A huge part of the world’s economy has deep roots in goods production. Without production of goods the other branches of the economy, like commerce and services wouldn’t have existed at all.
Goods production may be at the base of the economy, but goods need transport services from the place of production to the place where their consumer is. Many times the distance between production place and the consumers is quite big, and this is the reason why the transport of goods is the all-time key economic activity worldwide.
Since ancient times, there was interdependence between shipping activity and the degree of economic development. Civilizations who managed to exploit natural advantages like waterways have managed to develop economically.
Transport has played a catalytic role in the migration, leading to the economic and social transformation of many nations. Development, diversification and development of the transport system had as a cause expansion and intensification of production and circulation of goods.
The same principles regarding transport apply to relations between Canada and the U.S. These two countries, linked by a long commercial tradition, have the world’s largest and most comprehensive trading relationship.
Transports between the USA and Canada
To have a better picture of what is the scale of commercial exchanges between the United States of America and Canada, here are some fact figures:
- U.S. exports to Canada were $341 billion in 2017 or 15 percent of total U.S. exports.
- U.S. exports only to Canada makes a total of 15 percent of total exports
- Over 30 U.S. states have Canada as their number one export market.
- In 2017 alone, U.S. exports to Canada exceeded total U.S. exports to China, Japan, South Korea, and Singapore combined.
- In 2017, U.S. exports of goods to Canada totalled $282 billion.
- Canadians spend more than 60 percent of their disposable income on U.S. goods and services.
If you are a U.S. based production company, chances are that a buyer in Canada wants your product. You have to ship the products from the U.S. to Canada but there are so many factors you have to keep in mind before you will see the shipment unloaded from the truck at your client premises and your invoice cashed in.
Commercial invoices, cargo liability limitations, duties, customs clearance are just a few of the things you have to consider in the process of shipping goods from the U.S to Canada.
Let’s clear all these things and smooth the process of shipping to Canada for you.
Customs Brokers – the main facilitators of a smooth freight shipping to Canada
If you ship goods to Canada from the United States, you need the services of a customs broker. Customs brokers will skillfully help you navigate the vast nexus of government agencies, regulations, protocols, and updates that often overwhelm business owners.
The main role of a customs broker is to resolve the customs clearance for the exported goods and to smooth the cross-border goods transport. Typically, this involves obtaining, preparing and presenting the necessary customs paperwork to customs officers.
You have to know that, the best way to avoid problems like needless delays, is by working with a customs brokerage company you can trust. There are also Canadian Customs Brokers that are also U.S. Customs Broker operating on both sides of the border between the two countries.
Customs brokers ease the export and import of goods by making calculation and payment of duties and taxes that are due when a shipment arrives and leaves the border.
To make it more simple, customs brokers acts as liaison officers in an army. They facilitate the communication between the main actors of commercial cross-border operation: importers, freight carriers, warehouse owners/services providers and government agencies – in most cases – Customs Offices.
The customs broker is maybe the most important piece in the logistic chain of a cross-border shipment between the U.S. and Canada.
Documents and paperwork you need for smooth transport from the U.S. to Canada
Bill of Lading or BOL
All goods transports have to be accompanied by a Bill of Lading. The bill of lading or BOL acts like a contract between the carrier of the goods (in our case, a trucking company) and the shipper. The bill of lading provides all the details of the shipment and it must be handed to the truck driver at the moment of loading. A copy of the BOL must also be attached on the packed shipment inside the truck.
To understand Bill of Lading more clearly, let’s suppose that a trucking company has to transport computers from the U.S. to Canada. Before the computers are loaded in the truck, the driver and the shipper representative has to sign the bill of lading.
When the computers arrive safely to the destination, the truck driver should get the document signed by the consignee (receiver) as well. This document can serve as proof. It also prevents theft for the company’s assets.
Briefly, a bill of lading contains the following information:
Loading place and unloading place. This is quite obvious information to provide, full addresses and names of both the shipper and the consignee (or receiver) being the basis for every transport.
Shipper special instructions. For example, it is possible the shipper instructs the trucker company to handle goods in a specific way or to assure the unloading also.
Description of goods. This is a no brainer. Shipper must provide a brief description of the goods to be loaded on the truck.
Special conditions of transport – This refers to conditions required by goods during the transport and also is a condition that is already fulfilled by the initial choice of the truck type: controlled temperature, normal dry transport, open flatbed, etc.
Packaging type. Shipper must explain how he/she packed the goods for transport. Packaging must always assure the safety and stability of goods during transit. Packaging may be crates, big-bags, pallets, carton boxes, containers, barrels, etc.
Note: The shipper certifies through the BOL that the transported materials are properly classified, described, marked, labelled and packed and are in proper condition for transportation, fully respecting the legal conditions of the transport authorities.
Date of loading. This certifies the date when goods were loaded on a truck and is binding to the trucking company that have to deliver goods in due time.
Dangerous goods and hazardous materials designation. Only used if the shipment consists of dangerous goods in the quantity that requires special transport. If this is the case, all regulations regarding the transport of hazardous materials must be fulfilled.
It is worth noting that in Europe, Russia, and other countries in the Middle East and Central Asia, the equivalent of BOL is the CMR which stands for Convention relative au Contrat de transport international de Marchandises par Route. This international agreement also includes the rights and obligations of the parties involved in road transport: consignor, carrier and consignee.
The Commercial Invoice
The Canadian Commercial Invoice (CCI) is another important document that is compulsory to have when shipping goods from the U.S. to Canada. This invoice is needed at the customs authorities to identify who is responsible for customs duties and also to let the customs clerks know all the specifications of the shipped goods. The shipper must have more copies of this invoice, at least one copy must be attached to the bill of lading and another one must accompany the goods.
Always make sure that all the information in the Bill of Lading and Commercial Invoice are complete and accurate. This will save you from potential delays at the border. Anyway, the customs broker will check both of these documents, but it’s always nice to hand them in proper order.
Certificate of origin
If you manufacture or ship goods produced under NAFTA rules you also can profit of duty-free customs clearance.
NAFTA is the acronym of the North American Free Trade Agreement. This is a detailed trade agreement that sets the rules of trade and investment between Canada, the United States, and Mexico.
Since the agreement entered into force on January 1, 1994, NAFTA has eliminated most tariff and non-tariff barriers to free trade and investment between the three NAFTA countries.
In this respect, the basic rule you have to know is that each NAFTA country does not apply tariffs on imported goods “originating” in the other NAFTA countries. Originating means that those goods have been consistently produced in those countries, and customs officials being attentive no to let go of goods imported from abroad and just slightly modified.
To certify that goods qualify for the preferential tariff treatment under NAFTA, the exporter must complete a certificate of origin. To make a claim for NAFTA preference, the importer must possess this certificate of origin at the time the claim is made.
All documents in place, the loaded truck can now start its journey to Canada. If every paper is in good order you only have to see of your other businesses and wait for the delivery to reach its destination. From now on, only the customs broker and the truck driver will take care of your shipment.
A savvy customs broker will contact the Canada Border Service Agency way before the truck will arrive at the border checkpoint by sending all the relevant documents concerning the incoming shipment. When the truck effectively arrives at the designated checkpoint, all the driver has to do is to stop and provide the shipment information to the customs clerks from CBSA. They will check again the documents and will release the truck to go further. In the due time, the truck will arrive at the destination for unloading the goods.
Other documents you need for easy export to Canada
Export License. This document is necessary only for “special” products such as alcohol, tobacco, firearms, and others that are under strict legal regulations.
Cargo Control Number. This is required for easy identification of exported goods.
Here you are a few tips that will help you in your endeavour of shipping goods to Canada.
All you have to bear in mind is that if you do your “homework” properly and have all the documents filled in good order and provides to customs broker and truck driver, all should go smoothly.
Also, pay attention to the packaging of goods for safe transit.
The most important thing to consider though is choosing the trucking company and the customs broker. If you choose wisely a professional and experienced trucking company and a really good customs broker, this can be great insurance for the smooth transport of your goods from the U.S. to Canada.