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July 07, 2014

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SURFACE & DOMESTIC TRANSPORTATION THE JOURNAL OF COMMERCE 63 By Mark Szakonyi CANADIAN TRUCKING INTERESTS are blasting a U.S. proposal to more than double fees Cana- dian truck drivers pay to cross the border. Canadian truck drivers would see their annual transponder fees jump from $105 to $320 under a U.S. Department of Agriculture proposal to increase its Animal Plant and Health Inspection Service fees. With the addi- tion of the Customs and Border Protection fee, Canadian truck drivers would have to pay $420 annually to cross the border into the United States. The cost of making a trip to the U.S. for trucks without a transponder would rise from $10.75 to $13.50. The fees would apply to Cana- dian trucks that haul agriculture and food shipments, which must be cleared by the USDA, and to those hauling non-per - ishables. The USDA said the increase is needed to cover the cost of operating its Agriculture Quarantine Inspection program. The proposed fee hike is "excessive" and particularly unfair to trucking compa- nies hauling empty trailers or loads that the USDA doesn't need to clear, the Canadian Trucking Alliance said in a statement. The fee, it added, might be illegal under the North American Free Trade Agreement, because the 20-year-old trade pact forbids customs user fees. Additionally, fees and charges can't "represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purpose" under the General Agree- ment on Tariffs and Trade, the predecessor to the World Trade Organization and an agree- ment Canada and the U.S. have signed. "APHIS's approach is diametrically opposed to ever y thing we have been told over the last decade in terms of a more efficient and secure border," CTA President David Bradley said in a statement. The CTA, which represents about 4,500 carriers, owner-operators and industry sup- pliers, also disagrees with APHIS for not taking a risk-assessment approach to inspec- tions, meaning members of U.S. Customs' trusted trader program don't receive any benefit despite being able to show authori- ties that their supply chains are secure. The group also criticized APHIS for not using advance cargo information to determine whether a truck was hauling a shipment that needed to be inspected or whether it was something out of APHIS's purview. "Goods that present no risk should not be subject to APHIS fees," said the CTA, which filed a comment June 19 in response to the USDA's proposed rule-making notice. It is also unfair for the USDA to look for money via fees when there isn't enough pressure on APHIS to more effectively use the funding it has, the alliance said. Because the proposed fees would become immediate, trucking companies wouldn't be able to pass the increased costs onto shipper customers, tightening motor carriers' already slim mar- gins, the CTA said. "The lack of consideration to the reali- ties of the industry is shocking," the alliance said. JOC Contact Mark Szakonyi at and follow him on Twitter: @szakonyi_joc. A CROSS-BORDER DOUBLE-CROSS? Canadian truckers criticize U.S. proposal to double APHIS inspection fees while tonnage is falling" in the long-term, a sign products and packaging are more com- pact and lighter. The LTL sector also is benefiting from tight capacity in the truckload business, Ross said. Because truckload carriers, from owner-operators to giants such as Swift Transportation and Schneider National, dom- inate the trucking landscape, it doesn't take much spillover from truckload trailers to LTL docks to make a big difference in LTL revenue. If even 1 percent of the truckload freight were broken down, palletized and shipped by LTL, total LTL revenue could increase by more than $3 billion, or nearly 9 percent, Ross said. Tightening truckload capacity also is strengthening LTL carriers' hand in pricing negotiations with customers. Ross expects the current rate momentum to continue through the end of the second quarter, at least. In the long term, LTL carriers should retain their pricing advantage "until the next recession," he said. Shippers at the SMC3 conference said finding ways to con- trol rising U.S. transportation costs is their primary concern this year. One major roadblock for LTL carri- ers and their customers is the tightening market for truck drivers. Once primarily a long-haul truckload issue, the so-called driver shortage now affects every type of trucking operation, speakers at the SMC3 conference said. "This is everyone's problem," Welch said. During his stint as president of Yellow Transportation from 2000 through 2007, "we never had driver recruiters," he said. At YRC, a Teamsters company, "we were always able to attract drivers because of our benefits and pay." That's not the case post-recession, he said. "We have several recruiters now. "If the economy shows improvement, I do believe capacity is going to be a real issue," Welch said. "Customers and carri- ers are going to have to form new kinds of relationships. The days of abusing the car- rier over rates are in the past." JOC Contact William B. Cassidy at and follow him on Twitter: @wbcassidy _joc. "Goods that present no risk should not be subject to APHIS fees."

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