Every year, over $700 billion in goods cross the border between Canada and the United States, with trucks carrying a large portion of that freight, including less than truckload, ful truckload, and other equipment moves, such as box truck or courier van. Physically, those trucks are navigating over just one line — the border. But bureaucratically, they are maneuvering through a rather complicated network of many paths that can sometimes induce wrong turns or even U-turns.
Every year, over $700 billion in goods cross the border between Canada and the United States, with trucks carrying a large portion of the freight. Physically, those trucks are navigating over just one line — the border. But bureaucratically, they are maneuvering through a rather complicated network of many paths that can sometimes induce wrong turns or even U-turns.
This guide offers an in-depth look at overcoming the challenges of moving freight from the United States to Canada and the best practices shippers can use to make cross-border shipping a smoother trek, including working with a customs broker and a skilled third-party logistics (3PL) partner.
Specifically, this guide covers the following:
Shipping goods and freight north across the border into Canada from the U.S. can be more expensive than moving shipments within the 50 states. But the flow between the countries over the past few years has proved the extra cost is worth it. Canada and the United States trade over $2 billion in goods and services daily, and trade in goods and services between the countries totaled $762.8 billion in 2021. How those goods and services get across the borders varies. Let’s look at the many shipping practices used and each country’s regulations and considerations.
Shipping to a country the size of Canada provides a unique set of challenges. As with other countries, a significant portion of the people and businesses in Canada are in urban areas, but many others are scattered across the expansive countryside. The greater consumer demand for fast shipping includes those not in easily serviced areas, meaning the demand on shippers grows ever larger. That, combined with different sets of procedures and regulations, means shipping managers must stay on their toes. In addition to a bill of lading, commercial invoice, and applicable import and export licenses, the Canada Border Services Agency (CBSA) requires shipments from the United States to include a Canada Customs Invoice (CCI). A CCI must list the following:
To curb some of those costs and paperwork, U.S. shippers can apply for non-resident importer (NRI) status. Being an NRI can simplify the importing and exporting process. Many Canadian businesses require their U.S. partners to be NRI if they do not already have an existing residency in Canada.
It is also important to take into account a few other factors:
U.S. Customs and Border Protection (CBP) requires that all formal shipments entering the U.S. from Canada have the following:
Shipments might also need to be approved by other government agencies, including the Food and Drug Administration, the Fish and Wildlife Service, the Environmental Protection Agency, and the Department of Transportation.
Cross-border shipping may seem somewhat intimidating, with tens of thousands of trucks crossing the Canada-U.S. border daily. But if you plan and get everything in order beforehand, it Therefore will save a lot of headaches and wasted time. Here are some must-knows for a journey into Canada.:
Though shippers can clear their shipments while crossing the border, customs brokers can expedite the process and save the shipper time and money. Knowing the rules and regulations, brokers facilitate the crossing by handling the documentation and paperwork that can get tricky when crossing into Canada. They take care of duties such as determining how the freight should be classified, evaluating what duties or tariffs need to be assessed, and filing paperwork with customs and the border patrol.
An importer of record (IOR) is responsible for the tariffs owed to the U.S. and Canadian governments. The shipper or receiver can be the IOR listed on customs documents, which also obligates them to ensure shipments adhere to all importing laws. Therefore, it is often easier if the receiver is the IOR.
There are two main options in choosing a cross-board transportation provider. Shippers can work directly with a carrier or freight forwarder or use a 3PL or freight broker specializing in cross-border shipping. One benefit of a 3PL is that it usually has partnerships with many cross-border freight carriers and can offer some flexibility in capacity and pricing. If you go with a carrier, remember they must have the authority to operate in the U.S. and Canada.
Number One on the list of things that will ensure a swift border crossing is having all the documents ready and filled out correctly. These documents are a must:
A handful of other documents can be important when crossing the border. These conditional documents are:
This is one area that can help the shipper get ahead of the game. The Pre-Arrival Review System (PARS) allows brokers to submit information to the Canada Border Services Agency (CBSA) for review and processing before the goods arrive at the border. This system helps expedite the carrier’s release or examination process once the driver arrives at the border. The U.S. version of this is the Pre-Arrival Processing System (PAPS).
The Harmonized System (HS), maintained by the World Customs Organization, is a standardized method of classifying traded products. Customs officials around the globe use it to identify products when assessing duties and taxes. The HS, which categorizes about 5,000 commodity groups, uses coding in which the first six digits of the code are the same in all countries, and then each country can adjust its codes by adding two or four numbers. You will need both the U.S. and Canadian codes for the export process.
Some errors are easy to avoid, but not paying close attention can leave the driver stuck at the border. Here are five of them:
The best way to understand a complicated process like cross-border shipping is to visualize exactly what needs to happen to be successful. Here’s a step-by-step guide:
To be prepared, you will need to have these ducks in a row:
This is where some knowledge of the Harmonized System comes in handy. The U.S. and Canada both use the HS to classify goods. From that, you can determine the tariff classification number and the cost of the duties you will be paying. Brokers can be very helpful with this step.
The correct tariff classification number can now help you determine how much the duties and taxes will be on the shipment. For goods being shipped to Canada from the United States, the CBSA has a duty calculator. The calculator does not guarantee its accuracy, but it is an excellent tool for estimating costs. It’s also important to determine the tariff treatment that applies to the shipment. Canada has 18 different tariff treatments which serve to reduce duty rates.
Duty-free status and reduced tariffs are possible for eligible goods. Shippers or the IOR must prove the goods were manufactured in the country of origin and shipped from the beneficiary country without moving from one vessel to another during transit.
Choosing a reliable carrier is crucial to getting your freight across the border into Canada. Your carrier and broker must communicate to preclear the shipment before pickup, electronically submitting all paperwork to Advance Commercial Information before arrival at the border. If approved, they will need to provide customs with a PARS document, entry, and an ACI number at the border.
IA customs broker can easily handle clearance, but you must have power of attorney to clear any shipments if you are going it alone. To make sure your customs clearance goes smoothly in either case, make sure you have done the following:
Importing into Canada requires that you keep all the records (see the list of key documents stated above) available in either digital or paper format for six years following the shipment. If you use a customs broker, they are responsible for recordkeeping.
The U.S.-Canadian border spans 5,525 miles and includes over 100 border-crossing checkpoints, from Washington state and British Columbia out west to Maine and New Brunswick in the east. There are many locations with highway-land border offices through which commercial goods can go through. Note: Find maps in the Resources section below.
After going over all the documentation, regulations, and permutations, it’s easy to see why having a 3PL with cross-border shipping experience is the best road to take when you want to head north. Choosing a proven 3PL puts you closer to crossing the border in plenty of ways:
It’s clear that an experienced and knowledgeable 3PL can make it a lot easier to move shipments across the U.S.-Canada border. With entities in the United States and Canada, Zengistics is fast becoming one of North America’s premier digital brokerages, specializing in strategizing and executing full truckload, less-than-truckload, and intermodal freight. Zengistics is extremely familiar with border crossing protocol and has the ability to accept funds in both U.S. dollars and Canadian dollars. If you are ready to make some dollars on both sides of the border by shipping into Canada, we are ready to make that happen. To schedule a free virtual demo test drive, visit our website to start your journey to another land.