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>June 4, 2010

Canadian SMEs find that their customs broker provides a valuable service

The Canadian Federation Of Independent Business recently published the results of a survey of 6,097 owners of small and medium-size businesses (SMEs) concerning their perception of commercial customs clearance at the Canada - United States border.

SMEs are increasingly dependent on a secure and open border for their livelihood and, unfortunately, major events of the current decade (9/11, BSE, SARS) have made it harder for all businesses to trade across the Canada/US Border.

The business owners were asked to rate the efficacy of new programs aimed at facilitating cross-border trade (i.e. NEXUS, FAST); satisfaction with border services; inspections and broker services.

The survey offers mixed results, especially concerning the SMEs' perception of customs authorities on both sides of the border.

However, the results demonstrate significant satisfaction towards the services of customs brokers:

"Given all the changes that companies have had to deal with in recent years, not to mention the less then stellar service they receive at the border, it is no surprise that there is a high level of satisfaction with customs brokers who can help small businesses navigate through the border maze.

More than two-thirds of businesses were satisfied with their broker services, while less than a quarter were somewhat or very dissatisfied. It is no surprise that on a sectorial basis, it is those industries most likely to be involved in trade that are the most satisfied with their broker services which includes manufacturing (80 percent), primary/resources (79 per cent) and wholesale (78 per cent) businesses.

Customs brokers provide a valuable service, especially to those companies that trade on a regular basis, as they can eliminate a lot of the headaches and uncertainties that a business can run into if they try to do it on their own.

However, there is some frustration among those companies that may be involved in importing or exporting on a less frequent basis, or deal in low volumes, as the process is just as complicated as it is for frequent shippers and high volume shipments."

In its conclusion the report states that "Finding ways to facilitate and even encourage trade among Canadian SMEs will not only benefit the Canadian economy but may also go a long way in bringing new products and innovation to US and Canadian consumers, create new opportunities for American and Canadian companies, and create jobs on both sides of the 49th parallel."

The report makes several recommendations to improve crossborder movement of goods and people. One interesting recommendation is for the Canada Border Services Agency to consider implementing a program for low-risk small and medium-sized importers that would be somewhere between Customs Self-Assessment (CSA) and Advance Cargo Information (ACI) that would include a more flexible form of PIP (Partners in Protection) and use of FAST lanes. Similarly, the U.S. border officials may want to consider a more flexible variation on C-TPAT that recognizes the more limited means of smaller companies.

Trade without Borders -- A small business report card on the Canada/US border.