Transporting items from the US into Canada can give even the most experienced transporter a good scare, and rightfully so.
The Canadian border, which stretches across 8,891 Kilometers (5,524 miles) of land and water, is the longest, non-militarized border in the world. Needless to say, the Canadian customs process is quite complex and requires very specific transportation knowledge.
Before you cross the border with someone else’s items in tow, it’s imperative that you understand this not-so-seamless process. Of course the most valuable knowledge comes from first-hand experience, but Inbound Logistics Magazine compiled the exceptional list below to help guide your trips across the border.
Ten Tips for Getting Shipments Across the Canadian Border
1. Compliance requirements change. The Canada Border Services Agency (CBSA) continually revises compliance requirements, which means businesses or their logistics partner/customs broker need to ensure they are aware of changes and in compliance. Shipments arriving at the border without the updated classifications face delays, incorrect duty and tariff assessments, and possibly denial of entry.
2. Avoid hidden charges. Unexpected and additional delivery charges are a significant issue for Canadian consumers. The Non-Resident Importer program was developed for U.S. businesses to act as an importer of record, meaning all taxes and customs fees can be paid in advance. Make sure your business or logistics partner is able to provide a comprehensive landed cost, so customers are not surprised with additional fees at time of delivery.
3. Trade agreements offer economic incentives. NAFTA is the agreement between the U.S., Canada and Mexico, and provides tariff-free trade on shipments. Participants must follow specific, sometimes confusing, guidelines in order to benefit from key provisions. It’s important to understand NAFTA benefits are not automatic; your logistics provider/customs broker can navigate the process.
4. Trusted shipper programs speed clearance process. Recent security mandates and compliance regulations have caused longer wait times, increased inspections, and bureaucratic red tape. Until a permanent fix is found, each government operates trusted shipper programs to allow certified carriers preferential treatment upon arrival at the border. Make sure your shipment is traveling with a trusted carrier who is a participant in both U.S. and Canadian programs.
5. Consolidation is key for smaller shipments. An experienced logistics provider will combine your smaller packages with other shipments for easier and faster border clearance. A consolidated shipment will clear the border as a single unit. The alternative would be for each small package to wait in a queue for inspection and individual clearance.
6. Canada has gone Paperless: Not entirely, but the border clearance process is largely conducted via web-based portals and online transactions. CBSA’s border security system, the Advance Commercial Information(ACI) program, requires carriers to electronically submit shipment information prior to arrival at the border. It’s important for your carrier to be (a) aware of the ACI mandates, and (b) able to access its eManifest operating system.
7. Your government may pay you for shipping to Canada. Both U.S. and Canadian governments operate programs to entice cross-border trade. CBSA operates the Non-Resident Importer program, which allows U.S. businesses to avoid going to their customers with an additional invoice for unexpected duties and fees. In the U.S., the Duty Drawback program reimburses businesses for import fees that are paid on materials used in the manufacture of goods then subsequently exported. Businesses aren’t tuned into these programs, but a qualified carrier should be.
8. All provinces are not the same. Not unlike individual states in the U.S., each province in Canada imposes its own taxes and has its own system for calculating and collecting those fees. Some provinces subject goods to a “harmonized tax” that includes federal and provincial tax, while other provinces impose a “goods and services tax,” which only includes federal tax. It’s important to understand exactly what your shipment’s tax obligations will be, and have those taxes paid at time of purchase.
9. Be sure you can reach your customers. Canada is the second largest country in the world, based on land mass. While roughly 80 percent of the population lives within 100 miles of the U.S. border, it is essential to have capacity to reach Canadians located in non-urban areas.
10. Partner with an experienced logistics provider. Businesses entering the Canadian market rely on their logistics partner not only to transport their shipments, but also to offer recommendations about how to improve performance, insight into the Canadian culture, and help in developing an efficient supply chain. Not every logistics provider can deliver as advertised. They do not have the expertise in the Canadian market that they claim. Ask questions, demand documentation, and check with other businesses. Don’t find out the hard way!