Cross-border shipping between the U.S. and Canada is a burgeoning industry. In 2023, an average of US$2.7 billion worth of goods and services crossed the border every day. Shippers leverage trucks to move a significant portion of that daily freight between both countries. This includes less than truckload, full truckload, and other moving equipment, such as box trucks or courier vans.
Trucks transporting goods across the U.S. and Canada border must navigate a complex network of regulatory requirements and multi-stakeholder processes. This intricate web of compliance measures and logistical pathways can lead to costly delays or the need for course corrections.
This guide offers an in-depth look at overcoming the challenges of moving freight between the U.S. and Canada and the best practices shippers can use to make cross-border shipping smoother, including working with a customs broker and a skilled third-party logistics (3PL) partner.
Specifically, this guide covers the following:
Despite their proximity, cross-border shipping of goods and freight between the U.S. and Canada can be more expensive than moving shipments within the 50 states. However, the flow of shipments between the countries over the past few years has proved that the extra cost is worth it. The U.S. and Canada trade over US$ 2.7 billion in goods and services daily, and trade in goods and services between the countries totaled US$908.9 billion in 2022 and US$985.5 billion in 2023.
How those goods and services get across the borders varies. Let’s examine 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 logistical 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:
U.S. shippers can apply for non-resident importer (NRI) status to curb some of those costs and paperwork. Being an NRI can simplify the importing and exporting process. Many Canadian businesses require their U.S. partners to be NRIs if they do not already have residency in Canada.
Shipping operations between the two countries differ, so It is also important to take into account a few other factors:
U.S. Customs and Border Protection (CBP) requires that all formal shipments from Canada to the U.S. have the following:
Other government agencies, such as the Food and Drug Administration, the Fish and Wildlife Service, the Environmental Protection Agency, and the Department of Transportation, might also need to approve the shipment.
Cross-border shipping can seem overwhelming, especially with thousands of trucks crossing the U.S. and Canada border daily. But if you plan and get everything in order beforehand, it will save you a lot of headaches and wasted time. Here are some must-knows for moving shipment(s) between the U.S. and 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 shipping freight 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 when choosing a cross-border 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.
One way to ensure a swift border crossing is to have all the documents ready and filled out correctly. These documents are a must for shipping between the U.S. and Canada.
The essential details are the shipper’s address, contact information, and a description of the goods, including their size and weight.
A document showing proof of origin. The importer, exporter, or producer can complete and sign the certificate electronically.
This document helps the importer clear the shipment with customs. Required information includes:
This document is required when exporting controlled goods from the United States. Controlled exports are products that could be contrary to the country’s interests. You must check the commerce control list (CCL) to determine whether your goods fall under this classification. You can contact the Bureau of Export Administration at the U.S. Department of Commerce for that list.
This is yet another document showing the shipment details. The packing list can include quantities, items, model numbers, dimensions, and net gross weights. The list can help a customs broker gain further information about the shipment so that if customs authorities have questions, the details in the packing list can help the broker provide quick answers.
If your goods fall into particular categories, you might need import permits. Both the U.S. and Canada have restrictions on specific items. For instance, U.S. Customs and Border Protection (CBP) provides “Importing into the U.S.” guidelines. Check the Special Requirements section of that document before shipping anything into the U.S.
This document is used by Mexico, U.S. and Canada to determine if imported goods are eligible for reduced or eliminated duty as specified by the United States-Mexico Canada Agreement (USMCA). The USMCA replaced the North American Free Trade Agreement (NAFTA) in 2020.
This area 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. 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 in cross-border shipping operations 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 shipped to Canada from the United States, the CBSA has a duty calculator. The calculator does not guarantee accuracy but is an excellent tool for estimating costs. Determining the tariff treatment that applies to the shipment is also important. Canada has 18 different tariff treatments that reduce duty rates.
Eligible goods can enjoy duty-free status and reduced tariffs. 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 a successful cross-border shipping operation. Your carrier and broker must communicate to clear the shipment before pickup and electronically submit all paperwork to Advance Commercial Information before arrival at the border. If approved, they must provide customs with a PARS document, entry, and an ACI number at the border.
A 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:
Shipping between the U.S. and Canada requires keeping all the records (see the list of key documents stated above) available in 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. Many locations have highway-land border offices through which commercial goods can pass. Note: Find maps in the Resources section below.
After reviewing 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 heading north. Choosing a proven 3PL puts you closer to crossing the border in plenty of ways:
An experienced and knowledgeable 3PL can make moving shipments between the U.S. and Canada border much easier. 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 cross-border shipping and trucking operations, including truckload, less-than-truckload, and intermodal freight. Zengistics is extremely familiar with cross-border shipping protocol and can accept U.S. and Canadian payments. If you are ready to make some dollars on both sides of the border by shipping freight into Canada, we will make that happen. To schedule a free virtual demo test drive, visit our website to start your journey to another land.
Operating on the world’s first collaborative logistics platform, Zengistics is a technology company that executes freight.
