Trucking through Canada: cross-border advantages for Alaska Natives.

• Author: Prokop, Darren
• Position: NATIVE BUSINESS

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Alaska Natives are a proud people whose culture is woven into the fabric of the state. Alaska Native corporations are a unique model for business and economic development. As such, Alaska Natives have a relationship with the federal government quite different from the system of reservations found in other states. The University of Alaska Anchorage has developed special outreach programs to recruit Alaska Natives into the study of a wide range of subjects in the physical sciences and the humanities. But there is another, though much less known, advantage, which Alaska Natives have and it lies in the area of cross-border trucking.

Because of Alaska's location, sparse and dispersed population, resource exports and manufactured imports, it is highly dependent on cost-effective and efficient transportation. Distance, weather and limited infrastructure make shipping costs higher than in the rest of the United States. Opportunities to systematically lower operational costs are welcome by all shippers and carriers. There are transportation opportunities for Alaska Natives and the trucking firms that might hire them.

First, some background. The United States runs a trade deficit of around $700 billion. The value of the goods and services we import greatly exceeds the value of our exports. In merchandise trade, we import $340 billion from Canada while sending it only $260 billion--an $80 billion deficit. However, Alaska bucks the trend with a $40 million trade surplus--$520 million worth of exports to Canada as against $480 million worth of imports. In fact, Canada is the state's fourth largest export market, after Japan, China and South Korea.

There are two border crossings into Alaska from the Yukon and three from British Columbia. On an annual basis, about 24,000 trucks enter and exit the state; and out of these 76 percent are hauling loaded containers. While these trade flows represent less than 1 percent of total U.S.-Canada cross-border trucking activity, these trade lanes offer up an opportunity for Alaska Natives. This arises because of the special legal status Alaska Natives enjoy with respect to a transport activity known as cabotage.

CABOTAGE

What is cabotage? Simply put it is the transport of freight (or passengers) from one point to another on domestic territory by a foreign conveyance and/or foreign operator. It is usually an illegal activity except under circumstances agreed to by the foreign and domestic...