The COVID-19 lockdown and the ensuing U.S.-Canada border closure to all non-essential travel has driven e-commerce shipment traffic to all-time highs, officials in the customs brokerage industry said.
That phenomenon is creating significant opportunities for customs brokers to offset drops in conventional Canada-U.S. trade shipments - but also backlogs and increased wait times for delivery.
Graham Robins, president and CEO of A & A Customs Brokers, said the conventional, large-importer side of his business was down about 25% in April versus the same period last year - numbers that were in lockstep with numbers from the Canada Border Services Agency, which reported 1.26 million shipment releases into Canada during that month (down from 1.7 million in April 2019).
However, Robins also noted that A & A’s BorderBuddy brand - which handles specifically e-commerce and online purchases from consumers directly - saw in April a 35% spike in business, a trend that has not subsided since.
“That business has just gone crazy,” Robins said, who noted the initial catalyst for the boost in business was the lockdown itself and not the border closure. “… We just felt that people were stuck on the computer, and many people just decided they might as well order something - whereas a lot of them normally would have just gone to the store. Calls about quotes doubled in the week after everything was shut down.”
Since then, however, the U.S.-Canada border closure (now extended to at least June 21) has significantly altered Canadian consumers’ shopping habits when it comes to buying goods online - often from U.S. companies or distributors. Those behavioural changes are now fueling e-commerce shipping across the border, Robins said.
For instance, a large portion of Canadians buying online often make their purchases with retailers who don’t ship to Canada. These retailers - many of whom can be found on Amazon.com, where Canadian shoppers frequent when they cannot find what they are looking for on Amazon.ca - then ship the orders to mailbox houses on the U.S. side of the border, most often in Blaine, Wash. for the Metro Vancouver market.
Now, with the border ban in place, Canadians who usually make the 45-minute trip to Blaine to pick up their orders suddenly have no capability to do so. This has lead to the rapid growth of services like BorderBuddy, which now offer the service of picking up packages from Blain mailbox houses, crossing the border as an import shipment then delivering the goods to consumers in Canada.
“We literally had a case over the [Victoria Day] long weekend where a client had a canoe he couldn’t get across, and he wanted to go canoeing that weekend - he could only get it to Blaine by himself,” Robins said. “People never had to look for help before because they could just drive down.”
The consumer behavioural change, he added, may be for the long-haul. With the border closure now extended to at least late June, many consumers who were holding out hope of being able to pick up orders themselves in the U.S. are now turning to customs agents. In addition, the Blaine and other U.S. mailbox houses themselves find themselves needing to create a way to get goods to Canadian customers - lest that the Canadian portion of their business is lost completely.
Then there’s the simple convenience factor, of which Robins has a personal example.
“My sister lives in downtown Vancouver, and she used to drive an hour to Blaine to get something,” Robins said. “She’s now thinking, ‘Can’t I just get a service to bring it to my door or a local mall?’ That’s what we are going to see more of.”
Canada may also see more U.S. retailers now looking for their own solutions for shipping to Canada, since letting consumers worry about crossing the border themselves is no longer an option, Robins noted.
In the meantime, the crush of e-commerce shipment traffic at the border is very real, and customs agents say the best bet to avoid delays in one’s online orders may be to make sure who is handling the parcel-delivery process.
“I feel a little unpatriotic saying this, but one of the problems has actually been the postal services,” Robins noted. “There’s a backlog there; UPS and Fedex have been pretty fantastic. I’m a big e-commerce user myself, and when we buy something, anytime it says it’s shipping with Canada Post or the U.S. Postal Service, you can’t trust it… Shipping usually involves going through a hub-and-spoke system, and the postal services may not have the proper infrastructure there to handle things quickly.”