clients can check the location of their freight through the customer portal in real-time.

“Everyone wants to know where their shipments are. This needs to be transparent,” Cox says. That holds true even when Polaris is working with supply chain partners, such as other carriers. “It’s seamless, transparent, and digital,” Cox says.

The use of systems like intelligent document workflow for order entry, accounts payables, and other functions, offers a “wealth of insight that enables the Polaris team to focus on managing complex situations,” Cox says.

Polaris operates a consolidation program for several U.S.-based clients that are shipping products to Canada from various regions within the United States. For this program, Polaris directs the companies’ shipments to a hub in the central United States, and then transports the cargo across the border on a single trailer.

“Shippers gain savings and certainty,” Cox says. They can be confident of the date their inventory or merchandise will arrive in Canada. This is harder to predict when products move in a piecemeal fashion.

Along with technology, Cox has been deliberate about searching for top employees, implementing best-in-class processes, and making sustainability a foundation of Polaris. “Whether it’s the environment or the social issues that affect business and the communities we’re working within—these are important to me as a business owner,” he says.

Sunset Transportation: Family Roots and Global Reach

Sunset Transportation offers all the services shippers need to conduct cross-border trade, from import/export transportation management to warehousing and transloading services.

The employee roster at Sunset Transportation includes a farmer, an Emmy winner, an Arabic speaker, a hometown pageant queen, and an amateur tractor pull competitor, along with several military veterans. The range of interests and experience among Sunsetters, as the employees are known, mirrors the broad roster of transportation and logistics services Sunset offers.

Sunset Transportation was founded in 1989 by Jim Williams. However, Sunset traces its start to 1861, when Jim Williams’ grandfather opened Williams Paper Company, which remains in operation today. Williams Paper Co. expanded its operations in 1970, when Jim Williams began managing the business’s fleet of trucks and established a thriving backhaul program.

In 1989, Sunset Transportation launched. In 2022, Sunset joined Armada Supply Chain Solutions, a food and restaurant logistics company.

For companies looking to do business between the United States and Canada, Sunset offers transportation services in all 10 Canadian provinces. It also provides import/export transportation management, truckload and LTL service, international export and import management, customs filing and management, financial support of goods and services tax (GST), and warehousing and transloading services. “We offer everything you need for cross-border trade,” Minarro says.

Working Between Mexico and the United States

Sunset also provides expertise and services for companies looking to trade between Mexico and the United States.

To help clients streamline their supply chains, Sunset takes a strategic approach to mapping their flows for inbound and outbound shipments, analyzing historical shipping data to identify sustainable opportunities to optimize freight, enhance service, save money, and improve technology. Using this insight, the Sunset team then presents a cross-border logistics solution that incorporates all the services needed for a streamlined supply chain.

In 2019, Sunset added a branch office in Laredo, Texas, offering cross-border logistics and border warehouse solutions. This was bolstered in 2021 with the opening of a cross-border office in Querétaro, Mexico, which includes an airport customs office, as well as a sales office.

Today, Sunset Transportation offers a range of services, including expedited freight, cross-border and customs solutions, international logistics, logistics management, and domestic, Mexico, and drayage carrier solutions. It also provides a comprehensive line of customs, warehouse, and freight brokers.

As important, Sunset internally handles every link of its supply chain services. “We don’t outsource customs and compliance functions,” Minarro says.

With CTPAT-certified warehouses in Laredo and Nuevo Laredo, Sunset can offer shippers solutions that keep them CTPAT-compliant from a warehousing and transloading perspective.

Sunset Transportation continues to innovate and adapt. Over the past three years, the company has collaborated with companies from Europe, Asia, and North America that are looking to establish new operations in Mexico. “Different industries, but all have the same goal: choose the best location within Mexico to manufacture a finished product or sub assembly that will be shipped into the United States,” Minarro says.

The Sunset team interacts with the customers from the planning stage onward and takes a holistic approach with every engagement.

“The deliverable at the end of the process is to provide suggestions on how to set up the logistics strategy, incorporating import and exports flows, technological requirements, and process automation,” Minarro says. “We listen to our customers and their needs, in addition to listening to the market, so we can provide the best, most efficient, and tailored solutions for our customers.”

Canada, Mexico, and China are the United States’ top three trading partners. Measured by logistics alone, however, the American relationship with Canada enjoys a status all its own.

“Canada and the United States share the longest land border in the world,” Canadian Prime Minister Justin Trudeau said in remarks following Biden’s address to Parliament. “We share three oceans and the Great Lakes.”

Intertwined and Inseparable

Those geographical links and the longstanding friendship between the two countries translate into a uniquely cooperative experience in border crossings—for both freight and people. Just ask vacationing Americans who cross from Niagara Falls, New York, to Niagara Falls, Ontario, and back again with ease.

Likewise, logistics providers on both sides of the Canada-U.S. border attest to the relatively seamless nature of the customs procedure as products move between the countries.

Logistics companies and shippers that have experience with, and knowledge of, the rules and regulations governing the process are routinely on top of any changes and adjustments in real time.

No wonder. The two countries are more than mere neighbors and friends. President Biden puts it this way: “Our destinies are intertwined and they’re inseparable.”

All indications point to a bond that is not going to change anytime soon. Trudeau puts it this way: “Whether it’s protecting our shared waters, including in the Arctic, conserving biodiversity, or building strong net-zero economies, Canada and the United States will continue to work together as partners.”

The partnership between the two countries is especially strong in commerce and trade. Biden has said the United States has no closer friend or ally than Canada. Nearly $2.6 billion in goods and services crossed the shared border every day in 2022, an almost 20% increase over the previous year.

This trade is vital to the economies of both countries, supporting millions of jobs on both sides of the border.

Keys to Strengthening the Partnership

Both countries strive to keep border crossings as smooth and efficient as possible. To that end, both governments established the U.S.-Canada Supply Chain Working Group to support the “Roadmap for a Renewed U.S.-Canada Partnership,” a blueprint created in 2021 to strengthen U.S.-Canada supply chain security and to “reinforce the deeply interconnected and mutually beneficial economic relationship between our two countries.”

In a joint statement, Biden and Trudeau explained: “It creates a partnership on climate change, advances global health security, bolsters cooperation on defense and security, and reaffirms a shared commitment to diversity, equity, and justice. Bound by history and geography, the partnership between the United States and Canada endures because we invest in each other’s success.”

The Supply Chain Working Group focuses on enhancing cooperation in key areas, including trade, with the objective of reaching greater alignment and identifying potential vulnerabilities.

The Working Group has initiated a Joint Economic Analysis to map supply chains and explore issues such as skills development and regulatory cooperation.

In 2021, the White House announced the creation of the Supply Chain Disruptions Task Force to address pandemic-era road and rail bottlenecks around borders and major ports. Among other things, the task force has worked to increase digital information flow between private companies operating logistics supply chains.

Meanwhile, Canada established its own Supply Chain Task Force to solicit recommendations regarding short- and long-term solutions to supply chain challenges from industry experts, businesses, and workers.

The result of all this has been the establishment and, when necessary, adjustment of requirements that enable manufacturers and shippers to comply with regulations free of undue stress—so long as the companies making the actual crossings are sufficiently prepared.

U.S.- and Canada-based logistics providers with rich experience in border crossings, such as FLS Transportation and Polaris Transportation Group, stand ready to provide those services.

Polaris Transportation Group has been known for its scheduled LTL service between Canada and the United States since 1994. The company now offers complete supply chain management for shippers, from transportation services to warehousing to digital solutions.

Forging Ahead

The pandemic served to underline, strengthen, and illuminate the mutually beneficial trade relationship between the United States and Canada. And in the aftermath of the pandemic, that relationship is more important than ever.

“We’ve seen a lot more business repatriated to North America,” explains Dave Cox, president of Polaris Transportation Group, a Toronto area-based industry leader in transit to and from the United States.

While driving on a business trip from Polaris headquarters just outside Toronto in Mississauga, Ontario, to the Cleveland suburb of Mentor, Ohio, Cox reflects on how the bonds between the North American neighbors grow year after year, through all challenges and changes.

“To me, as an entrepreneur and a business owner, these are exciting times,” he says. “These past three years have reinforced our ability to manage in a way that drives the Polaris culture of close connections with our teams. The pandemic caused us to strengthen our relationships through deeper conversations with our customers and partners.”

Pandemic-induced supply chain disruptions prompted collaborative efforts—always a hallmark of North American cross-border trade relationships—to increase, Cox notes.

“Carriers need strong relations with manufacturers and distributors,” he says. “These conversations are important. If I were a shipper, I would want to know I have a friend out there. We want shippers and distributors to think of us as good friends.”

Communication takes place at all levels, from sales to the C-suite, because Canada is mindful that as much as the United States depends on Canada, the reverse is likewise true. “We’re a trading nation,” he says of Canada. “Our standard of living depends on close ties to the United States.”

A Digital Passport for Freight

The heightened interdependence of the border-sharing neighbors presents an opportunity to build on their physical connections, Cox notes.

“I would like to see stronger efforts to streamline trade between Canada, the United States, and Mexico,” he says, adding he envisions a “trade union” where goods flow freely among the North American nations, as they do in the European Union.

“We have a fantastic opportunity,” he says. “Why not a digital passport for freight?”

As he sees it, a “digital passport” would function as something of a freight counterpart to the TSA PreCheck for airline passengers. Prior clearance through government oversight departments on both sides of the border—such as the Canada Border Services Agency in Canada and the Food and Drug Administration and Department of Agriculture in the United States—would serve to make the process of border crossings for freight more efficient and stress-free.

“At Polaris, we make it a point to know those agencies,” he says. “Wouldn’t it be wonderful if we had complete compliance already established? We know what we have to do on a daily basis and we’re very good at it.”

While recognizing and appreciating the relative speed and proficiency of border crossings handled by experienced logistics providers like Polaris, Cox says he believes there is always room for improvement.

“Business is coming back to North America,” he says. “So let’s make trade easy.”

FLS Transportation maximizes the benefits of cross-border trade between the United States and Canada by leveraging advanced technology and artificial intelligence systems. The team uses tracking and visibility tools to offer real-time shipping updates and enhance collaboration.

Knowledge Is Power

Giles Moore, the director of strategic accounts for FLS Transportation, also shares insights on the state of post-pandemic cross-border shipping.

While shipping volumes have remained strong, they have also stayed stagnant, he notes. Moore attributes this to the expected geographic differences between the two countries, leading to an imbalance between north and southbound volumes.

FLS Transportation, based in Atlanta, Georgia, with 17 offices throughout North America, specializes in cross-border third-party logistics (3PL) services. In addition to its expertise in over-the-road transport, the company offers customizable contract logistics functions such as warehousing, cross-docking, project logistics, and freight management.

Moore highlights the demand for Canada-specific providers due to the unique challenges of the Canadian market. Cross-border prices are more volatile compared to the domestic market, he notes.

Despite the challenges, the post-pandemic market has experienced double-digit growth, he states.

The recent scene of container ships waiting at major ports has emphasized North America’s reliance on Asian imports. As a result, many top companies have brought their operations and supply chain volumes back onshore, leading to an increased role for Mexico in the USMCA relationship.

Processes have returned to normal, but the availability of capacity has not increased significantly in the past decade, Moore acknowledges when asked about the return of pre-pandemic processes and supply chain disruptions. This has allowed shippers to recover some of the cost overages experienced during the pandemic, making cost a primary focus.

Moore emphasizes the importance of relationships in the logistics sector. While the close relationship between Canada and the United States provides an advantage for cross-border shippers, he also highlights the significance of strong relationships within transportation providers’ networks.

Maintaining a list of dedicated and satisfied partners should be a priority, as capacity is expected to tighten in the third quarter of 2023, he says.

Leveraging Advanced Technology

FLS Transportation maximizes the benefits of cross-border trade between the United States and Canada by leveraging advanced technology and AI systems. Their tracking and visibility tools offer real-time shipping updates, enhancing transparency, communication, and collaboration among the FLS team, carriers, and customers. This ultimately improves overall supply chain efficiency.

With their deep understanding of cross-border logistics, FLS provides comprehensive solutions tailored to the specific requirements of cross-border shipping. Their services cover freight forwarding, customs brokerage, compliance assistance, and transportation management across trucking, rail, air, and ocean services.

Although crossing processes between Canada and the United States are relatively smooth, FLS recognizes the importance of knowledge and familiarity. Their experienced professionals are well-versed in cross-border regulations, documentation requirements, and compliance procedures, ensuring smooth customs clearance and minimizing potential delays.

Enhancing Supply Chain Performance

The U.S. Department of Transportation and Transport Canada continue to work together to identify key data and metrics to assess the flexibility, travel time, and cost effectiveness of supply chain performance, notes a U.S.-Canada Supply Chains progress report issued by the White House in 2022.

The agencies aim to develop “a common approach to supply chain logistics data” that would allow them to build shared contingency plans to address any future supply chain disruptions.

“Over the past decade, the U.S.-Canada Regulatory Cooperation Council (RCC) has worked to support the alignment of regulations to reduce barriers to trade,” the report notes. “Continuing work should help support greater policy alignment between Canada and the United States in key areas of potential joint action, such as medical devices, critical minerals, electric vehicles and batteries, and solar energy, and strengthen supply chain resiliency between the two countries.”

In its final report, Canada’s National Supply Chain Force likewise stressed supply chain resiliency, especially in relation to the United States:

“In 2021, at the height of the COVID supply chain shutdowns, trade still accounted for 61% of Canada’s GDP. In 2021, Canada’s international merchandise trade amounted to approximately $1.24 trillion, a 16.8% increase from 2020—and the highest annual value of total trade on record,” the report states.

“In 2021 the United States accounted for $774 billion in total trade, comprising 62% of all Canadian trade that year. This trade would not occur without the backbone of the transportation supply chain.”

Charting a Clear Path

Canadian wildfires may have sent a haze of smoke over U.S. cities caught in their wind flow, but the skies remain clear and bright for continued cooperation in U.S.-Canada border crossings. For example, the RCC has worked with numerous Canadian and U.S. departments and agencies to develop successful regulatory work plans in transportation and other sectors.

As evidenced by President Biden and Prime Minister Trudeau’s statements, both countries understand international regulatory cooperation enhances economic competitiveness while maintaining high standards of health, safety, and environmental protection.

That’s good news for shippers and logistics service providers that contribute to a healthy bottom line for countries that are jointly mapping a path to progress.

THE CUSTOMER:

Morton Food Service is an independent distributor that supplies food and beverage products to independent restaurant owners and food service operators across southwestern Ontario and the Niagara region. The company offers more than 6,500 local and national products as well as many international products.

THE PROVIDER:

VAI is an independent mid-market ERP software developer offering solutions that automate critical business functions for the distribution, manufacturing, retail, and service sectors, including specific ERP solutions for hard goods, food, and pharmaceutical companies.

Among other actions, Morton implemented VAI’s S2K Enterprise for Food software, as well as its advanced software applications such as Mobile Order Entry, Suggested Purchasing, Warehouse Management, and Analytics. Together, these solutions are helping Morton Food Service improve productivity and visibility and grow sales.

An Aging ERP

Morton Food Service offers more than 7,000 products from numerous brands to 1,000-plus customers and specializes in providing locally sourced food to restaurants across southwestern Ontario and the Niagara region. In 2019, the company celebrated its centennial anniversary.

Before it connected with VAI, Morton had been making do with an aging ERP solution that lacked support. It also lacked many of the capabilities Morton wanted to implement for its own operations and to offer its clients.

“We realized that there were a lot of opportunities to improve our operations and our processes,” says Patrick Lenover, Morton’s director of project management.

For example, picking operations had been largely manual and paper-based. The company’s sales reps lacked access to updated and live inventory, and special orders were treated with a combination of manual methods, such as stickers and spreadsheets. Morton also handled routing manually.

“We put a lot of manual effort into almost all aspects of the business,” Lenover says. Not only was this less than efficient, but it largely disconnected different functions from each other.

Implementing a new ERP solution would address this, while also providing an opportunity to offer Morton’s customers features such as mobile capabilities.

“We wanted to improve our operations and we knew that we couldn’t do it with the solution that we had at the time,” Lenover says.

To help identify the best ERP solution, Morton brought in Patrick Rivait, an external project consultant. Working together, the Morton team and Rivait mapped all the company’s business processes across multiple areas, including warehouse management, purchasing, sales, and finance.

“We broke things down to a very granular level to come up with a shopping list of the different functionalities we needed,” Rivait says. In total, the team identified more than 1,000 process components, which they ranked according to importance to the organization.

Then they reviewed a range of ERP solutions. In their evaluations, the team focused on requirements unique to the wholesale food distribution space, such as the ability to provide lot traceability and handle expiration dates.

Through this research, the pool of potential partners was winnowed down to four or five solutions. Rivait and other team members asked these vendors to demonstrate how the system would function daily. For instance, how would an employee add a new vendor to the system? Asking all solution providers to show how their system would handle common operations gave Morton a level playing field to analyze and compare the various solutions.

“Overall, we found that VAI fit the needs of the organization,” Rivait says. In addition, Morton could continue to grow and work together with VAI.

VAI’s solutions leverage business intelligence, analytics, mobility, and cloud technology to help companies make informed business decisions and build a competitive edge.

Assessing the Needs

In working with clients, VAI starts with a requirements analysis, says Peter Zimmerman, North American software sales manager. Once VAI team members understand what a client is looking for, they can recommend best practices drawn from the knowledge they’ve gained through their work with numerous customers.

Every implementation process also includes plans for data conversion, pilot testing, and training, among other steps. These actions help ensure that the solution meets the company’s needs, while also strengthening buy-in among both management and end users.

A critical component in the success of the partnership between the two companies was Morton’s decision to dedicate several staff members to the ERP team. These employees were responsible for learning about the software and its configuration, as well as for training, testing, and retesting to ensure that everything was working as it should.

Also important was Morton’s decision to avoid testing in “silos,” or individual functions, Rivait says. Instead, the teams conducted “cradle-to-grave tests” to check that information flowed accurately from one function to the next.

A primary benefit of an ERP solution is its ability to link together different functions so information flows seamlessly, Rivait notes. To fully leverage the value of an ERP implementation, testing needs to ensure information moves accurately and completely between functions.

Information Leads to a Bump in Sales and Profitability

Typically, companies that implement the S2K solution can expect a bump in sales and profitability because they easily can see what customers are buying. They can also see profit margins by product, which leads to more informed inventory management decisions.

For instance, through the Suggested Purchasing module, if a new type of bakery bread is taking off, a company will see this and know it probably makes sense to boost orders of it, Zimmerman says.

Along with offering recommendations, the Suggested Purchasing module lets Morton see sales and average movement, among other data, on each product. It’s possible to make adjustments if, for instance, it’s clear a bump in sales was due to an event or to a holiday.

The system also can recalculate suggestions, enabling users to make more informed decisions about how and what they’re buying. As important, the module offers visibility into the calculation behind its suggestions. “There’s no guessing or wondering, ‘Where did that number come from?’” Lenover says.

Paper Picklists

S2K also streamlined multiple operational processes. Previously, for instance, Morton employees would print stacks of picklists on paper, by order and storage area, such as freezer, dry, or cooler. Then they’d distribute the picklists, one or two at a time, to selectors.

Using a pushcart, selectors would walk through the warehouse picking the items listed and labeling each product by writing the appropriate stop number on the box with a magic marker.

Selectors left the completed carts and orders at a staging area, where a supervisor checked them for accuracy. Another worker palletized and loaded the products onto trucks. Completed picklists were left with a clerk who manually entered the shipped quantities and catch-weights into the system before generating an invoice.

“This process was slow and required workers to rehandle a lot of boxes and paperwork,” Lenover says. It also provided opportunities for error.

The current process is decidedly more automated. To start, orders are imported into voice picking software—another addition to Morton’s mix of technology tools. Selectors wear headsets, barcode scanners, and mobile label printers, and drive a double pallet jack, where a driver is in front with two trailing pallets.

When the selectors log in to the voice picking software, it assigns them a unit of work for each pallet based on the route, stop number, storage area, and other information.

Through the headset, selectors are instructed to proceed to a bin location, where they scan the barcode. Once the correct product is scanned, the system identifies the quantity to pick. Labels automatically print from the mobile label printer, and the system instructs the selector to place the product on the appropriate pallet, where the labels are applied, and the process continues.

“The selector is able to completely pick two pallets of product by moving through the warehouse once,” Lenover says.

Quantities shipped and other information is captured at the time of selection, as voiced by the selector. Cases are clearly labeled and picking data is automatically sent back to the S2K solution. The supervisor generates the invoices when the route is complete.

“This process is much more efficient and accurate,” Lenover says.

Streamlining Ecommerce

By using the Roadnet Transportation Suite, a third-party application that interfaces with S2K, Morton is getting a better handle on its routing needs.

The tools within Roadnet allow Morton to map orders and identify the most efficient way to direct its trucks. Importing this information back into S2K streamlines and provides visibility to multiple operations, like dock scheduling and product receiving. “We have visibility to everything now,” Lenover says.

Plans for the Future

Morton is currently implementing VAI’s ecommerce solution, which provides each customer with their own portal to place orders, review pricing schedules, and check accounts receivable, among other functions.

Eventually, Morton plans to also implement VAI’s Smart Center solution. This includes customer relationship management, and customized dashboards and KPIs, among other features.

Through S2K analytics, Morton has created dozens of reports that offer users the information they need to make informed, insightful decisions. Among other metrics, the solution can provide inventory turns and customer fill rates, forecasted demand versus actual, and picking and shipping performance.

Adding these tools has impacted Morton’s revenue, as well as operations. The company says sales have grown more quickly after implementing S2K than they had previously.

Casebook Study: Upping the Food Chain

The Challenges:

An aging ERP system meant many processes within Morton Food Service remained manual, time-consuming, and at risk of errors. It also kept Morton from offering customers mobile and other capabilities.

The Solution:

Partner with VAI to implement its S2K Solution, as well as other solutions that work with S2K, like mobile order entry.

The Results:

Streamlined, automated picking and fulfillment operations and transportation routing, as well as greater sales growth.

Next Steps:

Implement VAI’s ecommerce solution and possibly its Smart Center solution, which includes customer relationship management, customized dashboards, and other features.

The Challenges of Cross-Border Logistics

Shipping across borders requires a unique set of considerations. Warehouses, cross-docking facilities, and distribution centers in the United States must account for potential delays caused by inspection agencies when navigating the complexities of shipping between Canada and Mexico.

In fact, recent changes from the Department of Homeland Security are now requiring 100% of all vehicles coming from Mexico to be screened with Customs and Border Protection (CBP), raising concerns about further exacerbating border congestion. While transit over the U.S.-Canadian border is significantly quicker than its southern counterpart, maneuvering freight across the northern border can still be tricky business. 

While there are considerable challenges to cross-border logistics, it is still significantly more efficient, in many cases, than overseas shipping, which continues to face unprecedented delays and supply chain disruptions.

Furthermore, companies nearshoring their supply chains need not navigate these complexities by themselves. To take full advantage of the benefits associated with nearshoring without the difficulty of learning cross-border logistics from scratch, companies often turn to third-party logistics (3PL) providers.

Cross-Border 3PLs: Three Considerations

By partnering with a 3PL, businesses are able to focus on their core competencies without throwing transportation management and cross-border logistics into the mix. The right 3PL partner will bring decades of experience and relationships to the partnership, helping businesses navigate the complexities of cross-border logistics, ensuring their shipments arrive on time, every time.

While many 3PLs offer cross-border logistics services, their quality ranges widely. Here are three key considerations when evaluating the cross-border services of a 3PL:

1) Prioritize Strategic Geography

Homeowners know that when it comes to real estate, location is everything. The same is true for logistics companies. When considering a 3PL partner for cross-border services, it is important to ask about their presence in three places:

• At the border
• On the Canada/Mexico side of the border
• On the U.S. side of the border

The CBP recognizes 328 ports of entry throughout the United States. Having warehousing or cross-docking options near those points is crucial to executing smooth and timely cross-border shipments. Despite the fact that many 3PLs may offer cross-border services, some of them do not have trained staff at or near the border.

When problems arise and logistics experts are not nearby, solving these time-critical problems can be much more difficult. By prioritizing a 3PL partner that has strategic locations along the U.S. border, companies ensure that knowledgeable personnel will be present where most needed: the border crossing.

Additionally, it’s important that 3PLs have strategic locations further inland of the border on either side. Having cross-border logistics experts present at the border should be a minimum requirement for considering a 3PL provider with cross-border services. But it’s also important to choose a 3PL partner with personnel present on both sides of the border. A 3PL company with trained staff in the United States as well as Mexico and Canada can take advantage of a more robust infrastructure of locations and offer higher-quality service grounded in deep relationships with carriers and customs brokers.

2) Utilize LTL for an Efficient Hub and Spoke Style Distribution Model

Flexibility is key to logistics, and utilizing less-than-truckload (LTL) shipping provides more flexible shipping options for distributors with faster transit times and lower costs. However, coordinating LTL shipments is complicated. It requires sophisticated management, and to get the most out of it, a 3PL company must have a large network of consolidation points. This network should include sites for cross-docking, transloading, as well as short-term and long-term warehousing.

While some 3PLs offer customer consolidation, which places responsibility and liability on the customer, others offer true LTL consolidation for cross-border shipments which maximizes trailer utilization, reduces mileage, and reduces handling—all of which result in lower prices. After all, cross-border logistics isn’t just about filing paperwork to get shipments across the border. It’s ultimately about getting products to their final destination on time, on budget, and damage free.

3) Look for Highly Trained, Bilingual Staff

When companies nearshore operations to Mexico, one new challenge is the language barrier. Given the complications of cross-border logistics and the possibility for changes at a moment’s notice, clear communication between all parties involved is critical. To remain competitive and ensure that shipments are made efficiently, 3PLs must have highly trained personnel ready to do business in various languages. 

Relying on translators for skilled staff can result in vastly different customer service for shippers depending on their location. When skilled staff are available to do business in both languages, customers on both sides of the border receive the same level of quality, and shipments are handled with the same level of care.

Rolling into a Successful Future

As concerns over an economic recession loom large, many companies are looking to nearshoring as a way to become more adaptable to consumer changes. In uncertain times, shippers can’t afford the 60-to-90-day lead time for products sourced from Asia. The future for many companies will involve diversified supply chains to mitigate risk and adapt quickly to changing environments, whether from pandemics, inflation, or whatever may come next.

Cross-border shipping will always have unique nuances depending on the global political environment, changing government-mandated compliance standards, and unforeseen events. However, with innovative strategies for operations and a 3PL provider that can share valuable insights, operations can roll smoothly for years to come.

Andrew Welling is the director of cross-border services at TA Services. With more than a decade of transportation management experience including shipping, transloading, consolidation, 3PL, and international logistics, Welling brings a diverse background to customers. He earned his graduate degree in business administration, finance and his undergraduate degree in supply chain management, marketing, and international Studies.

With a vital trade relationship aloft, moving shipments between Canada and the United States remains smooth and collaborative—thanks to reliable and experienced providers.

In the view of Kirsten Hillman, Canadian ambassador to the United States, the longstanding spirit of friendship and good will that exists between Canada and the United States goes well beyond the relative ease with which cargo moves back and forth between the two borders.

“It’s more than just trade,” she says. “We don’t just sell products to each other, we make things together.

“An automobile that is made between Detroit and Windsor will have crossed the border six to seven times before it rolls off the assembly line,” she says. “It’s the same for our agricultural sector and manufacturing sector outside of autos. We are deeply integrated, and we create millions of jobs in both countries through that integration.”

The power of this integration transcends even the outbreak of a pandemic. When COVID-19 struck and restrictions were put on non-essential travel between the two countries, Hillman notes, all commercial traffic was deemed essential on both sides.

“This partnership is vital not only to our ability to weather difficult times as we saw with COVID but also to helping the world in moments of challenge and crisis,” she says.

There is no question that the U.S.-Canada trading relationship is a particularly significant example of the comity between the two nations. A concrete manifestation of that relationship is the creation of the U.S.-Mexico-Canada Agreement (USMCA) on July 1, 2020.

“This agreement is the cornerstone of our trade relationship in North America, and it is the cornerstone of the Canada-U.S. trading relationship,” Hillman says.

The creation of the “new NAFTA,” as Hillman calls it, underlines a shared commitment to maintaining a robust relationship long into the future by updating an agreement that had become dated.

“When NAFTA was first entered into force there was no internet, no e-commerce,” she says. “The way we do business today globally wasn’t at all the same. It was important to preserve the open economy between the two countries, and it was also important to modernize the agreement to recognize digital trade and to maintain regulatory cooperation.

“We worked hard to find ways to do what actually matters most to our businesses,” Hillman adds.

Playing to Mutual Strengths

More recently, U.S. President Joe Biden and Canadian Prime Minister Justin Trudeau jointly created the Canada-U.S. Supply Chain Working Group to enhance collaboration on supply chain issues. The working group is led from the White House through the National Security Council and in Canada through the Privy Council Office, the central agency of the Canadian government that supports the prime minister and acts as the secretariat to the Canadian cabinet.
Biden and Trudeau established the group in November 2021 “to analyze supply chain strengths and vulnerabilities and to make sure that we are putting in place systems that make both countries as strong, resilient, and mutually supportive as possible,” Hillman says.

On a practical level, for manufacturers to gain the full advantages of the cooperative spirit that exists between Canada and the United States it is vital that they work with logistics providers who understand and appreciate the changing times, rules, and regulations that affect cross-border trade.

“Compliance with these requirements should always be a key consideration for manufacturers and shippers,” Hillman says. “Do they have the right permits and licenses from the regulatory agency involved? Is the customs paperwork in order? Are labeling requirements compliant? Due diligence on all compliance requirements is important, as is making sure they get it right the first time.”

Occasional slowdowns at border crossings occur when preparation is lacking.

“If a truck gets to the border and doesn’t have the paperwork, that creates a chain reaction,” she says. “Doing the work upfront, making sure carriers have everything in order before they get to the border is important. For companies that need help, there are experts who are very knowledgeable about the markets to which they export.”

Leveraging Resources

In addition, Hillman says, both governments provide plentiful online information.

“There are terrific resources online,” she says, adding that U.S. exporters typically turn to the Canada Border Services Agency (CBSA) website while Canadian exporters are primarily interested in the U.S. Customs and Border Protection (CBP) content. For importers, this equation is flipped.

For example, on the CBP website, U.S. importers can find insight on how to request merchandise processing fee refunds after entry if the USMCA treatment was not claimed at the time of entry for eligible goods.

Similarly, on the CBSA website, U.S. exporters can find information on the current low-value shipment thresholds and applicable de minimis duties and taxes.

Hillman also notes the importance of checking with specific government agencies, such as the U.S. Food and Drug Administration (FDA), for rules pertaining to regulated products. And the appropriate government agencies and industry groups sometimes offer best-practice webinars to increase exporter-importer regulatory awareness.

Consulting with logistics providers who are experienced in both the opportunities and the challenges inherent in Canada-U.S. trade is essential.

“It’s a big hurdle for companies to move from being focused only on their internal market to where they are growing and have other opportunities globally,” Hillman says. The “first step into the global world,” she adds, is usually for Canadian companies to move into the United States and vice versa.

While the transition can be smooth, it still means companies must consider the rules of international compliance.

Growing Collaboration

Dave Cox, who leads what he calls “an American company headquartered in Canada,” says that collaboration—not just between the United States and its northern neighbor but also between carriers and shippers—is stronger than ever in the pandemic (and looming post-pandemic) era.

“There’s a lot more collaboration with clients now,” says Cox, president of Polaris Transportation Group, based just outside Toronto in Mississauga, Ontario.

Polaris is an industry leader in transit to and from the United States. From that dual perspective, Cox notes that the longstanding spirit of cooperation between Canada and the United States remains as robust as it always has been, while the carrier-shipper relationship has grown more powerful still.

In large part, he says, this is due to the greater demands the pandemic has driven for transparency and communication in transportation and supply chain management generally.

“I have stronger conversations with our clients today, including discussions about where business is going,” he says. “In addition, we find more clients are pre-booking space. That didn’t happen so much before.”

Capacity is key in today’s business climate, he explains, and it is essential for shippers to stay informed about the capacity situation every step along their cargo’s journey.

Carriers like Polaris now have a deeper understanding of what capacity they have at any given moment, he says, and shippers are likewise acutely aware of the impact that capacity will have on the timeliness of their shipments. Shippers therefore insist that carriers communicate capacity realities promptly and accurately.

“In years past, carriers and shippers may not have been the greatest partners,” Cox acknowledges. But today, both are “100% better educated,” he says.

“We didn’t need to know each other’s businesses so much pre-pandemic,” Cox says. “But now we have ongoing conversations where we learn more about each other.”

This more collaborative relationship is likely to remain the norm, he says, as tight capacity conditions show no signs of abating. Speaking for Polaris, Cox is in favor of anything and everything that will make the cross-border movement of goods more seamless and efficient. In that regard, he continues to emphasize the vital importance of shippers having their documents completed as early as possible in the process.

“Both Canada and the United States are great entities to work with if you are proficient and provide documentation well in advance,” he says.

Ensuring Efficiency

On the U.S. side, Cox adds, customs agents are increasingly focused on proper declarations of the country of origin of products being shipped. Failing to label products at all or mis-declaring their origins are “the two biggest things that slow crossings down,” he notes.

If issues are found in random inspections, he explains, shipments will not move quickly and efficiently across the border. “Shippers can help by getting documents to us when the client books an order,” he says. “It seems like a small thing, but it’s not.”

Heightened emphasis on border and supply chain security has resulted in an increase in contraband seizures, and agents are “very intentional and deliberate” in their cargo examinations, Cox says.

Moreover, he says, manufacturing and supply chain disruptions overseas mean that more facilities are operating near shore in the United States, Canada, and Mexico, resulting in even tighter bonds in the “North American supply chain.”

Cox believes COVID-induced changes have served to fine-tune operations at Polaris and other carriers, and the future of Canada-U.S. cross-border trade is bright.

Strategic Partnerships

Jennifer Mead, CEO of S-2international LLC, says cross-border trade has been part of the Georgia-based international shipping company’s portfolio since its founding in 2004.

A single-source provider of premium transportation solutions, S-2 has its origins in the automobile sector but today provides comprehensive services to a wide variety of industries with ground expediting as well as service-sensitive LTL and truckload.

“Cross-border Canada has always been part of our business model,” Mead says. “As a result, we have built our Canadian vendor partnerships as a key business strategy, and our relationships are longstanding.”

Capacity is an increasingly challenging issue for shippers. “One thing that we have recognized in the past several years is that there are not a lot of new Canadian expedited trucking partners coming into the market,” Mead says. “This puts a strain on capacity for handling trans-border shipments on the ground, especially in the expedited sector.

“When working with trans-border freight, you need Canadian expertise, she adds. “There are things that you need to know to ensure a smooth transition over the border so as not to impact delivery timing.”

Mead cautions those aiming to move cargo across the border to look for providers who can offer certification in the applicable border security programs such as ACE, FAST, C-TPAT, CSA and PIP. (See acronym refresher sidebar.)

Expediting Processes

“Using a carrier that has drivers who are FAST approved will help expedite the process of clearing the border,” Mead says. “When using a third party like S-2international, find out about their vetting process for Canadian providers and how they can help facilitate the process.”

In emphasizing the importance of knowing and understanding the alphabet soup of border-crossing programs, Mead echoes Kirsten Hillman’s caution that manufacturers must be prepared for their border crossings by keeping compliant with regulatory requirements.

Such cooperative approaches to border crossings will not only maintain but also enhance the excellent trade relationship that exists between the United States and its northern neighbor. “We continue to work on identifying more customers with Canadian transport needs while simultaneously working to expand capacity,” Mead says.

“Our carrier development team works with existing partners to build partnerships to ensure priority access to equipment and they work with our marketing team to solicit new providers,” she adds. “We continue to review requirements with existing customers to determine if they have additional needs that involve trans-border movements, introducing them to our Canadian capabilities to open up new lines of service.”

Certainty Amid Uncertainty

The supply chain disruptions over the past three years have many shippers returning supply chain operations to North American soil.

In a world where the only thing that is certain is uncertainty, shippers are looking for proactive customer service, technology that provides shipment transparency, and fair pricing. Enter FLS Transportation.

With 18 offices throughout North America—11 of them in the United States—FLS is a cross-border 3PL specialist. In addition to its core competency in over-the-road transport, FLS provides highly customizable contract logistics functions, including warehousing, cross dock, project logistics, and freight management.

Shippers have turned to FLS to help streamline their shipping operations across North America with all the recent supply chain disruptions.
Craig Swain, senior vice president of sales for FLS Transportation, says the pandemic prompted customers to depend more heavily on their next-door neighbors as trading partners.

“With FLS Transportation being an expert in cross-border freight, we became the critical link in their supply,” he says. “The supply chain disruptions from overseas made our customers look at the products they are sourcing globally.

“The disruptions made Canada and the United States more reliant on each other.”

The skyrocketing costs of shipping containers from overseas, combined with customs delays and extreme congestion at overseas ports, acted as a boon to Canada-U.S. trade.

“Those high costs, extreme delays, and congestion at the ports made trade between Canada and the United States more appealing,” Swain says.
FLS has responded to the increased demand for its services. “We’ve done record volumes over the past 12 months,” Swain says. “Particularly in our cross-border lanes, we have seen strong demand, and we’re very optimistic that will continue.”

As shippers attempt to rein in costs, many have turned to FLS Transportation as their 3PL of choice to find capacity and fair pricing.

Providing Transparency

“From the conversations we’re having with our customers, it’s clear that they’re looking for alternatives to add transparency to their shipping process,” Swain says. FLS Transportation listened to its customers and responded by investing heavily in its technology systems, including an online customer portal.

The improvements have allowed FLS customers complete access to every facet of their partnership with FLS Transportation.

Amid his optimism, Swain echoes the sentiments of other cross-border trade experts and Canadian Ambassador Hillman: Timely planning and paperwork are vital to make border crossings as efficient as possible.

That’s where utilizing a cross-border trade expert like FLS Transportation can add simplicity to moving freight across North America.

Knowing what’s happening in logistics and understanding the rules, following the protocols, and forging close relationships among customers, logistics providers, customs officials, and government leaders can be a lot for one shipper.

Companies have turned to FLS Transportation to navigate these difficult times. The company creates a winning formula that includes expertise, technology, and proactive customer service to maintain the strong trade ties between Canadian and U.S. supply chains long into the future.

Should you need extra help understanding the cross-border freight process, FLS created a free guide on its website: www.flstransport.com/weekly-freight-report.

With due diligence, proper attention to regulatory requirements, and partnerships with expert providers, moving shipments between Canada and the United States can remain a stress-free, friendly, and mutually beneficial process.

Spelling It Out: An Acronym Refresher

ACE, or Automated Commercial Environment, is the system through which the trade community reports imports and exports, and the government determines admissibility.

FAST, or Free and Secure Trade, is a commercial clearance program for known low-risk shipments entering the United States from Canada and Mexico.

C-TPAT, or the Customs Trade Partnership Against Terrorism, is a program through which U.S. Customs and Border Protection (CBP) works with the trade community to strengthen international supply chains and improve U.S. border security.

CSA, or Compliance, Safety, Accountability, is the safety compliance and enforcement program of the Federal Motor Carrier Safety Administration (FMCSA) that holds motor carriers and drivers accountable for their role in safety.

PIP, or Partners in Protection, is a cooperative program between private industry and the Canada Border Services Agency (CBSA) aimed at enhancing border and trade chain security.

Duty-free shipping made easy

We can thank Section 321 for duty-free shipping; the statute from the U.S. Customs and Border Protection agency allows merchandise valued at under $800 to enter the United States completely exempt from taxes and customs duties. That’s it. No catch.

You can bring your goods over the border and not pay a dime to the government for the privilege. Buy in bulk from anywhere in the world, break down the goods into smaller shipments, and take them directly into the U.S. market. Of course, doing that work yourself takes time, and more importantly, money. That’s why you rely on Canadian fulfillment services.

How much money can you save at the border?

That answer differs, as it depends on what you’re bringing into the United States. And how much. But one thing is certain—conventional importing isn’t cheap. Outside of Section 321-protected goods, the U.S. Customs and Border Protection agency collects taxes and fees for a host of other government agencies. Beyond tariffs and customs fees, state sales taxes can even get tacked on to some goods entering the United States. And it all adds up—the U.S. government collects tens of billions of dollars in import duties each year.

For the average importer, these border costs can sometimes go as high as 20% of the value of their shipments. So why lose a full fifth of the worth of your goods in transportation? You don’t have to; you can opt to pay considerably less with the help of Canadian fulfillment services.

How do Canadian fulfillment services work?

It’s right there in the name—Canada fulfills the shipment. Importers buy large quantities of goods overseas, oftentimes from China, and have them sent to a Canadian fulfillment center located near the U.S. border. Shipping experts at that center break down the goods into allotments worth $800 or less, and bring them into the United States. From there, importers can arrange to have the goods handed over to U.S. carriers for a wide range of delivery options.

The savings don’t stop at tariffs

While the prospect of bringing tariff-free goods into the United States is enough to entice most importers, the cost-saving considerations of using Canadian fulfillment services go well beyond there. As most people in the importing business know, warehousing costs can take big bites out of profits, from storage and packing to insurance and more.

But those expenses can be considerably mitigated by taking advantage of existing warehouse facilities with shippers who are expert at receiving goods for fast turnarounds. You can store goods and incrementally bring them into the United States for a fraction of the cost of trying to do it on your own.

A saving grace for e-commerce

While the brick-and-mortar retail sector has long enjoyed the benefits of Section 321, e-commerce has seen a boom with the recent surge in online shopping prompted by the pandemic. With e-commerce fulfillment, online businesses turn to on-the-ground shipping pros to handle their orders, from bulk shipments and inventory management to customer delivery, and even taking care of returns.

Are you ready to stop paying unnecessary costs at the U.S. border? Have you had enough of bearing the brunt of transportation expenses by yourself? If so, you can look to Canadian fulfillment services and the money they’ll save you.

"The president’s early calls will be with partners and allies," Psaki said. And the United States has no stronger partner and ally than its northern next-door neighbor.

The Government of Canada states it officially: "The Canada-United States partnership is forged by shared geography, similar values, common interests, deep personal connections, and powerful, multi-layered economic ties. Canada and the United States enjoy the largest trading relationship in the world. A secure and efficient flow of goods and people across the border is vital to both countries’ economic competitiveness and prosperity."

Biden and Trudeau committed to a "Roadmap for a Renewed U.S.-Canada Partnership" to revitalize and expand the historic relationship between the countries. The agreement establishes a blueprint for mutual prosperity, including a partnership on climate change and strengthened cooperation on defense and security.

Strong and Steadfast

For logistics professionals on both sides of the border, this agreement translates into a continuation of the most steadfast trade relationship in the world.

Consider these most recent figures reported by the Office of the United States Trade Representative:

• Canada was the United States’ largest goods export market in 2019.
• U.S. goods exports to Canada were $292.7 billion, up 43% from 2009.
• U.S. exports to Canada were up 191% from 1993 (pre-NAFTA). U.S. exports to Canada accounted for 18% of overall U.S. exports in 2019.
• The top export categories were: vehicles ($52 billion), machinery ($45 billion), electrical machinery ($25 billion), mineral fuels ($25 billion), and plastics ($13 billion).
• U.S. total exports of agricultural products to Canada totaled $24 billion in 2019. Leading domestic export categories included: prepared food ($2 billion), fresh vegetables ($2 billion), fresh fruit ($1.5 billion), general snack foods ($1.4 billion), and non-alcoholic beverages ($1 billion).
• On the import side, Canada was the United States’ third-largest supplier of goods in 2019.
• U.S. goods imports from Canada totaled $319.4 billion in 2019, up 41.2% from 2009.
• U.S. imports from Canada were up 187% from 1993 (pre-NAFTA). U.S. imports from Canada account for 12.8% of overall U.S. imports in 2019.
• The top import categories were: mineral fuels ($86 billion), vehicles ($53 billion), machinery ($23 billion), returns or goods shipped back ($18 billion), and plastics ($11 billion).
• U.S. total imports of agricultural products from Canada totaled $24 billion in 2019.

Simply put, Canada is the United States’ largest customer. Canada buys more goods from the United States than China, Japan, and the United Kingdom combined. Likewise, Canada is the top trading partner in most of the individual U.S. states. Further, Canadian companies operating in the United States directly employ 725,000 American workers.

The trading relationship between Canada and the United States helps both countries grow stronger economies, support economic growth, eliminate barriers, and compete globally.

The numerous trade and investment agreements involving Canada and the United States directly impact trade and, therefore, the logistics sector. These include both the Canada-U.S. Free Trade Agreement (CUFSTA) and the Canada-United States Mexico Agreement (CUSMA).

Signed in 1987, CUFSTA placed Canada and the United States at the forefront of trade liberalization. CUSMA, which went into force in July 2020, preserves key elements of the long-lasting trading relationship among the countries and incorporates new and updated provisions that seek to address 21st-century trade issues and promote opportunities for the nearly half billion people who call North America home.

In practical terms, this extraordinary collaboration means border crossings are accomplished with relative ease—that is, when shippers have the assistance and advice of logistics professionals who keep up to date on the rules, laws, policies, and protocols as they evolve to keep pace with commercial concerns.

Just as with the partnership between the two countries themselves, relationships and history between shippers and their professional logistics partners are essential to success.

Polaris Transportation Group Communication and consistency are key

As the saying goes, the more things change, the more they remain the same. From the perspective of Polaris Transportation Group, highly regarded for its scheduled LTL service between the United States and Canada, the saying translates into seamless border crossings amid political transitions and even a worldwide pandemic.

"Both governments have always been a pleasure to deal with," says Dave Cox, president of Polaris. "With respect to supply chain security, it has always been a great working relationship."

Based in Toronto’s neighboring city of Mississauga, Ontario, Polaris specializes in the shipment of dry goods and is an industry leader in transit to and from the United States, including Alaska.

The company maintains U.S. headquarters for Polaris Motor Freight, Inc., in the Cleveland, Ohio, suburb of Willoughby. Given the company’s hybrid geography, Cox describes Polaris as "an American company headquartered in Canada."

Border transfers are "business as usual," he says, while Polaris navigates the process between the two countries in a collaborative and cooperative manner. Border security is always paramount, Cox says, adding that business continues to be robust even as supply chains have been reimagined due to the pandemic. Prospects for the future are likewise positive, he says.

"Capacity is tight across the board," Cox acknowledges, but good communication has been a key to diminishing the impact. "We spend a large part of every day talking to our customers and business partners," he says, in order to ensure that the company continually understands both their current and future needs.

Despite the commonalities that exist between the U.S. and Canadian markets, Cox says, there are important distinctions that shippers on both sides of the border must bear in mind, particularly as market conditions evolve after COVID.

"Canadian shippers may not understand the capacity crunch as much as they should," he says, adding that Canadian distributors "need to be enlightened" about the stresses that currently exist on the U.S. side.

Forging Relationships

Cox advises companies to maintain consistency in their relationships with existing supply chain providers so that they can work together in the effort to secure capacity. It is natural for rates to ebb and flow along with market conditions, he points out, but it is essential that good value is maintained at all times on both sides of the equation. "The key is fairness," he says.

The border-crossing process is greatly assisted when the proper documents are provided as early as possible. "We move 300,000 orders across the border—both ways—every year," Cox says. "We need to get the documents early and have all our ducks in a row."

In the end, it is all about communication and relationships.

"Good relations with your custom broker are essential," he says. "And custom brokers need to do a good job educating their clients" about new laws and protocols.

"We work with a lot of custom brokers," Cox says. "We get as much information and detail into our automated system as early as possible." Taking such careful steps has paid dividends through the COVID crisis.

"The world has changed since March 2020," Cox says. "When we went into March we didn’t know what to expect. Looking back, it is staggering to see where business is despite the crisis."

TForce Logistics: Staying on Track

In logistics as in life, every journey begins with the first step. But when the journey is about getting products to market, the final mile may be the journey’s most important segment of all. For moving products across the Canada-U.S. border, getting to the consumer’s doorstep means partnering with final-mile providers.

"By getting closer to the end consumer, manufacturers and distributors get the final-mile delivery completed with speed, reliability, visibility, and competitive price," says Dean Mills, vice president of sales, North America, for TForce Logistics, an asset-light final-mile logistics and transportation provider with extensive coverage across the United States and Canada.

"Due to the demand for faster deliveries, TForce Logistics hosts branch locations and delivery zones in population-dense areas across Canada and the United States," Mills says. Five established regional networks cover the U.S. Northeast, Central Canada, Texas, Southern California, and Western Canada, with a sixth network in development in the U.S. Southeast.

"This networked solution expansion allows shippers to inject their shipments into one TForce Logistics location, for an overnight interline to the other final-mile branches," Mills explains.

"For instance, in the Northeast, the New Jersey branch serves as an injection location, connecting into New York, Philadelphia, Baltimore, and Washington, D.C. for next-day delivery," he adds. "This provides significant value and flexibility for companies managing inbound freight requiring next-day final-mile shipping."

Final-mile considerations were among the areas of logistics significantly impacted by the waves of change that swept the world in the recent past.

"The dynamics of the past few years prioritized the importance of carrier diversification," Mills says. "One option is to hire additional transportation managers to oversee multiple final-mile carriers, depending on the carrier’s individual network reach. This results in a vendor-heavy portfolio, multiple systems, and administrative resources.

"The other option is to partner with carriers like TForce Logistics, with a broad reach that meets your network portfolio’s needs," he adds.

Strategic Locations

Companies are setting up micro fulfillment centers close to their customers, Mills explains, manually building solutions that get product inventories closer to the end consumer.

"There is significant upside to partnering with 3PLs who work with importers, manufacturers, and shippers to get their products closer to the end consumer," he says. "Companies with a fast and reliable next-day final-mile delivery service are winning the hearts and reviews of their customers."

TForce Logistics has more than 70 locations strategically placed in all major U.S. and Canadian cities. In June 2021, the company launched its Texas expansion, using four warehouses to cover 191 ZIP codes in Dallas, 127 ZIP codes in Houston, 74 ZIP codes in San Antonio, and 56 ZIP codes in Austin. This means e-commerce shippers can use Dallas as an injection site with next-day service in the four largest cities in Texas.

In 2020, the company announced an expansion of its dedicated last-mile delivery capacity in Toronto with the opening of the Torlake center, its third facility in the greater metropolitan area.

The new facility, a 21,000-square-foot distribution center, is located in south-central Toronto’s Etobicoke neighborhood. Torlake complements TForce Logistics’ current footprint in the greater Toronto metropolitan area, which also is served by a 21,500-square-foot distribution and fulfillment center in Brampton and a 5,000-square-foot operation in Markham.

Collectively, the TForce Logistics final-mile operations make upward of two million deliveries annually in the Toronto area.

As in everything related to logistics, the goal is to get closer to customers. The unique spirit of cooperation and collaboration that exists between Canada and the United States, coupled with strong relationships among logistics providers, combine to make cross-border trade a particularly bright spot on the landscape of international trade.

While North America continues to reel from the impact of COVID-19, many political and economic lessons of the past have been turned upside-down and inside-out. As a result, 2020 thus far has been marked by significant declines in exports and imports—a trend likely to last for months to come.

The pandemic has caused many businesses to operate at limited capacity or to cease operations completely, and the movement of travelers across borders has been restricted, notes The Bureau of Economic Analysis (BEA), part of the U.S. Department of Commerce.

Not surprisingly, the U.S. monthly international trade deficit has increased. As exports decreased more than imports, the deficit increased from $49.8 billion in April to $54.6 billion in May, the BEA reports.

But then another change occurred: The U.S.-Mexico-Canada Agreement (USMCA) went into effect in July 2020, replacing NAFTA and maintaining the three-nation free trade zone.

The agreement will strengthen and modernize the North American economic platform, say leaders of the Business Roundtable, an association of chief executive officers of leading companies working to promote the U.S. economy and expand opportunity for all Americans through sound public policy.

"USMCA can accelerate the North American economic recovery, in part by providing much-needed certainty for business," note leaders of the Business Roundtable in a formal statement.

"This new enforceable trade deal will also promote modernized rules, foster digital trade and innovation leadership, facilitate trade and efficient border crossings, and improve regulatory alignment and competitiveness," the statement says.

a Reinvigorated Relationship

All of this translates not only to maintaining the longstanding sense of partnership that has existed between the United States and Canada, but even more good things to come for those who provide solutions or services that empower Canada-U.S. commerce, co-production, collaborative manufacturing, and cooperation.

"The current environment is poised to make the U.S.-Canada trade relationship even stronger," says Paul Tessy, senior vice president, Purolator International, the U.S. subsidiary of Ontario-based Purolator Inc., Canada’s leading provider of integrated freight and parcel delivery services.

"We have three ‘once-in-a-lifetime’ events happening at the same time, which will certainly affect both the U.S. and Canadian economies," Tessy says. Those events are:

1. The reopening of each country following the COVID-19 shutdown.

2. Lingering uncertainty over trade relations with China, and the potential recalibration of supply chains away from China.

3. The newly implemented USMCA, which modernizes the trade relationship and opens many new doors for U.S. businesses.

"The United States and Canada are each other’s most important trade partner, and the USMCA reinforces that relationship," Tessy says. "Given the global uncertainty right now, I expect a growing number of U.S. and Canadian businesses will look for opportunities closer to home. The new trade agreement will further incentivize them to do so. You could say the USMCA has come along at the exact right moment for U.S. and Canadian businesses."

In 2019, $612 billion in goods crossed the U.S.-Canadian border, which equates to roughly $1.7 billion per day.

But the COVID-induced shutdown has negatively affected the cross-border relationship. At one point, truck crossings over the Detroit-Windsor Ambassador Bridge, the border’s busiest land crossing point, were down by 43%.

"Manufacturers and parts suppliers suddenly no longer needed the volume of parts that normally flowed each day between the United States and Canada," Tessy says. "As supply chains start to function again, we are already seeing an uptick in shipments crossing the border."

E-coMMERCE BOOM

With USMCA in effect, Tessy believes U.S. businesses will find even greater opportunities in the Canadian market long-term. He says that e-commerce, for example, will benefit from a provision that allows Canadian consumers to avoid paying duties on express shipments valued up to C$150, with taxes exempt on shipments valued below C$40.

That’s a significant increase from the C$20 threshold that had been in place for decades. E-commerce also will benefit from a USMCA provision that simplifies the customs clearance process for shipments valued at less than US$2,500.

Arguably the USMCA’s most important benefits, Tessy says, are modernizing the trade relationship with new provisions for digital trade and intellectual property, and eliminating the uncertainty that has lingered for the past few years. "The United States and Canada have affirmed their commitment to growing and facilitating cross-border trade, and have laid out a path for moving forward," he says.

Tessy notes that any discussion of U.S.-Canada cross-border trade must highlight the tremendous opportunities for U.S. e-commerce retailers. "Canadian e-commerce is projected to increase at a double-digit rate for the next several years," he says. "Sales from the United States account for more than half of all international transactions.

"U.S. e-commerce sellers got a big boost from the USMCA, which allows Canadian consumers to avoid paying duties on express shipments valued at less than C$150 (C$40 for taxes)," he adds. "The U.S. International Trade Commission projects this provision to result in $332 million in additional U.S. e-commerce-related exports to Canada."

Another bright spot, he says, is the ability of logistics providers such as Purolator to guarantee delivery of those e-commerce shipments to the Canadian market. Purolator can generally have an e-commerce shipment delivered within 2-4 days, which is on par with Canadian consumer expectations.

"This level of service puts U.S. e-commerce sellers on an equal footing with Canadian businesses that do not have to factor in an international border crossing," Tessy says.

Purolator is so committed to e-commerce, he adds, that in 2019 the company announced a $1-billion investment in its Canadian distribution capabilities. This includes construction of a Toronto "super hub" that will serve as "command central" in routing shipments arriving from the United States, along with investments in delivery vehicles, including environmentally friendly electric bikes and scooters for urban deliveries.

aN Essential Partnership

Regardless of how products are ordered and purchases are made, trade relies on getting shipments from here to there.

"Trucking is an essential service," says Dave Cox, president of Polaris Transportation Group. "Cross-border traffic is important for both countries to support their industries."

Polaris, which specializes in the shipment of dry goods, is best known for its scheduled LTL service between Canada and the United States. Based in Toronto’s neighboring city of Mississauga, Ontario, Polaris delivers industry-leading transit times to and from the United States, including Alaska. The company maintains U.S. headquarters for Polaris Motor Freight, Inc., in Willoughby, Ohio, just outside Cleveland.

Staying Seamless

Even amid the challenges of COVID-19, Cox says, cooperation between the two countries has enabled seamless border transfers without undue congestion. "It’s a joint effort of both governments," he says. "It feels like a partnership."

The important thing is that all the shipment documentation required is in its proper order. "Typically, when delays occur it has to do with paperwork," he says. "We help make sure there is rock-solid information on all commercial invoices and processes."

Polaris utilizes up-to-date technology specifically designed for this purpose to ensure everything is in place. "We use so much technology in processing documents," Cox says, adding that the company’s subject matter experts are easily able to address anything that may pop up as needing correction or clarification.

With this ideal blend of artificial intelligence (AI) and human intervention, issues are identified prior to border arrival. "Polaris engineers get involved and resolve matters quickly," Cox says. "We move a lot of cargo, and that’s how we manage to keep everything running smoothly. When equipment leaves our yard, we are comfortable in the fact that all the i’s are dotted and the t’s are crossed."

This attention to detail also figures prominently in addressing any potential security concerns. "We take border security very seriously," Cox says. "It’s extremely important to Polaris. We make sure we work with reputable clients."

To that end, clients are put through a security audit and shipments are examined with X-ray equipment. In this realm, too, he says, cooperation between the two governments is essential. "We work very closely with Canadian and U.S. customs to be sure there is no contraband in shipments. We help our clients protect their supply chains."

To ensure safe and secure transit, Polaris participates in every border security program—C-TPAT (Customs Trade Partnership Against Terrorism), PIP (Partners in Protection), CSA (Customs Self-Assessment), and FAST (Free and Secure Trade).

Polaris also offers full-service short- and long-term warehousing solutions. The company’s approach to those solutions is to adapt existing systems to fit the systems of its clients. With a quarter-century of experience in logistics, it is fitting that the company uses the hashtag #CrossBorderPros.

"We have a track record of creating efficiencies and driving costs out of customers’ supply chains, which has helped to maintain strong customer relationships with companies big and small," Cox says.

Leveraging an expedited LTL network, Polaris connects every U.S. ZIP code to every Canadian postal code. All of these efforts help Polaris remain at the cutting edge as clients expand their business across the U.S.-Canadian border.

Unique and Positive

Despite shifts in the global political landscape, the long history of cooperation in cross-border trade between the United States and Canada continues.

"Canada and the United States have one of the world’s most unique and positive relationships," says Ray Ramu, executive vice president and chief customer officer for American LTL trucking company Saia Inc.

"We are two sovereign states that occupy the majority of North America and share the world’s longest undefended border," Ramu says. "We are reliant on each other for both security and trade. None of this has changed. Through April 2020,the United States exported more to Canada than to any other country in the world."

Georgia-based Saia maintains 169 terminals that provide service across the country as well as to Puerto Rico, Mexico, and Canada. The company provides complete transportation and logistics solutions and maintains its headquarters in the Atlanta suburb of Johns Creek.

Ramu says the United States enjoys a symbiotic partnership with its northern neighbor. "Growth in the United States translates into growth in Canada and vice versa," he says. "The United States and Canada both have top 10 worldwide economies and I expect that to continue into the future.

"Both Canadian and American businesses, in many ways, are an extension of one another with a border in between," Ramu adds. "We see that in transportation, manufacturing, trade, e-commerce, and communication. The goods and services in both countries are very similar, as are the businesses."

For example, he says, the automotive industry—a major market segment for both countries—is strongly interconnected. "There is significant trade happening in this industry with many major Canadian parts manufacturers feeding the supply chain of U.S. car makers," he says.

Similar but Distinct

While the similarities between the two countries create natural synergies, important distinctions between the two markets remain.

"One fundamental difference between Canadian and American consumers is that Canadians tend to be value shoppers, looking for the lowest price or the best deal as opposed to a particular brand," Ramu says. "This emphasis on finding value stems from historically having less disposable income than Americans and a higher cost of living, among other factors.

"That’s not to imply that American shoppers aren’t searching for the best deal; Canadian consumers just have different approaches to finding and determining value," he adds.

"Canadians, for example, tend to make an extra effort when it comes to finding the best deals as 87% will stock up on their favorite products when the products are on sale, 57% go to multiple stores to get the best prices on items, and 56% regularly participate in retail loyalty programs," he says.

In spite of high internet usage rates, Ramu adds, Canadian consumers have been slower than Americans to embrace online shopping. As such, e-commerce in Canada represents about 10% of total retail sales compared to 12.8% in the United States.

Ramu says that many Canadians are still "touch-and-feel" shoppers who value traditional brick-and-mortar stores. However, he adds, this shopping approach has been rapidly decreasing over the past two years. E-commerce sales in Canada are expected to increase to more than 15% of total retail sales in the next three years.

Cross-Border TIps

Commerce and travel between the United States and Canada is less complicated than many other trade partnerships. However, Ramu recommends these tips for shipping to and from Canada and the United States:

Do your research. Make sure you have taken advantage of all available free resources. Both Canada and the U.S. trade embassies have made shipment and border clearance requirements accessible online.

Remember the paperwork. Missing and incomplete documentation is among the top causes for border clearance delays. As such, shippers need to make sure they fill out all paperwork ahead of time and consult with a broker.

Consider insurance. If you ship high-value or fragile items, consider insuring your shipments.

Keep records. The Canadian Border Services Agency, for example, recommends you keep records of your exports and imports for six years.

Use a trusted service. Use a service with experience in cross-border shipments between the United States and Canada, and have a broker to assist.

Allow for extended transit time. In winter months, for instance, send out your shipment several days early, if possible, in case there are delays.

Finally, Ramu recommends that manufacturers talk to their service provider about shipping to and from Canada prior to shipping to best understand transit times and service expectations, and to clear up any questions they may have.

When it comes to U.S.-Canada trade, the best tips of all may be to know the landscape and be open to opportunities.

Economic RecoverY

"Despite some uncertainty regarding future policy direction, the economic recovery is gaining traction and the American private sector is in great shape with corporate profitability at an all-time high and a record amount of cash," says Export Development Canada (EDC), a Crown corporation dedicated to helping Canadian companies of all sizes succeed on the world stage.

"While it is always good to diversify, the United States is Canada’s number-one global customer, with a market 10 times the size of our own, conveniently located right next door," the EDC explains in its analysis of the U.S. business environment.

In the end, logistics professionals say, success in the Canadian market depends on having a "uniquely Canadian" strategy. Success will come to those who work with logistics partners that understand the differences between the two markets and can effectively navigate through them.

And the picture gets better over time. Some cases in point, from the Office of the United States Trade Representative:

• Canada was the United States’ largest goods export market in 2018.
• U.S. goods exports to Canada in 2018 were $298.7 billion, up 5.8% ($16.5 billion) from 2017 and up 14.4% from 2008. U.S. exports to Canada are up 197% from 1993 (pre-NAFTA).
• U.S. exports to Canada accounted for 18% of overall U.S. exports in 2018.

The top export categories in 2018 were vehicles ($52 billion), machinery ($45 billion), electrical machinery ($26 billion), mineral fuels ($26 billion), and plastics ($14 billion). U.S. total exports of agricultural products to Canada totaled $24 billion in 2018, making Canada our largest agricultural export market. Leading domestic export categories include prepared food ($1.9 billion), fresh vegetables ($1.9 billion), fresh fruit ($1.5 billion), other snack foods ($1.4 billion), and non-alcoholic beverages ($1.1 billion).

U.S. exports of services to Canada were an estimated $61.8 billion in 2018, 5.8% ($3.4 billion) more than 2017, and 36.2% greater than 2008 levels. Services exports were up roughly 263% from 1993 (pre-NAFTA).

Canada is currently the United States’ second-largest goods trading partner with $617.2 billion in total (two-way) goods trade during 2018. While goods exports totaled $298.7 billion, goods imports totaled $318.5 billion.

“The trade relationship between our two countries remains very strong,” says Paul Tessy, senior vice president, Purolator International. “Almost $1.7 billion in goods crossed the border each day during 2018, a rate that marked a 6% increase over the prior year. And this growth came despite a very loud and public discussion about trade issues.”

Purolator International, based in Jericho, New York, about 25 miles from New York City, is the U.S. subsidiary of Ontario-based Purolator Inc., Canada’s leading provider of integrated freight and parcel delivery services. With its feet firmly planted in both countries, Purolator International has an ideal perspective of the financial ebbs and flows by which trade is measured.

“While it is true that exports to Canada were soft in April compared to last year, Canada remains our top export market,” Tessy points out. “That said, there is reason for optimism that this relationship will recalibrate as key trade issues are resolved. We recently saw agreement on steel, aluminum, and retaliatory tariffs, and we’re now seeing momentum on the USMCA.”

A key element of USMCA—otherwise known as the United States Mexico Canada Agreement—that will impact northbound trade is a proposed increase in the de minimis threshold for duties and taxes, notes Tessy. While still awaiting final confirmation, Canada has agreed to increase its de minimis threshold from $20 to $150 (CAD) for duty-free shipments, and the de minimis level for sales tax from $20 to $40 (CAD).

On the Fast Track

Businesses that ship goods that fall below the de minimis threshold do not have to follow “formal entry” procedures. This means a faster and less onerous clearance process for businesses that tend to ship goods valued at less than $150 (CAD), while also being a win for Canadian consumers who shop from U.S. e-commerce retailers.

The U.S. and Canadian markets are not monolithic, of course, and it is important for U.S. businesses to understand key differences—some of which are legal requirements, and some of which are deeply rooted cultural nuances. Canada is officially bilingual, with 23% of the population speaking French at home. In the province of Quebec, almost 95% of the population speaks only French at home. This bilingualism is reflected in Canada’s marketing and labeling requirements. Every label must be listed in French as well as in English, with other requirements (such as measurements) listed in metrics, and Canadian currency valuations.

Pricing is another key consideration. “Products generally cost more in Canada for a number of reasons,” Tessy says. “These include the relatively small size of the market (37 million Canadians versus 327 million Americans), transportation costs, and unavoidable customs fees and duties.”

A business also will need to become familiar with Canada’s sales tax system. All products entering Canada are assessed a 5% Goods and Services Tax (GST). Depending on the province or territory to which a product is headed, a product may also be assessed a Provincial Sales Tax (PST), Harmonized Sales Tax (HST), and/or a Quebec Sales Tax (QST).

Understanding the Market

U.S. businesses can help themselves by taking the time to learn about the “distinctly Canadian” aspects of the market, says Tessy. A good place to start is the “Doing Business in Canada” commercial guide produced by Export.gov, which is the primary U.S. government online resource for businesses interested in export opportunities.

Purolator International also stands ready to help businesses navigate through the thicket. “Purolator International’s strength is that we not only transport shipments to Canada, but we also manage the customs process that moves goods across the border,” Tessy says. “And we then ensure seamless service within the Canadian market.

“We offer comprehensive service from point of pickup in the United States through end delivery in Canada,” he adds. “No other U.S. logistics company can match our Canadian expertise or capabilities in that market.

“As a subsidiary of Purolator Inc., we have access to a distribution network that extends to every province and territory, and enables innovative solutions within the Canadian market,” Tessy notes.

That distribution network is now poised to get even better. Purolator Inc. recently announced a $1-billion growth strategy that includes a new $330-million, 430,000-square-foot national hub set on 60 acres in Toronto, Ontario, set to open in 2021.

It also includes an $8.5-million, 110,000-square-foot terminal in North York that will add up to 135 delivery routes. This terminal will open in September 2019 in time for peak season. These new hubs will allow for faster fulfillment for both courier and e-commerce shipments from the United States throughout Canada.

Canadian consumers also will be seeing more access points, including upgraded retail pickup locations, more Mobile Quick Stop service—which acts as retail outlets on wheels—as well as pilot programs with electric cargo bikes and self-service parcel lockers in downtown Toronto.

“Today’s supply chain has changed,” Tessy says. “Investing $1 billion in our Canadian network will ensure that we continue to offer superior customer service and unmatched delivery capabilities in Canada.

“Our Canadian expertise extends beyond deliveries,” he adds. “For regulatory issues, we take many steps beyond compliance with customs mandates. For example, we encourage qualified businesses to take advantage of Canada’s Non-Resident Importer (NRI) program.”

The NRI program allows participating businesses to collect Canadian sales taxes and brokerage fees at time of purchase. Without NRI status, a U.S. business could face the prospect of its Canadian customer being presented with an unexpected invoice at time of delivery.

Driving Innovation

Purolator International continues to develop innovative solutions to help U.S. businesses succeed in the Canadian market, Tessy says. One such solution, called “CanadaOne,” can be described as an “all of the above” strategy utilizing both ground and air resources. Shipments are picked up in the United States and undergo a consolidation process, whereby smaller shipments are combined into a single larger unit.

The consolidation step adds a high degree of efficiency, since the single unit can clear customs as one unit and incurs reduced customs and brokerage fees.

Once in Canada, shipments enter Purolator’s extensive courier or freight network for final delivery. CanadaOne offers two-day guaranteed delivery to the Canadian market, and is ideal for U.S. businesses that need to provide regular inventory or parts replenishment to their Canadian customers.

Taking Flight

Time is money, and nowhere is that truism more applicable than in logistics, where the objective is to turn days into hours and hours into minutes. That effort is the driving force behind the increasing importance of Rickenbacker International Airport in Columbus, Ohio. The airport, named for legendary World War I flying ace and Columbus native Eddie Rickenbacker, is one of the world’s only cargo-dedicated airports.

The airport’s location provides logistics professionals a decided advantage over airports in more traditional gateway cities. “Columbus is within one-day driving distance of a third of the Canadian population,” says David Whitaker, chief commercial officer of the Columbus Regional Airport Authority, which operates Rickenbacker Airport as well as John Glenn Columbus International Airport and Bolton Field.

“Lots of cross-border trade shipments transit to and from Canada every day,” adds Whitaker, who points out that 48% of the U.S. population is within a 500-air mile radius of the Ohio capital city.

Not only does that radius encompass traditional gateway cities such as Chicago and New York, it also includes Toronto and extends deep into Canada’s population base. “Those are pretty stunning statistics,” Whitaker says, referencing the position of Columbus relative to the North American population.

Those statistics have contributed mightily to Rickenbacker’s growing importance as a logistics launching point and an attractive alternative to more congested sites. The airport plays an essential role in the strength of the Columbus inland port, one of the largest U.S. integrated logistics complexes.

Air Canada Cargo uses Rickenbacker for supplemental lift for its air cargo operation. “They route some Air Canada-sold freight via Rickenbacker International and then truck it to Canada for distribution to their customers,” Whitaker says. He cites Triple T Transport, based in nearby Lewis Center, Ohio, as a trucking broker that works with Canadian trucking companies to move freight between Columbus and Canada.

“We have 20 scheduled flights every week, utilizing six international airlines,” Whitaker says. “The industry remains very interested in Rickenbacker and our activity continues to grow. An important component of that activity is Canadian shipments. We’ve demonstrated that we can work very effectively with ground transportation companies such that border crossings are done seamlessly and do not interfere with commerce.”

in The Zone

At Rickenbacker, the Airport Authority operates Foreign Trade Zone 138, rated among the top 10 FTZs in the country based on the value of goods moving through the zone. “U.S. companies can receive goods into the zone without paying duty,” Whitaker says. “They only pay duty on what remains in the United States and only after it leaves the zone.”

In the past year, AirBridgeCargo, the leading all-cargo carrier based in Moscow, as well as China Airlines, based in Taipei, began serving Rickenbacker. Meanwhile, FedEx, UPS, and other international airlines including Cargolux, Cathay Pacific, Emirates, and Etihad turn to Rickenbacker for its ease of handling.

“The industry is taking note that Rickenbacker is a real solution with fewer headaches for airlines, shippers, and forwarders,” Whitaker says. “We work diligently to make sure the industry is aware of what we offer.”

Located about 13 miles south of downtown Columbus, Rickenbacker Airport features two parallel 12,000-foot runways capable of handling the world’s largest aircraft. The airport, which has a Category I and II Landing System for all-weather landing capabilities, is open 24 hours a day, 7 days a week, 365 days a year. There are no nighttime noise restrictions. U.S. Customs and Border Protection is offered onsite.

The airport is adjacent to the Norfolk Southern Rickenbacker Intermodal Terminal and has convenient access to John Glenn Columbus International Airport, where a diverse mix of air carriers offers more than 150 daily departures to 40 destinations.

Staying Secure

In logistics, the term “border security” has everything to do with opening country-to-country passageways as quickly and efficiently as possible, making border crossings seamless and trouble-free. Given the extraordinarily friendly and mutually respectful trade relationship between the United States and Canada, whether you are moving goods from here to there or from there to here, the stage is set for safe and secure transportation.

Still, following the rules is paramount to success. Polaris Transportation Group, known for its scheduled LTL service between Canada and the United States, brings a quarter-century of expertise in those rules to every border crossing. To ensure safe and secure transit, Polaris participates in every border security program—C-TPAT (Customs Trade Partnership Against Terrorism), PIP (Partners in Protection), CSA (Customs Self- Assessment), and FAST (Free and Secure Trade).

“We were early adopters of all border security programs and have incorporated automatic pre-arrival barcode systems PARS and PAPS to further avoid unnecessary customs delays,” says Dave Cox, Polaris Transportation Group president. “In addition, for some time now Polaris has integrated ACI (Advance Commercial Information) and ACE (Automated Commercial Environment) with direct data connections to Canadian and U.S. border services to better serve our customers.”

Understanding this alphabet soup of programs enables Polaris, which specializes in the shipment of dry goods, to move its modern fleet of trucks without costly delays. The company’s scheduled service connects Ontario and Quebec markets with the United States through a combination of its fleet and facilities along with those of its long-established partner carriers.

“Shippers want to know that their cargo is being handled professionally and efficiently,” says Cox. “From the get-go, we have been at the front of the line. As a small company, we needed to legitimize ourselves by staying on top of the standards.”

Cox refers to Polaris Transportation Group as “an American company headquartered in Toronto.” Based in Toronto’s large neighboring city Mississauga, Ontario, the company maintains U.S. headquarters for Polaris Motor Freight, Inc., in Willoughby, Ohio, just outside Cleveland.

The company also differentiates itself through cutting-edge technology. “We’ve embarked on a journey, not just for ourselves but for digital business lines,” says Dave Brajkovich, chief technology officer. “We’re becoming more of a technology company that has trucks. We’re setting a path for the industry.”

Deriving Data insights

Specifically, that path includes enhancements in artificial intelligence, robotic process automation, machine learning, distributed ledger, and smart contract process. And using integrated APIs rather than documents for more data exchanges enables better communication with customers and partners.

This approach, Brajkovich says, translates into “better, faster, smoother” transmission of information. “We don’t just pass documents, we pass data. That saves a lot of time,” Brajkovich says. “Data has an asset value, and the information we hold is an asset not just for us but for our clients.”

The company’s technology initiatives also include increased use of robotics, which reduces labor and allows people to concentrate instead on the complexities of logistics operations. “We are a focused player, helping tackle the challenging issues of logistics,” Brajkovich says. “We have always been that way.”

“The key is information,” adds Cox. He notes the company’s relatively small size enables it to scale up and back as need dictates.

“Polaris has stayed ahead by understanding the economics,” says Brajkovich, and both he and Cox have a positive outlook on the future of U.S.-Canada trade.

“The relationship will remain strong,” Brajkovich says, adding that trade tariffs and overall economic pressures will not damage the relationship long-term.

For John Costanzo, president of cross-border logistics company Purolator International, this fact underscores the tremendous staying power and resilience of the U.S.-Canada trade relationship—a relationship that currently sees almost $1.6 billion in goods cross the border daily.

“For many reasons, it’s a great time to be engaged in cross-border trade,” Costanzo says. “E-commerce is expanding in Canada at a double-digit rate, Canadian consumers continue to embrace U.S. goods, the border clearance process is highly automated. And, thanks to technology and innovation, it’s possible to have goods reach the Canadian market faster than ever.”

Purolator International is proud of its role in facilitating the growth of cross-border trade. The company maintains facilities in all major U.S.-Canadian trade markets, from which shipments benefit from direct access to the Canadian market, and often arrive in Canada days faster than most competitors’ shipments.

The company is also the U.S. subsidiary of Ontario-based Purolator Inc., Canada’s leading provider of integrated freight and parcel delivery services. That relationship allows Purolator International access to a comprehensive distribution network that ensures delivery throughout Canada, including to the country’s more remote outer provinces and territories.

Leveraging Canadian Expertise

This “Canadian expertise” is an attribute unique to Purolator and something that can’t be overstated, according to Costanzo. “Businesses that currently export to Canada realize that it’s not simply an extension of the United States,” he notes. “Shipments to Canada require a Canada-specific solution.”

For one thing, Canada’s comparatively small population of 36 million people occupies the world’s third-largest geographic area. “It’s as if the population of California was spread across the entire United States, with room to spare,” Costanzo says.

While 80 percent of the population lives in urban areas, and 70 percent within 100 kilometers of the U.S. border, businesses must take special care to reach residents who are not as accessible. Businesses must also take into account that Canada is officially a bilingual country, with 20 percent of residents naming French as their first language. Canada’s labeling laws, which require all information to be listed in both French and English, reflect this bilingualism.

Beyond these demographic differences, businesses must also be prepared for Canada’s unique distribution practices. While U.S. businesses typically assume a carrier will be able to seamlessly deliver shipments throughout the United States, perhaps with exceptions for Hawaii and Alaska, the same is not true in Canada.

In fact, no U.S. carrier offers comprehensive coverage throughout Canada, and most Canadian carriers offer only regional service. This means a shipment often has to be handed off mid-route to a second carrier, and possibly to a third for last-mile delivery.

Purolator International is the exception, Costanzo says. Through its affiliation with Purolator Inc. and its partnership with Canada Post, Canada’s national postal system, Purolator is able to offer seamless service to essentially every address in Canada.

Purolator’s capabilities extend to helping U.S. businesses solve key logistics issues including inventory sourcing, deciding whether a Canadian distribution center is required, and taking the extra steps to ensure all customs-related paperwork is accurate.

“We have many U.S. customers that can meet Canadian inventory needs from DCs located in the United States,” Costanzo says. “This is largely due to the direct service and speed with which Purolator is able to move product into Canada.”

Return to Sender

Those same trucks that move product to Canada are also available to move goods—often in the form of returns—back to the United States. Since returns account for an estimated nine percent of sales—a figure that can jump to as high as 30 percent for certain e-commerce sectors—U.S. businesses selling in Canada cannot overlook the need for a viable, efficient returns process.

“For years, product returns were an overlooked part of the supply chain, but businesses finally see their importance, especially with regard to building customer relationships,” Costanzo says. “I’d like to think logistics efficiency played a role in that.”

Looking ahead, he anticipates logistics will continue to be a driving force. This is especially true as consumers continue to expect faster and more flexible delivery from the businesses they interact with. This demand for improved last-mile service—not only to meet customer expectations, but also to exceed competitors’ capabilities—will increase pressure on logistics companies to find ways to become more efficient and provide increasingly fast service.

“We are up to the challenge,” Costanzo says. “We try to stay one step ahead of customer expectations, and are at the forefront of technology-based logistics solutions.”

A strong logistics program is everything, he says, when it comes to succeeding in the Canadian market.

Behind the Numbers

As any accountant will attest, numbers without context can be misleading. And when it comes to U.S.-Canadian trade issues, there certainly is nuance behind the numbers.

“Looking strictly at data, on the surface we would consider the trading relationship between the two countries to be healthy because there is near parity,” says John Leach, CEO of Montreal-based FLS Transportation Services. “In 2017, the United States recorded a trade surplus of $8.4 billion on $673.9 billion of goods traded.

“However, take into account that many of the goods shipped to Canada from the United States actually originate from other countries,” he adds. “The U.S.-origin trade numbers, reported by the United States, reflect a $17.5-billion, or 2.5-percent, trade deficit with Canada. That is still considered healthy, but could be improved upon.”

Leach says he expects U.S. representatives to leverage those numbers during the ongoing NAFTA negotiations. However, he adds, importers and exporters alike are revealing some anxiety over how trade regulations will impact the profitability of their business and their customers’ experience.

Reconsidering NAFTA, a 23-year-old trade agreement, along with the potential delay in a new agreement, has created minor uncertainty for those designing long-term trade strategy.

“The talks between the administrations, and the ensuing decisions, are critical to the future of Canadian companies, especially those engaged in the steel and aluminum markets, as well as the automotive industry,” Leach says. “Currently, Canada exports almost 90 percent of its steel to the United States, which accounts for about 16 percent of all U.S. steel imports. It also accounts for 41 percent of U.S. aluminum imports.

“Whatever agreement is ultimately decided upon will have to address questions regarding how automotive commodities or other manufactured components cross, and perhaps re-cross, the border several times before they are delivered in a consumable product,” he adds.

Leach views these issues from a broad perspective. FLS operates more than one dozen company-owned offices throughout Canada, the United States, and Mexico. As one of the fastest-growing third-party logistics providers, FLS provides logistics solutions for all sizes of companies across numerous industries.

In addition to its core competency in over-the-road transport, FLS is engaged in providing highly customizable contract logistics functions including warehousing, cross dock, project logistics, and freight management.

Growth Nets Opportunities

The biggest difference between the U.S. and Canadian markets is the sheer magnitude of the U.S. market relative to the size of the population and consumption. More prolific than e-commerce in Canada—an estimated $20.2 billion in 2017 retail e-commerce revenue, growing 42 percent to $28.7 billion by 2021—e-commerce in the United States is estimated to grow 47 percent in the same period to $603.4 billion.

“This level of growth in both countries will create significant opportunities for providers of logistics services,” Leach says.

FLS has been an industry leader in cross-border trade for more than 30 years. Throughout its tenure, the company has tailored its product portfolio and physical network to serve the needs of both Canadian and American clients.

“We customize our resources and unique expertise to help clients navigate international trade and related government regulation,” Leach says.

Whatever geopolitical challenges may linger, he sees growth ahead.

“Opportunities for logistics providers such as FLS are continuing to increase in the cross-border space,” he says. “Trade between the United States and Canada remains strong, and FLS plays a significant role in acting as an intermediary for the transportation of commodities and products in a number of key sectors. The volume of cross-border goods FLS transports—whether by road or intermodal rail—continues to grow as a result of both an increase in market share wins, and steady cross-border trade volumes.”

Leach believes this growth will continue over the next several years, albeit at a more moderate pace, while transportation-related costs will level out by the beginning of 2019. “Looking over the horizon, we expect even more innovative disruption occurring as better technology is introduced that will impact how we trade, and provide better visibility to how goods move through the supply chain,” he says.

Moving Forward

Polaris Transportation Group has seen a considerable increase in cross-border volumes in 2018. Polaris, best known for its scheduled LTL service between Canada and the United States, specializes in the shipment of dry goods. Based in Mississauga, Ontario, Polaris delivers industry-leading transit times to and from the United States including Alaska.

“Polaris has grown for nearly 25 years through simplifying transportation and logistics between Canada and the United States,” explains Dave Cox, the company’s president. “Leveraging an expedited LTL network, and connecting every U.S. ZIP code to every Canadian postal code, Polaris is at the forefront of helping customers expand their cross-border businesses.

“Our customers want fast, reliable service,” Cox adds. “With new markets and new customers on the line, our clients value the cross-border expertise we bring to the relationship.”

To maintain that strong relationship, Cox says, Polaris focuses on keeping pace with the evolutionary nature of logistics.

“As a result of the rapid pace of change and emerging technologies, we use our assets to solve problems in new ways,” Cox explains. He notes particular examples, such as repurposing portions of the Polaris cross-dock network toward e-commerce fulfillment, and expanding the company’s warehousing and distribution capabilities on both sides of the border.

“Moving forward, customers want greater connectivity in their supply chains, which has us investing in blockchain technologies,” he adds.

“Making life easier for the shipping community,” Cox says, is a core company value. To that end, Polaris has developed complementary transportation services, including the specialized movement of trade show displays and exhibits, third-party cross-border and domestic freight management, cross-border and domestic intermodal services, expedited ground and air service, and global air and ocean freight forwarding.

To ensure safe and secure transportation, Polaris participates in every border security program—Customs Trade Partnership Against Terrorism, Partners in Protection, Customs Self-Assessment, and Free and Secure Trade.

In the end, Canada-U.S. cross-border trade thrives for the same reasons any partnership lasts: Built on a strong foundation, both countries protect, nurture, and maintain the relationship through constant attention over the years.