Logistics Implications of an Integrated US‐Canada Market
In: International journal of physical distribution and logistics management, Band 23, Heft 1, S. 3-13
ISSN: 0020-7527
Trade restrictions; border crossing difficulties, and company
organizational structures have limited historical cross‐border
distribution activity. The result, generally, is two or three
independent distribution systems to support North American logistics
operations. With the completion of the US‐Canada Free Trade Act, many of
these limitations are being reduced. It is now time for firms to refine
their distribution networks to respond to this new environment. The
major changes that firms must consider are distribution centre locations
and manufacturing supply points. The factors that influence these
changes are country/market integration, duty levels, and cross‐border
transportation rates. Reports on the results of food industry
simulations that consider multiple levels of integration, duties, and
cross‐border rates. The results compare the number of distribution
centres and the total cost of each network, and generally indicate that
there are no significant changes in distribution system network design
resulting from US‐Canada Free Trade. The minor changes which are
observed include Toronto serving the Eastern US and Seattle serving
Western Canada. The cost differences are not significant. The results
also indicate that there is no significant economic motivation for
cross‐border logistics activity until duties are eliminated and
cross‐border transportation rates decline by 10 per cent.