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Sharon Oosthoek | March 6, 2017
Imagine for a moment you are a business owner competing with a firm in Ohio to sell your product to a customer in Michigan. You may be able to match the competition’s quality, productivity, service, and price. But you have to do better than that because you have the border to deal with and the person in Ohio doesn’t.
Enter Bill Anderson. The director of the University of Windsor’s Cross-Border Institute wants to level your playing field by answering a deceptively simple question: “How can we make the border work better?” With a newly installed U.S. president skeptical of the benefits of international trade, the question is more timely than ever.
Currently, most goods pass between Canada and the U.S. tariff-free. But they are still subject to inspection and paperwork, and everyone who helps move those goods must pass immigration and security screening. All of this takes time and none of it is cheap.
As the Ontario Research Chair in Cross-Border Transportation Policy, funded by an endowment from the government of Ontario, Anderson has delved deeply into this topic. His research shows trucking goods across the border—the most common form of transport—boosts costs by 15 to 40 per cent, compared to moving the same goods the same distance domestically.
What truck traffic tells us
Reducing that expense and the hassles of border crossings could have significant payoffs. Almost 80 per cent of Ontario’s exports go to the U.S. Canada is in turn the largest destination for U.S. exports, with Ontario taking more than half of them.
Much of this trade crosses bridges at the international border between Ontario and the U.S., with the Windsor-Detroit Ambassador Bridge handling the lion’s share. It accounts for more than 2.3 million truck crossings a year.
Even when goods travel from Asia or Mexico via boat or rail, the last leg of the journey is almost always on a truck. Which is why Anderson and his team are paying particular attention to truck traffic between Ontario and the U.S.
Understanding how trucks move across the border and predicting their future movements can give us a good handle on how our economy is performing. It also gives us insight into when and how to intervene to make sure trade flows smoothly.
Anderson has come up with a novel way of using GPS data to keep track of all this traffic. While freight carriers have been using GPS to track their trucks since the late 1990s, they don’t collect data with an eye toward understanding what happens when trucks stop. Is it making a delivery, or is the driver having dinner or catching some shut-eye?
It’s important to understand the difference. “Once you filter out stops for food and fuel, you have your origin and destination points,” says Anderson. “Then you can figure out what industries are involved—what’s going from where to where.”
Not only does this help build a picture of Canada-U.S. trade, knowing where the demand is for specific products has commercial value.
Researchers traditionally differentiate between a pit stop and a delivery by interviewing truckers. But this approach takes time and money, and it relies on people’s imperfect ability to recall events. Anderson and his team have come up with a more accurate and cost-effective system: They calculate an entropy number for each stop.
Entropy is a measure of disorder, so if GPS data show a given stop attracts a large number and diversity of trucks, it gets a high entropy number. A lot of trucks from various carriers in one place suggests a pit stop for food, fuel, or accommodation. In contrast, one or two trucks stopped at a particular location yields a low entropy number, indicating a deliver stop.
Just to make sure, Anderson and his team cross-checked locations with high entropy numbers with Google maps. As expected, they found that of the 150 locations with the highest entropy numbers, 148 corresponded to truck stops, gas stations, or motels.
Heads up on border slowdowns
He and his team are also working on making better predictions for border crossing times, even several hours in advance of reaching a bridge.
“It’s possible to find the time for crossing right now,” says Anderson. “But we’d like to make a prediction that tells a driver in London, Ontario, which is 190 kilometres from the border, what to expect when they get there.”
Armed with such information, the driver can then decide whether to take the Ambassador Bridge or divert to the Blue Water Bridge connecting Sarnia, Ontario to Port Huron, Michigan. Anderson’s team is in the midst of building an algorithm that can work with complex and variable information, including the number of trucks between the driver and the bridge, accidents, weather, computer system breakdowns, and the number of lanes open at the border.
These last two variables touch on another area of Anderson’s research: the resiliency of our border crossings and the need to build in redundancy, such as the new bridge downriver from the Ambassador, approved by the Canadian and U.S. governments.
As Anderson puts it: “If there is a flu epidemic in Detroit and three customs officers call in sick, that could back up traffic significantly.”
That in turn could wreak havoc with just-in-time supply chains, including automotive plants on one side of the border waiting for parts from the other side.
“The level of co-ordination is really interesting. The parts delivery has to happen during a precise window—not just Thursday, but between 10 and 11 a.m.,” he says.
And if Anderson has anything to do with it, those parts will make it to the assembly line right on time.
As President Donald Trump sat down for breakfast with chief American auto executives Tuesday morning a Windsor Ont., cross-border expert said he’s concerned about what trade changes could mean for Canada.
“I want new plants to be built here for cars sold here,” Trump tweeted around 6 a.m., announcing his sit-down with the chief executives of General Motors Co., Ford Motor Co., and Fiat Chrysler Automobiles.
Although members of Trump’s team, including his chief economic advisor Stephen Schwarzman, have warned that Canada shouldn’t be too worried about the talks, Bill Anderson of the University of Windsor’s Cross-Border Institute, said there’s no way American trade decisions won’t bleed over into Canada.
“Whether Canada will be able to get exceptions to any rules that are put in place to try to prevent jobs going from Mexico to China, I think that’s going to be very hard to do,” explained the CBI director. “I think it’s going to have a negative impact on Canada.”
After his breakfast with the auto executives Trump, flanked by the CEOs of GMC and FCA, said he wanted auto plants built in Americans and promised the U.S. would be “very hospitable” to investors.
“We’re going to make the process much more simple for the auto companies and for everyone else who wants to do business in the United States,” he said.
Anderson has been carefully watching the first few days of Trump’s presidency and said the President’s plans to renegotiate the North American Free Trade Agreement could be “very disruptive.”
“No other country in the world is as highly dependant on trade with the United States, so if there’s going to be a massive change in the American trade regime and trade regulations in the United States it’s going to affect Canada in a very big way,” he added.
Good reasons for good trade relations
According to Anderson, there are logical reasons behind the U.S. and Canadian’s close trade ties and even if NAFTA was to fall apart there could still be a basis for the countries to work together.
But it will be up to the Canadian government to make sure America doesn’t forget its northern neighbour.
“I don’t think it’s going to be very high on the agenda of the people in Washington to make sure Canada doesn’t get caught up in these trading changes,” he said.
Canada has to keep up
With Trump wasting no time in following through on his promise to leave the Trans Pacific Partnership Anderson said Canadian officials will have to work quickly to keep up.
“The pace of change over the next year could be incredibly fast,” he said, adding that trade deals are typically arranged in a process that takes years. “I don’t think President Trump has that kind of patience … so I think the Canadian government is going to have to be very quick on their feet so they don’t get caught up.”
with files from Lisa Xing and NBC
CBI’s Bill Anderson talks with CBC about Canada’s manufacturing sector and what President Elect Trump could mean for manufacturing in Windsor. Click here for the story!
Predicting exactly when the Gordie Howe International Bridge will open is a “mug’s game,” Windsor-Detroit Bridge Authority interim chairman Dwight Duncan said Wednesday.
But it should be easier once a project contractor is selected in 18 months, he said after giving a luncheon speech at Windsor-Essex Regional Chamber of Commerce annual meeting.
The initial target was 2020, which now seems unlikely, but Duncan is declining to speculate how much further into the future the bridge completion date has been pushed.
“It’s human nature to want to know when is everything going to be ready,” he said. “I do, too. We will have greater clarity once we select our proponent.”
The Windsor-Detroit Bridge Authority — which will oversee construction — last month launched the final stage of the project. Three global consortiums that were shortlisted earlier this year will now assemble their final bids and designs for the bridge.
The bridge authority should have selected a preferred contractor by the end of 2017 and will then spend another six months securing a final contract and project financing.
Construction should begin almost immediately afterwards — sometime in the summer of 2018. It was previously estimated to take at least 42 months to complete.
“It will be done when it’s done,” Duncan said. “You are not going to get a date from me. Once we have an operator, somebody who knows what it takes to build a bridge, we will have better insight.
“There are going to be surprises (during construction) where they find things that make it more difficult, but they also might find shortcuts. We will keep our fingers crossed that they can do it in three years instead of four.”
The bridge authority also announced Wednesday it will spend $1 million for an economic impact and opportunities study to be conducted jointly by the University of Windsor’s Cross-Border Institute and Michigan State University’s Canadian Studies Centre.
The study will determine how many jobs the bridge construction project will create. It will also identify jobs and corporate investment that could be attracted to the region after its completion.
“There will be a great deal of emphasis on supply chains,” said Bill Anderson, director of the Cross-Border Institute, who guessed the study’s findings should start to be released in 2018. “Having the new bridge and improved quality of accessibility will have an impact on the auto and agricultural sectors.”
The most important aspect of the study will be identifying new economic investments that the bridge could bring to the Windsor-Detroit region, he said.
It is estimated the bridge project could cost up to $4 billion. The bridge authority will select the private sector operator, which provide the bulk of the financing and then recoup the money from tolls.
The project includes construction of new international crossing over the Detroit River, plazas on both sides of the border and a two-kilometre feeder road in Detroit that will link with the I-75 freeway.
A $50-million site preparation project in Windsor — which includes covering the area with one million tonnes of gravel, installing drainage, relocating utilities and building a new local road around the plaza — is nearing completion. Property acquisition on Detroit side is more than 50 per cent complete.
The next major undertaking and contract related to the project will be relocating hydro towers and power lines that cross the Detroit River at the Howe bridge location. Bridge authority officials refused to say Wednesday when that might begin.