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Small-business barriers to exporting inspire ‘hackathon’ to improve border procedures

by Ilene Grossman ~ April 2016 ~ Stateline Midwest »
For many small businesses, trying to export goods across the U.S.-Canada border for the first time can be both time-consuming and discouraging. “Its first experience may be its last,” Adam Schlosser says about a business and its initial experience with the “paperwork and difficulties at the border.”
But could there be an “app” to help fix that?
Earlier this year, the U.S. Chamber of Commerce helped organize a “hackathon” in Chicago and Toronto. The goal of the two-day event was to find innovative ways of simplifying customs and border procedures for small and medium-sized enterprises. (A “hackathon” is an event that brings together people who then use their technological skills and creativity to solve a specific problem.)
A Chicago-based team, Trade Sherpa, won the event’s first-place prize. Its application programming interface allows more data sharing to ease the paperwork burden for exporters. Once an exporter creates an invoice, that information would be automatically transferred to a customs form. The data would then be sent to the appropriate government agency and to the firm transporting the shipment.
Schlosser, senior director of the chamber’s Center for Global Regulatory Cooperation, says his organization is now working to connect the hackathon winner with officials at the U.S. Commerce Department.
Smaller firms, bigger challenges
Completing the necessary paperwork and navigating countries’ “divergent rules and processes” are required of all exporters, Schlosser says, but it can be especially burdensome for smaller firms with limited staff and fewer specialists.
Other common obstacles include brokerage and inspection fees; tolls at the border; and delays due to inspections, traffic tie-ups and incorrect paperwork. In a recent survey done by the Canadian Federation of Independent Business, one-third of Canada’s small and medium-sized businesses said they would not have traded across the border had they realized the costs involved (in terms of time and money). About one-fourth of them say border crossing speeds are “poor” (see bar graph).
These smaller firms play a big part in the two countries’ integrated supply chain, one in which manufacturers have reduced their inventories of component parts and are instead relying on just-in-time deliveries.
“Shipment delays cost money,” Schlosser says, “and wait times [at the border] disrupt modern manufacturing practices.”

 

Article written by Ilene Grossman, CSG Midwest staff liaison for the Midwestern Legislative Conference Midwest-Canada Relations Committee.