Transborder / Crossborder Transportation

Authors: Dr. William Anderson and Dr. Jean-Paul Rodrigue

1. International Transportation and Geopolitics

"Whosoever commands the sea commands trade; whosoever commands the trade of the world commands the riches of the world, and consequently the world itself". Sir Walter Raleigh (c1610).

The basic features of international transportation are constrained by its geography, which involves geopolitical considerations. In the past many wars have been started to gain control over trade routes, to gain control over mineral or energy deposits, to gain colonial control over untapped regions, or to set trade routes via existing ocean ports. This has been particularly important for maritime nations seeking to support the existing trade, expand it and secure its circulation. Through history, passages were subject to many conflicts that generally aimed to assure a control of a strategic location. International transport infrastructures, such as ports, airports and canals were also subject to geopolitical considerations as they can provide access to strategic resources or key markets. The geopolitics of international transportation can be considered from five perspectives:

Conquest. Transport technology was initially a mean to control and conquer oceans, territories and resources. European powers were the first to improve significantly the maritime technology in terms of speed and offense/defense capacity and were thus able to establish maritime trading roads and colonies all over the world, particularly from the mid of the 19th century. This period of early globalization was thus characterized by the usage of military advantages of European colonial powers to access markets and resources to their advantage. The railroad was also a mean to achieve territorial conquest, notably in North America (nation building) and in Africa (colonialism).
Competition. International transportation is a mean to compete on the global economy. Traditionally, through cabotage regulations, many nations reserved the right to carry national passengers and freight to national transport companies. For freight, this is often associated with empty flows on the return trip. Although cabotage regulations are still prevalent for air (air freedoms) and maritime transportation (Jones Act), competition has become a prevalent force in shaping modern transportation systems. For several countries, the development of their international transport system has favored exports and transport related activities such as shipbuilding, trade and insurance. Several newly established maritime nations in East Asia, such as South Korea, Taiwan and now China have grown using this strategy. A new form of international transport competition is related to the usage of flags of convenience where a maritime company can significantly reduce its costs by using the fiscal advantages of another country.
Jurisdiction. All sovereign nations have the jurisdiction over their territories, including internal water bodies such as lakes and rivers if they do not act as a boundary with another nation. Any international transportation entering, exiting or going through this jurisdiction is subject to national regulations. This jurisdiction also applies to the maritime segment. The United Nations Convention on the Law of the Sea Territorial waters in 1982 formally defined different levels of jurisdiction a nation can have over its adjacent sea. The territorial sea, a buffer of 12 nautical miles (22 km) from the coast is considered as sovereign territory, both for the above airspace and the seabed. Foreign ships are however allowed passage, but by doing so being subject to national regulations. This jurisdiction is partially extended to the Exclusive Economic Zone (EEZ) over which a state has rights to the exploration and use of marine resources (e.g. fishing, oil extraction). By convention, it extents to 200 nautical miles (370 km) but a state cannot prevent free passage through the EEZ.
Cooperation. Although international transportation mostly involves competition, common interests obviously favor agreements over different aspects involving access to infrastructures or setting standards. By 1792, most countries along the Rhine agreed to free navigation. Canada and the United States started from 1871 a long process of negotiation and common management of the St. Lawrence river that would eventually lead to the development of the St. Lawrence Seaway in 1954. International trade within Europe was enhanced by the adoption of a standard over rail gauges (1.435 meters). International air transportation is subject to regulations over security, access to specific gateways (air freedoms) and prices. Furthermore, the emergence of economic blocs such as the European Union and the North American Free Trade Agreement leans on common rules about transport standards and prices. The emergence of continental landbridges, such as the Northern East-West freight corridor represents a new and complex form of collaboration.
Control. The control of strategic places is also an important part of international transportation mainly to reduce vulnerability to disruptions. As the global economy becomes more interdependent, economies are becoming vulnerable to supplies of raw materials, energy and food. For instance, as the United States became more dependent on external supplies of oil, its foreign policy shifted at keeping an eye on strategic locations in oil trade, dominantly in the Middle East.

2. Boundaries and Borders

Globalization implies increasing flows of people and goods across international borders. Thus, an increasing proportion of personal and freight transportation operations must cope with borders as impediments to movement. At a time when tariff barriers are falling and technologies for identification and surveillance are proliferating, this might seem to be no great problem, as borders are more easily crossed than in the past. However, concerns with issues of international terrorism and illegal immigration have led some states to ever more scrutiny at their borders. Thus, crossing borders remains one of the greatest challenges in global transportation for both passengers and freight.

A boundary is an abstract line separating the territories over which two states have sovereignty. Since the boundary is a legal entity, its precise location must be determined in a treaty between the two states. This means that for a state to have precisely defined territory, it must have boundary treaties with all contiguous states. Even where such treaties exist, the boundary may be delineated on paper but not demarcated on the ground, which means its exact location cannot be found without surveying. The border is a more broadly defined geographical entity, comprising elements of the natural and built environment that define the boundary and control passage across it.

Sometimes the distinction between the boundary and the border is one of precision; for example, one might say that a river defines the border between two countries, while the boundary is a precise line located somewhere in the river. The main point is that the border includes a set of things that facilitate (roads, bridges, ferries), prevent (fences, military installations), monitor (cameras, motion detectors) and control (border crossing facilities) movement across the boundary. Borders also have the effect of creating bottlenecks in transportation networks, which are commonly associated with a concentration a cross-border flows along a limited number of gateways. Cross-border flows in North America are particularly illustrative since they are intensive and take place at specific points of entry. Due to differences in air transportation regulation, air travel tends to be less expansive in the United States than Canada, inciting the use of alternative American border airports by Canadians.

While boundaries have become more clearly delineated and immutable, it might appear that borders – or more specifically border functions – are declining importance. At one time, the most important border function was defense. Since territory increasingly defined the state, defending territory was critical to preserving sovereignty. To some extent, the territorial integrity norm has reduced the importance of border defense. But changes in the technology of warfare that undermine the importance and even the possibility of defending lines on the ground have also reduced the defensive function of borders. After defense, the main functions of borders are customs and immigration control. With the reduction of tariffs and the application of information and communications technology to both customs and immigration, one might expect that borders as impediments to the movement of goods and people would be matter of declining importance. Yet, a “borderless world” is far from being a reality and in some places such as North America border impediments have actually increased in recent years, particularly along the US - Mexico border.

3. Cross-border Transportation

Unless all goods are unloaded and transferred at the border, cross-border freight movement involves some trade in transportation services. For example, if an American trucking company moves a consignment from a U.S. origin to a Canadian destination, it is providing transportation services in a foreign country as soon as it crosses the border. This brings up two types of problems:

The first is compliance with technical standards for transportation operators, which may vary between the two states.
The second is cabotage restrictions that limit the ability of transportation providers to sell their services in a foreign country.

The classic problem of technical standards is when national rail systems have inconsistent track gauges, making it impossible to link networks across borders. While most gauge inconsistencies have been resolved with adoption of the standard gauge (1435 mm), some still exist, for example between countries of the former Soviet Union that use the 1520 mm Russian gauge and neighboring E.U. countries using standard gauge. Cross-border transportation is also influenced by trade imbalances as it implies different freight volumes depending on the direction of the border crossing as well as empty cargo flows.

A more current problem, especially in North America, is inconsistency in truck size and weight (TSW) standards. Most of the trade within NAFTA is in goods moved by trucks, but the three countries have widely varying TSW standards, with Mexico and Canada both allowing higher gross weights and having more liberal regulations on long combination vehicles (LCVs) than the United States. To complicate matters further, Canadian provinces and U.S. states have their own TSW regulations, leading to 66 different regulatory regimes within the NAFTA area. This presents carriers with the choice between making cargo swaps between trucks with different configurations or operating with the lowest common denominator configuration that will be legal in all jurisdictions – generally a single semi-trailer truck carrying no more than 36,288 KG (80,000 pounds).

Cabotage refers to the provision of transportation service between two points within the same country by a foreign firm. Cabotage is restricted under NAFTA in the sense that a Canadian truck could move loads from a Canadian origin to U.S. destination or from U.S. origin to a Canadian destination, but not between a U.S. origin and U.S. destination since it would be considered as cabotage. The problem with cabotage restrictions is that they lead to frequent empty back hauls, especially at crossings where cross border flows are imbalanced. Cabotage restrictions reflect the fact that NAFTA does not extend to free trade in transportation services. In the case of the European Union, cabotage restrictions have been lifted but only after many years of negotiation and legal challenge.

Despite trade liberalization, new technologies for communication and surveillance, and improved border procedures, crossing borders remains one of the principal challenges in global transportation. Increased concern about clandestine transnational actors (drugs, illegal immigration, terrorism) has led to a new regime of enhanced scrutiny that has offset many of the institutional and technological changes that once promised to make borders irrelevant. While the threat of international terrorism is very real, the intensification of scrutiny is reinforced by public opinion that is more aware of the benefits of security than of the benefits of trade. Especially in the United States, the strategy of interdiction takes priority over trade facilitation.