Canada Cross-Border Shipping Guide: How to Move Freight Over the Border
The US and Canada share the world’s longest land border at 5,525 miles. Thanks to this fortuitous joining, the US and Canada have established strong trading relationships that bolster both economies with new materials, goods, and labor year-round. This relationship is good for business, making transporting goods from one country to another easier. While international shipping can still be complex, solid cross-border transit means there’s already a clear path for importing and exporting goods and that there are many knowledgeable 3PLs who can help you navigate that path. By partnering with a knowledgeable carrier, you ensure efficient shipping across borders. This helpful article about cross-border shipping to Canada provides a sense of the required information and documents.
The trade relationship between the US and Canada is essential to our mutual success. Canada continues to consume a significant portion of US exports. In 2021, 17.5% of US exports went to Canada, while 12.6% of total US imports came from Canada. US trade with Canada amounted to more than two-thirds of Canada’s total global trade value. Both Canada and the US invest significant amounts in direct investment in the other country, with $500.7 billion from the US to Canada in 2021 and $744.9 billion from Canada to the US that same year.
Overall, this strong relationship means that importing goods to Canada is significantly easier than importing goods elsewhere but still requires planning and experience.
While import and export values between Canada and the US are fairly equal, there are about three times as many shipments heading northward than southward. Therefore, it typically takes longer to ship goods from the US to Canada than to ship goods from Canada to the US. In 2021, it took an average of 28 days for imported goods to reach their recipients in Canada.
The first step to exporting goods from the US to Canada is establishing an importer of record. The importer of record is the company listed on all customs documents. This means they’ll be the ones to pay customs fees and ensure all documents are in order. That said, the importer of record can always invoice the other parties involved to recoup customs costs, depending on who the payment ultimately falls to.
Between the two parties exporting and receiving goods, there are a few things to consider when determining who will be the importer of record. First, discuss who has more experience moving things across the border. If a party clearly has more experience and already has an established broker and shipping system, it may make sense to have them be the importer of record. Second, it’s often easier for the recipient on the final side of the border to make payments and negotiate paperwork issues because they are already in that country. This helps with a few things, including currency exchange and ease of communication.
The next step is selecting a customs broker to simplify your shipping process and navigate any issues. While it is technically possible to export goods from the US to Canada without a broker, it’s not recommended, especially if you don’t have much experience working internationally. US to Canada shipments are easier than most international shipments but are still not entirely straightforward, per se. Between customs forms, communication with carriers, and navigating any issues, international shipping can be confusing and complicated, so working with a customs broker is highly recommended. Additionally, a 3PL with connections to a multitude of carriers may actually save you money by connecting you with a new carrier or helping you access their discounts as larger clients. Finally, if you are choosing your own broker, make sure they have the authority to work in both countries. Not all US carriers have the license to ship in Canada or vice versa.
So, how do you select a reliable customs broker? There are several things to consider when looking for a 3PL supplier. First, if you already work with a 3PL you like, you can ask whether they offer cross-border services. If not, see who they will recommend. If you’re operating without a 3PL, consider these metrics:
Use online search engines to review their websites and find online reviews to gauge their reliability and customer service. We also recommend speaking with contacts at other companies to ask for recommendations or advice.
Canadian shipments from the US require a Canadian Customs Invoice, a Bill of Lading (BOL), a commercial invoice, and a certificate of origin.
The Canadian Customs Invoice is for Canadian customs and describes the shipment's specifics, including the importer of record’s identity. Once created, two copies will need to be printed. One is attached to the freight, the other to the BOL. The invoice provides exact details about the shipment and is essential to clearing customs.
The information required on this form is:
Before filling out a BOL, secure a customs broker. The broker will help fill out the form and ensure everything is correct. Brokers are well-versed in international shipping and can help make the process much easier and avoid common errors. A BOL filled out correctly provides all the essential details drivers and carriers need to know to move freight and accurately invoice it.
A USMCA (United States–Mexico–Canada Agreement) Certificate of Origin is required to determine if the items are USMCA eligible. To qualify for specific tariff reductions, items must have been substantially grown or produced in the US, Mexico, or Canada.
While these are the primary documents needed at the time of writing this article, things do change. For example, in July 2020, the new trade agreement USMCA went into effect, overturning NAFTA, the existing trade agreement between the US, Canada, and Mexico. USMCA is still relatively new, and changes in regulations and required documentation may occur. Please make sure to check with your broker or check border control websites to ensure you have the most up-to-date information.
The Harmonized System (HS) codes are numerical codes used to describe and classify shipped and traded goods globally. The HS system is created and monitored by the World Customs Organization. The system is updated every five years. The system's value is that the first six digits of the code are the same globally, making it easier for customs and border agencies to use the HS system to determine how items will be taxed. HS codes can also be used to file Electronic Export Information (EEI) for commodities leaving the US that are worth more than $2,500.
Cross-border shipping poses some pitfalls that can slow down your shipment. Here are some of the most common obstacles and how to solve them.
While shipping to Canada doesn’t have to be complicated, the planning time can be longer than you’d think. Most companies suggest budgeting at least two weeks for onboarding in a customs broker’s system. There are some paperwork hurdles to clear, so make sure you allocate enough time for this step.
Once you have a broker, make sure to communicate clearly with them. If it’s the first time working with them, it’s a good idea to hop on a call with the customs broker, carrier, and shipper to ensure everything is aligned and everyone is on the same page.
We get it. Paperwork can be tedious. However, spending a little extra time in the beginning to ensure all documents are correct will save a lot of headaches in the future. A common error is inconsistencies between the BOL and the commercial invoice. The information on both of these documents should match exactly. Shipments will not be able to clear customs until the paperwork is approved.
Even the smoothest cross-border shipments have something unexpected. In those cases, carriers need a contact that they can reach to resolve issues. Ensure your after-hours contact information is available to all parties and that you’re available to help when needed.
Due to inspections and possible delays, cross-border shipments almost always take longer than domestic shipments to cover the same distance. Plan ahead as much as possible to pad the schedule and prevent unnecessary stress over delays.
Shipping to Canada differs from domestic shipping, but it doesn’t have to be painful. A.N. Webber can be your customs broker for your next cross-border shipment. Their McLeod Powerbroker TMS helps connect you to the best carrier and services available. Get peace of mind with 24/7 visibility through MacroPoint tracking software. Request a rate today.
Each solution is designed to meet your unique needs, ensuring efficient, reliable freight management no matter the size or scope of your operation.
