The following is an article written by Christopher Atz of UPS.
With free trade under relentless attack in certain political
circles, it’s time for a reality check. We shouldn’t shut down
borders. The U.S.-Canada trade lane, for example, is proof of the
transformative power of the global movement of goods.
The U.S.-Canada story is a story of opportunity, one of
neighbors innovating together to tackle challenges requiring
collaborative solutions. As goes the United States, so goes Canada
– and vice versa.
There are a number of reasons that Canada and the United States
rely on one another for future growth.
Canada and the United States share the longest international
border in the world. Roughly 90 percent of the Canadian population
lives within 100 miles of the U.S. border, and for 35 U.S. states,
Canada is the No. 1 export destination.
Many people point to the so-called American Dream, but the
entrepreneurial spirit on display in Canada is similar in many
ways. As the president of UPS Canada, I can attest to this
nation’s diversity. Canada is an ideal melting pot, inviting people
of all backgrounds here to not only chase their business dreams,
but to celebrate their ethnicity and continue ties with the nations
from which they came.
And trade is often the vehicle that puts the Canadian
entrepreneur on the path to global expansion. Here’s why that
journey so frequently runs through the United States.
O Canada and Uncle Sam
If you conduct business in multiple locations, you’re less at
the mercy of your own domestic market. You effectively minimize
risk and give yourself greater opportunities to create wealth and
additional jobs.
For U.S. businesses, there’s tremendous consumer opportunity in
Canada with its 36 million people. And in the age of e-commerce,
businesses have even more incentive to take the plunge into new
markets, especially Canada.
In 2014, retail e-commerce sales in Canada amounted to more than
$25 billion, with e-commerce outpacing brick-and-mortar stores.
By 2019, retail e-commerce sales will reach nearly $50 billion,
thanks largely to goods crossing the U.S.-Canadian border. In
fact, Canada is ranked fifth in e-commerce sales growth – ahead of
the United Kingdom and the United States.
Last year, Canadian e-commerce grew 17 percent, and 43
percent of Canadian e-commerce purchases originated in the United
States. Canada remains an importing nation despite the weaker
Canadian dollar.
As for further growth, the United States recently increased the
de minimis level – the minimum dollar value of qualifying goods
below which no formal customs procedures are required and no duties
or taxes are collected – from $200 to $800 per inbound
shipment. Canada is already a country where U.S. businesses
source raw materials required for their product or service, and now
that has become less costly.
The Canadian consumer
We’re learning more and more about Canadian consumers every day
and as an importing nation, there is great opportunity for U.S.
businesses.
A UPS commissioned survey of online shoppers in
Canada shows that:
- Six out of 10 online shoppers prefer to shop with their
favorite retailers online.
- 73 percent of shoppers review a return policy before making a
purchase.
- 76 percent want e-mail notifications with a tracking
number.
- 65 percent of consumers will shop more with a retailer if they
offer a hassle-free returns policy.
The most successful companies in this export movement are those
that strengthen their supply chains to give their clientele greater
value. For this symbiotic relationship to prosper, however, it
must get even easier to move goods across the U.S-Canada
border.
Customs proceedings, risks, delays and shipment tracking are
just some of the challenges that exporters need to see resolved in
their foreign trade activities. Knowledge
about how to select materials, how to break into new markets and
how to analyze export laws and regulations is a growing requirement
for all companies.
Single window release, for example, would allow the release of
goods without forcing exporters to wait on multiple agencies for
clearance. And extending NAFTA certification beyond one year would
also reduce bureaucratic red tape creating bottlenecks at the
border.
Consumers also want to track their shipment and re-route the
package if needed. This is where UPS, which operates in 220
countries and territories, can help.
The UPS Access Point Network gives your customer the option to
pick up their order at a location near their home or work, ensuring
they don’t miss a delivery or risk having the package left at their
doorstep. UPS My Choice also gives consumers total control
over their deliveries, allowing them to re-route packages as
necessary.
Logistics companies like UPS can also help in the following
ways:
1. Ensure compliance by controlling speed and cost
of inbound shipments.
2. Minimize mistaken return shipments to the wrong
warehouses or repair centers.
3. Create and deliver commercial invoices with
return labels to international customers.
4. Forecast volume and adjust staffing around
inbound returns.
5. Link shipment information directly into your
customer service or warehouse operations.
6. Maximize fast recovery of high-value goods,
before they become obsolete.
Don’t take trade for granted
Early in his first term, U.S. President Barack Obama traveled to
Canada and succinctly described the importance of the
American-Canadian partnership:
As neighbors, we are so closely linked that sometimes we may
have a tendency to take our relationship for granted, but the very
success of our friendship throughout history demands that we renew
and deepen our cooperation here in the 21st century. We’re
joined together by the world’s largest trading relationship and
countless daily interactions that keep our borders open and
secure.
Being European myself, I’ve seen first-hand how trade can
transform entire regions of the world. Throughout my career at UPS,
I have lived in seven countries and have witnessed the power of
free trade.
Some of those countries were located in Europe, and the European
Union has dramatically broken down borders and red tape,
facilitating the seamless movement of goods – the EU has
opened doors to future growth.
As we have seen with so-called Brexit, there is opposition to
this viewpoint. But as financial markets continue to react
negatively to that vote, such sentiment might be revisited.
Ultimately, the important thing to remember is that trade
expands opportunity, trade levels the playing field and trade lays
the foundation for innovation.
The evidence is too overwhelming to suggest otherwise.
Christoph Atz is the president of UPS Canada. As president, Atz
is responsible for the performance and growth of operations across
the country, which includes overseeing more than 12,000
employees.
Reprinted with permission of Longitudes, the UPS
blog devoted to the trends shaping the global economy.
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