Border Delays Cost Auto Industry CDN$ 1 Million Per Day

At over CDN$ 1 billion per day, U.S.-Canada trade is the largest bi-national trade flow in the world. Border delays cost the automotive industry CDN$1 million per day, notes Stuart Johnston, vice president for policy and government relations for the Ontario Chamber of Commerce. That makes border crossing delays Ontario’s top priority, adds Rocco Delvecchio, Canadian Consul General in Detroit.

Delvecchio and Johnston were part of a trade group touring the Great Lakes area of the United States to discuss a study the Ontario Chamber of Commerce (www.occ.on.ca) had completed, “Cost of Border Delays to Ontario.”

Of the estimated CDN$ 1.2 billion in two-way trade that crosses the U.S.-Canadian border each day 70% moves by truck, making the Ambassador Bridge and Peace Bridge critical links for Ontario where most of that trade is centered. Wait times entering the U.S. range from 10 minutes to four hours, according to the report. Most OCC members responding to the study said they experienced delays of one to two hours every day, with the worst congestion being Fridays between 3 p.m. and 6 p.m.

Border delays have not only increased costs for Canadian businesses, said the report, those companies claim to have lost business as a result of the delays. Based on the fact that 61.3% of bi-directional trade flows from Canada, researchers projected that percentage of the cost of delays onto the Canadian economy – a total of CDN$ 8.34 billion per year (or CDN$ 952,055 per hour). A second and third scenario estimating the amount of cost absorbed by the Canadian economy as 70% and 80% yields a total annual cost of CDN$ 9.52 billion and CDN$ 10.88 billion, respectively.

Setting an agenda for action, the OCC identified the Detroit-Windsor corridor as a top priority, based on the fact that 42% of Canada’s U.S. trade flows through that border crossing. The Ambassador Bridge is reportedly the busiest border crossing in the world with 330 commercial truck crossings per hour (and a peak of 600-700). The bridge is currently operating at 78% of capacity for commercial trucks and 95% of capacity for passenger cars. The study estimates that current truck costs of CDN$ 4.50 per kilometer will increase to CDN$ 15 per kilometer by 2040.

Delays of just one hour cost an estimated CDN$ 40 for the truck and driver. With an average delay of 30 minutes, the 14 million trucks that cross the Canada-U.S. border each year results in a CDN$ 280 million expense for the motor carrier industry. This does not include any additional costs or penalties for late deliveries, the report adds.

The Canadian mission to Great Lakes communities in September is one step in creating what OCC’s Johnston refers to as a Border Management Plan. “Working together with communities like Ohio needs to be comprehensive because the issues are comprehensive,” Johnston told a group of business and government leaders at a Cleveland meeting. “This is a business issue we all have a stake in, it’s not an Ontario issue or an Ohio issue,” he concluded.

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