Paperwork and Procedure, Not Patrols, Causing Costly Delays at Canada-U.S. Border

Key Findings

* 70% of Canadian companies believe exporting is critical to their business

* 75% have experienced some delay in exporting, and one-quarter say this happens to 50% or more of their shipments

* 75% say that shipments are held up waiting in line at the border, and for processing and examination at customs

* 62% admit that delays are often caused by faulty paperwork and providing incorrect information to customs

TORONTO , Sept. 28, 2005 – A lack of understanding of customs rules and procedures among Canadian companies is adding to unnecessary delays at borders, according to a study of Canadian exporters’ views on cross-border trade commissioned by FedEx Express Canada.

The study, conducted by Léger Marketing for FedEx, found that the vast majority of Canadian companies believe exporting is critical to their business. However, three quarters of Canadian exporters have their shipments held up at the border occasionally, while a quarter said this happens to at least half of their shipments.

Respondents stated that shipments are frequently held up waiting in line at the border for processing and examination at customs, often because of a glut of faulty paperwork and incorrect information provided to customs.

“One quarter of exporters indicated that they’ve noticed an increase in delays at the Canada-U.S. border, which they attribute to a growing list of regulations designed to strengthen border security,” says Dave Scholz, vice president, Léger Marketing. “Furthermore, these delays often take more than a day to clear up and have a number of adverse effects on companies, from lost money to damaged reputation.”

According to a report from the Ontario Chamber of Commerce, a conservative estimate of the negative impact of border delays on Canada is CDN $8.34 billion a year, or $952,000 per hour [1].

“More than CDN $1 billion in trade crosses the Canada-U.S. border everyday,” said Len Crispino, president and CEO, Ontario Chamber of Commerce. “Businesses and individuals alike rely on the border to be efficient and timely, allowing for the free flow of people and goods between Canada and the U.S. Any delay at the border has a ripple effect throughout the entire economy.”

The FedEx study also found that most exporters are unaware of upcoming changes to government regulations and, when asked, were not able to correctly identify when information for their shipments must be received by customs.

Although the vast majority of companies said they experience delays at the border, only one-third said they find shipping to the U.S. to be difficult.

“These responses suggest that too many Canadian exporters are hampered by border delays,” says Rajesh Subramaniam, president of FedEx Express Canada. “Exporters feel that these delays, as well as increased security measures, are a necessary evil of the cross-border economy, but it doesn’t need to be that way. There are government programs and FedEx services in place that can ease these delays – without compromising security.”

When asked about the FAST (Free and Secure Trade) program, a joint effort by the Canadian and U.S. governments to help move pre-approved goods across the border quickly by verifying trade compliance away from the border, only 38% knew about the program.

Despite an overall lack of awareness, when the FAST program was explained, 81% agreed that a shipper should be FAST certified and 71% said it would influence their decision when choosing a service provider.

“By becoming FAST certified and using a transportation provider that is FAST certified, importers and exporters could cut down their border delays significantly, saving time, money and frustration,” says Subramaniam. “There is definitely a need for more education about these programs in the industry. FedEx has seen the value in FAST certification, as we are able to move shipments into Canada in a timely manner, ensuring all regulations are met and the paperwork has been completed properly.”

The FedEx Canada Cross-Border Shipping Report is based on a nationwide telephone study of 404 Canadian businesses exporting products to the United States . Results can be considered accurate to within +/- 4.9%.

About FedEx Express Canada

Federal Express Canada Ltd. is a global logistics and transportation company offering domestic and international shipping and electronic commerce solutions. The company uses real-time package status tracking systems, automated customs clearance services and a dedicated air and ground transportation network to serve Canadian and global markets. FedEx employs approximately 5,000 people in over 60 facilities coast-to-coast. For more information, visit fedex.ca.

About FedEx Trade Networks

FedEx Trade Networks is a provider of customs brokerage, global ocean and air cargo distribution, trade and customs advisory services, information technology, and trade facilitation solutions. With over five million entries filed annually, FedEx Trade Networks is one of the largest-volume customs entry filers in North America . FedEx Trade Networks employs more than 3,300 people at 17 locations in Canada , and 53 locations in the United States . More information about FedEx Trade Networks can be found at ftn.fedex.com.

About Léger Marketing

Léger Marketing is one of the largest Canadian-owned research groups in Canada . Léger has offices in Toronto , Winnipeg , Montreal , Edmonton and Quebec City , as well as New York , Philadelphia , Shanghai and Casablanca . Léger Marketing is also the Canadian representative of the prestigious Gallup International Association.