Canada is beginning to reopen its borders for nonessential travel after a 16-month shutdown in response to COVID-19. Starting Aug. 9, fully vaccinated U.S. citizens and permanent residents can enter the country.
Even though trade has been exempt from the restrictions — allowing trucks to move freely between Canada and the U.S. — the reopening of the border still has significant implications for freight. And not just because more congestion and wait times will undoubtedly accompany the return of passenger traffic.
It stands to be a big driver for freight demand.
“The opening of the border will be a boon for the transportation and logistics industries as a whole,” said Peter Stefanovich, managing partner at Left Lane Associates, a Toronto transportation mergers and acquisitions advisory firm.
It will come from an expected influx of visitors from the U.S. Ahead of the pandemic, in 2019, 25 million U.S. residents visited Canada, including 15 million tourists, according to Statistics Canada.
Just how fast they’ll return remains to be seen. But they will be spending money at restaurants, hotels and events. And that spending will drive demand for freight, Stefanovich said.
Visitors from other countries will be allowed to come to Canada in September, adding to the momentum.
In short, it will drive demand in the hospitality sector, which has struggled from the absence of foreign visitors. The only challenge may be to secure capacity in big markets like Toronto, particularly for temperature-controlled freight.
For now, the United States is keeping its land border closed for nonessential travel. But when it does open, U.S. border communities will undoubtedly see the welcome return of Canadians and their penchant for cross-border shopping, in search of deals on everything from milk to shoes.
This is part of FreightWaves’ AskWaves series. If you have a question for our editorial team to explore, click here. For more AskWaves articles, click here.
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