How Much Thicker is the Canada–U.S. Border? The Cost of Crossing the Border by Truck in the Pre- and Post-9/11 Eras

In the aftermath of 9/11, a new security regime was imposed on Canada–U.S. truck-borne trade, raising the question of whether the border has ‘thickened.’ That is, did the cost of moving goods across the border by truck rise and, if so, by how much, and have these additional costs persisted through time? Building on previous work that measured the premium paid by shippers to move goods across the Canada–U.S. border by truck, from the mid- to late 2000s, this paper extends the time series back to 1994, encompassing the pre- and post-9/11 eras. The analysis shows that the premium paid to move goods across the border rose, from 0.3% of the value of goods shipped prior to 9/11, to about 0.6% after 9/11, with these higher costs persisting through to the late 2000s. Whether these additional costs are imposed on the export or import leg of the cross-border journey depends on the balance of cross-border trips, with the export leg bearing these costs until about 2005, and increasingly the import leg thereafter.