New Study Finds Logistics Concerns for U.S. Businesses Tapping Into Canadian eCommerce Market

Dawn Downes October 21, 2013

Cross border trade between the United States and Canada exceeded $616 billion last year, with a growing number of U.S. businesses tapping into Canada’s surging eCommerce market.  Canadian online sales are expected to grow at an annual rate of 10 percent, and surpass $32 billion by 2018.   But a new study finds that many U.S. businesses have experienced significant issues in reaching the Canadian market.  As a result, B2C shipments have faced unexpected problems with border clearance, and frustrating delays meeting customer delivery expectations.

The study, “Canadian eCommerce Presents New Opportunities for U.S. Businesses,” was conducted by Peerless Research Group on behalf of Logistics Management, and focused on more than 200 U.S. businesses that currently export to Canada.   The survey found that while an impressive 65 percent of respondents expect their volume of Canadian sales to increase over the next two years, almost 40 percent have experienced some degree of difficulty in shipping to Canada.

“Our research shows that while there are strong opportunities for growth in the Canadian market, there are significant logistics challenges to take into consideration,” said Michael Levans, Group Editorial Director, at Peerless Media.  “Those challenges include border compliance issues, unexpected delays, and transit issues, and can have a direct impact on businesses’ bottom lines.”

Among the top concerns of respondents who experienced problems:

  • 63 percent reported border delays;
  • 63 percent experienced customs-related issues;
  • 47 percent experienced transit time issues;
  • 47 percent reported incomplete/incorrect customs paperwork; and
  • 31 percent cited the volume of required paperwork.

 

“These findings underscore several of the challenges inherent in shipping goods to the Canadian market,” said John Costanzo, president of Purolator International, a leading provider of U.S./Canada cross border logistics and the study’s sponsor.  “Many U.S. eCommerce companies fulfilling Canadian orders for the first time often underestimate the complexity of navigating the border clearance process, the broad geography of the country, and the challenge of efficiently processing their returns and importing them back to their U.S. distribution centers.

“The first step in overcoming these challenges is to recognize that transferring the methods and partners used for fulfilling orders in the U.S. will not generally work as well in the Canadian market, and that it is very important to take the time up front to select a logistics provider with an established national Canadian delivery network and proven experience in serving the Canadian eCommerce sector,” he added.

The survey also found that while 93 percent of respondents give themselves high marks for their ability to service their U.S. customers, only 73 percent can say the same about how they service Canadian customers.   That service gap was evidenced by Canadian consumers who cited high shipping costs (40 percent); problems with returns (26 percent); damaged merchandise (14 percent); and unexpected shipping costs (22 percent) as top concerns with their U.S. service providers.

About Peerless Media and Peerless Research Group

Peerless Media produces industry-leading publications and websites – Modern Materials Handling, Logistics Management, Supply Chain Management Review and Material Handling Product News – for the supply chain, logistics and materials handling markets.   As a division of Peerless Media, Peerless Research Group specializes in marketing and media research solutions for materials handling, logistics and supply chain marketers.

About Purolator International

Purolator International is a subsidiary of Purolator Inc., Canada’s largest integrated parcel and freight delivery services provider. Purolator International specializes in the air and surface forwarding of Express, Freight and Parcel shipments, customs brokerage, and fulfillment and delivery services to, from and within Canada.  Purolator International was recently selected as a Great Supply Chain Partner by Supply Chain Brain magazine.

In addition to facilities throughout New York, Purolator International has locations in key U.S. and Canadian markets including Atlanta, Baltimore, Boston, Buffalo, Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Dallas/Ft. Worth, Denver, Detroit, Houston, Indianapolis, Los Angeles, Miami, Milwaukee, Minneapolis, Montreal, Nashville, Newark, Philadelphia, Phoenix, Pittsburgh, Raleigh/Durham, Salt Lake City, San Diego, San Francisco, Seattle, Saint Louis, Toronto, and Vancouver. 

For more information about Purolator International, visit www.purolatorinternational.com.

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