Navigating the Border Backlog

By being proactive, supply chain managers can streamline the flow of their products across North America.

By Toby Gooley -- Supply Chain Management Review, 11/1/2005

Since the terrorist attacks of Sept. 11, 2001, the United States, Mexico, and Canada have vowed to make their borders more secure. Border-crossing procedures that had been somewhat relaxed before 9/11 have become tighter, and those that were fairly rigorous have become more stringent. Add to that the growing NAFTA trade and a U.S. customs organization that’s taxed to the limit, and you have a recipe for permanently clogged land borders.

What follows is a look at how those issues are playing out at both borders, together with advice from supply chain managers, customs brokers, and carriers on how to ensure that cargo moves as efficiently as possible throughout North America.

Crossing into Canada
Since 9/11, U.S. Customs and Border Protection (CBP) and Canada Border Services Agency (CBSA) have been working together closely, adopting similar structures and risk-assessment programs. In December, the two agencies released a report detailing their progress. The report outlines such achievements as the opening of dedicated lanes for low-risk cargo and for drivers who have been pre-approved under the Free and Secure Trade (FAST) program. They also vowed to reduce transit times through the congested Detroit-Windsor gateway by 25 percent by the end of this year.

In spite of these actions, problems still remain. An April 2005 report issued by the Ontario Chamber of Commerce, “Cost of Border Delays to the United States Economy,” estimates that border delays are costing both countries more than $10 billion annually. These costs are the result of additional diesel fuel, labor, cargo inspections, and administrative activities as well as lost sales and jobs due to late deliveries.

Some delays can be attributed to closer scrutiny of documentation. The level of detail required has greatly increased, says Robert Armstrong, vice president of government affairs for PBB Global Logistics. In the past, simply describing a shipment as “auto parts” was acceptable. Now, by contrast, customs authorities require detailed descriptions for each item in a shipment, he says. Discrepancies and clerical errors are treated differently now, adds Beth Billingsley, Canada/Mexico team leader for motor carrier Averitt Express. “In the past, if there was a discrepancy we might have been able to fix it after the fact,” she says. “Now, if there’s an error or your customer forgot to give you a piece of paper, you’re going back into the line and waiting until you have it right.”

Staffing levels could also be contributing to cross-border delays. While both customs agencies have hired more agents in the last year, some crossing points may still be understaffed. Armstrong cites the example of the Detroit-Windsor crossing, the busiest on the northern border. “Canada has some 400-odd customs and immigration officers across three shifts at the Ambassador Bridge,” he says. “There were only 71 on the American side.”

Making Things Better in Mexico
On the southern border, changes have not been as dramatic. For one thing, security already was tight because of concerns about drug smuggling and illegal immigration. For another, Mexican law required customs brokers to be responsible for the accuracy of shipment information, so they already were taking some precautions, explains Ernie Valdez, vice president international for Averitt Express.

Furthermore, infrastructure improvements have helped to reduce delays to some degree. For example, the two countries have expanded customs facilities at several crossings, deployed noninvasive cargo inspection equipment, and opened the new commercial traffic-only World Trade Bridge in Laredo, Texas.

Cultural changes also are positively affecting cross-border business, suggests Armando Beltrán, general manager, Mexico for truckload carrier Schneider National. “I think Mexican and U.S. customs authorities are working much closer today than before,” he says. Bernardo Rodarte, international sales and logistics manager, Mexico, for air conditioner manufacturer Carrier Corp., agrees that customs authorities on both sides of the border are better organized, have better processes in place, and are more efficient.

Despite those signs of progress, delays continue. One problem is that few Mexican truckers are FAST certified. “Those that aren’t may have to wait in line five to six hours to cross through Mexican and U.S. Customs [at El Paso],” says Yvette Cheesebrew, district manager of freight forwarder Mach 1. “If they send trucks out of a plant in the early afternoon, we can’t get them here until 7 or 8 o’clock at night, and we miss the airfreight or truck cut-offs to send them elsewhere.”

Advice From the Frontlines
With regulations, infrastructure, and government organizations still in flux, what can supply chain managers do to keep their goods moving as efficiently as possible across the U.S. borders with Canada and Mexico? Here is solid advice from those who face that challenge every day.

Communicate. Don’t wait until another incident occurs and governments clamp down even tighter than they already have. Take action now to ensure that your own internal processes facilitate getting accurate information and shipments where they need to be on time, says PBB’s Armstrong.
This requires having good internal systems and information tools. “Automating documentation helps to eliminate errors and discrepancies, and interfacing export/import systems with materials planning and other internal systems makes it easier to keep on top of changing orders and schedules,” suggests Raul Campos, customs supervisor for auto parts maker Trico Products.

Cooperate. It’s beneficial to participate in programs like the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Business Anti-Smuggling Coalition (BASC). Doing so can prove to customs authorities that you are a low-risk shipper, says Rodarte. “Don’t just fill out the paperwork; take those responsibilities very, very seriously and live the programs’ principles,” he recommends.

Educate. Keeping up with the latest requirements for all three countries can be difficult as cargo security rules and restrictions are a moving target these days.  Not knowing, however, is not an option, according to Beltrán. “Invest the time, energy, and resources needed to be aware of and comply with changing requirements,” he says. “Work with service providers that do the same, and make sure everyone in your North American supply chain is sharing up-to-date information.”
It’s not just your own internal staff that you need to educate. “Make sure your suppliers, transportation providers, and customs brokers in Mexico understand U.S. and Canadian Customs’ new information requirements and that they will be able to comply with those rules. A trip to the border for face-to-face meetings could be necessary,” says Daniel B. Hastings, Jr., president, Daniel B. Hastings Customs Brokers.

Choose Your Partners Wisely. Choosing the right service provider is a key step towards smoothing your border crossings.  Valdez and Billingsley, of Averitt Express suggest working with service providers that are committed to complying fully with security programs and to educating both their own personnel and their customers. Providers with good programs will have formal, mandatory training for drivers on border-crossing procedures; training seminars for customers; and dedicated service and support teams to help shippers and drivers at both borders.

It’s also worthwhile to work with a carrier that’s approved for the FAST program. Although it takes time and money, being FAST-certified can make a significant time difference at both borders, says Cheesebrew.

In spite of all these efforts, security-related logjams could get worse before they get better. But shippers can take heart that technological innovations and infrastructure improvements now under development—together with increasing cooperation and harmonization of practices among U.S., Canadian, and Mexican customs authorities—should eventually bear fruit. That could be a long way off, though, so for now, optimizing compliance under current conditions while preparing for future procedural changes is the smart route across both borders.

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