E-commerce trade between the USA and Canada is growing but delivery issues in cross-bordershipping between the two countries remain, according to a survey of US exporters commissioned by
Purolator International.Cross border trade between the United States and Canada exceeded $616 billion last year, with agrowing number of US businesses tapping into Canada’s growing e-commerce market. Goods worth $292billion were exported to Canada from the USA last year.
E-commerce will be one of the driving factors in this cross-border trade. Canadian online salesare expected to grow at an annual rate of 10%, and surpass $32 billion by 2018.
Conducted by Peerless Research Group (PRG) on behalf of Logistics Management magazine forPurolator International, the new study “Canadian e-Commerce Presents New Opportunities for U.S.Businesses” surveyed more than 200 US businesses currently exporting to Canada.
It found that the majority (65%) expects their sales from Canadian trade to increase over thenext two years but four in ten respondents (40%) have experienced problems at some point whenshipping from the USA to Canada.
The top issues named by the respondents include cross-border delays (63%), customs-relatedissues (63%), transit time delays (47%), incomplete/incorrect customs paperwork (47%) and paperworkvolumes (31%). Other common problems stated are non-compliance with customs regulations (28%),unexpected expenses (22%) and tracking multiple parcel handoffs (19%).
“These findings underscore several of the challenges inherent in shipping goods to the Canadianmarket,” said John Costanzo, president of Purolator International, a leading provider ofU.S./Canada cross border logistics. “Many US e-commerce companies fulfilling Canadian orders forthe first time often underestimate the complexity of navigating the border clearance process, thebroad geography of the country, and the challenge of efficiently processing their returns andimporting them back to their US distribution centers.”
The problems in cross-border shipping often result in dissatisfaction on the part of Canadiancustomers, increase in complaints and returns, delays in supplies to fulfillment centres and risingcosts due to the need for additional manpower, excess paperwork etc, the study showed.
“The first step in overcoming these challenges is to recognise that transferring the methods andpartners used for fulfilling orders in the USA will not generally work as well in the Canadianmarket, and that it is very important to take the time up front to select a logistics provider withan established national Canadian delivery network and proven experience in serving the Canadiane-Commerce sector,” Constanzo added.
The survey also revealed that B2B and B2C manufacturers in the USA believe that their level ofservice to the US customers is higher than the service to the Canadian customers. While 93% of therespondents rated their US service as excellent or very good, only 73% could say the same abouttheir service to Canada.
To counter the cross-border issues, the majority of businesses surveyed (7 out of 10) rely on athird-party such as a customs broker (39%) or a logistics provider (30%). Among the reasons forusing brokers or logistics providers to handle their cross-border procedures, shippers nameexpertise in export documentation and paperwork, ability to obtain pre-clearance for shipments aswell as technology and ability to use electronic data when shipping.
