App aimed at easing border congestion takes top prize at Canada-U.S. hackathon

As published by The Globe and Mail:

A two-member team of young professionals from Chicago has a new idea for unclogging the Canada-U.S. border: an app for importers and exporters based on the popular TurboTax program that many taxpayers use to fill out their annual tax forms.

The Chicago team, called TradeSherpa and made up of Steve Martinez and Price Shoemaker, emerged this past weekend as the winner of a two-day “hackathon” sponsored by the U.S. Department of Homeland Security and Global Affairs Canada, at which 23 teams were challenged to produce the most useful app for cross-border trade.

The event, split between Toronto and Chicago, focused on small and mid-sized firms that list paperwork and regulatory headaches as some of the biggest barriers to growth. “Many small businesses operate with tight cash flow constraints. Each transaction is vital,” said Mr. Martinez, a director at a products distribution company in the maintenance, repair and operations industry in Chicago. It was Mr. Martinez’s first hackathon, but his partner, Mr. Shoemaker, is an avid developer and has participated in several hackathons before.

“If there is an opportunity for us to create a solution that makes commerce easier for small businesses, we are interested,” Mr. Martinez said in an e-mail after the event.

The organizers timed the hackathon ahead of Prime Minister Justin Trudeau’s visit to Washington next week, where he will attend a state dinner hosted by President Barack Obama on March 10.

More than $1-trillion (U.S.) in goods and services moves across the Canada-U.S. border every year, the largest trading relationship in the world. But an array of security measures imposed by the United States since the terrorist attacks of Sept. 11, 2001, have slowed the pace of North American integration.

Trade as a percentage of North America’s gross domestic product has stagnated since 2000, sitting at about 7 per cent, compared with 32 per cent in the European Union and 13 per cent in Asia, according to a McKinsey & Co. report presented to the North American Forum in 2015.

A recent survey by the Canadian Federation of Independent Business found that one-third of small businesses are scaling back their exports to the United States because of administrative headaches and confusing fees.

“The most consistent barrier that we hear about is the paperwork,” said Adam Schlosser, a senior director at the U.S. Chamber of Commerce, which sponsored the event. Mr. Schlosser spent time in both Toronto and Chicago over the weekend, advising the participants. “The regulatory red tape that [businesses] have to follow, the forms that they they have to fill out, the confusion that comes from the overlapping and disparate requirements from both sides of the border.”

If North America was able to recapture the levels of trade and co-operation seen between 1993-2003, the continent could gain an additional $8-trillion by 2040 – 25 per cent higher than the projected growth today, the McKinsey report found.

The Canadian and U.S. governments have been working on the issue of the thickening border for decades. The most recent iterations of these bilateral government initiatives are Beyond the Border and the Regulatory Co-operation Council. But moving quickly and finding creative solutions are not what government does best, Mr. Schlosser said.

The Canadian government is not new to hackathons; for two years it has run the Canadian Open Data Experience, a competition where programmers use open government data to develop apps. The 2015 winners created a variety of apps; one helps farmers access relevant business information, another sources local food in Vancouver, and a third helps young Canadians forge their career path.

Hopes are high that some of the ideas generated at the trade app hackathon may indeed help ease border flows. “It’s about solving problems, thinking outside the box,” Mr. Schlosser said. “We want to see something that can be scalable. So if we do it for one or two issues here, we could do it for the whole border later on.”

The teams that took part in the hackathon were given access to sample customs manifests, border wait times and product codes.

The TradeSherpa app walks businesses through a series of steps to integrate invoices, customs forms and government documents. Users would enter information about the items they want to export, which would match them with customs brokers nearby. Revenue would come from subscription fees. Currently, the project exists as a functional “proof of concept” application on their own private server.

The pair plan to continue development on their app. “At the hackathon we met a customs attorney interested in helping us move this forward,” Mr. Martinez said. “In addition, we potentially have an opportunity to demo for the U.S. Department of Commerce. Our intent is to create a minimally viable product and put it into the market to validate the need.”

For the participants, the hackathon was far from an academic exercise. The two government and various corporate sponsors put up over $15,000 (Canadian) in cash and prizes for the winning teams.

Second place went to Uniport, a team made up of University of Toronto students. They focused on creating a user-friendly experience, gathering basic information from the exporter (in their example, a car dealer) to automatically generate and fill in the forms needed by various government departments.

The third-place team was BorderSwipe, which produced what they described as “the least sexy version of Tinder ever created.” The app matches shippers, truckers, border patrol agents and customs agencies with the relevant information they need for a particular shipment.

Sarah Reid is a journalism fellow at the Munk School of Global Affairs at the University of Toronto. Follow her on Twitter @sarahcreid.