U'S' Canada Border Economic Costs

1
U.S. - Canada Border Economic Costs

• A Study Conducted by Dr. John Taylor and
  Associates for FHWA, MDOT and NYDOT
• June 2003

2
Introduction

• Report documents border and related costs
• Examines levels of trade and traffic over time
• Reviews causes of long border crossing transit
  times and uncertainty
• Reviews possible short and long term solutions
• Evaluates external perimeter strategy in
  comparison to further tightening the border
• Purpose is to provide a factual foundation for
  cost-benefit analysis of various options

3
Methodology

• Secondary literature review
• 750 articles
• 45 border reports
• Multiple site visits to seven crossings
• Traffic data from 1984 and monthly data pre to
  post 9/11
• Primary inspection transit time (backup) data
  from Canada Customs for both directions
• 173 personal interviews of key organizations/perso
  ns
• Estimation of border related costs by impact
  category and in total
• Analysis of border management options

4
Key Findings

• Total border related cost impacts are estimated
  at US10.3 billion at the mid-range, or 2.70 of
  total 2001 U.S.-Canada trade in goods of US382.0
  billion.
• The total border costs related to trucking are
  estimated at US9.45 billion at the midrange, or
  some 4.02 of total truck trade

5
Findings

• Transit time and uncertainty costs, specifically,
  total an estimated US4.01 billion.

6
Findings

• General border management related costs for
  federal staff, manufacturers and carriers totaled
  an estimated US6.28 billion.

7
General Border Costs and Grand Total (Millions of
Annual US)
8
Transit Time and Uncertainty Related Impact
Summary (Millions of Annual US)
9
Truck Primary Transit and Secondary Processing
Cost Impacts(Millions of US)Table 4
10
Primary Inspection Transit Time Costs

• A key cost category relates to primary inspection
  transit time (backup time) costs
• Costs were estimated using transit time data
  collected by Canada Customs. Sample of daily data
  from May 1 to August 31, 2002
• Average backup times were used as a sample and
  applied to annual traffic to arrive at total
  backup hours
• Using a cost of 150/hour total backup, costs
  were estimated