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Things to know about cross border trucking from USA to Canada
If you’re looking to ship some cargo from the USA to Canada or vice versa, ensuring a smooth cross border trucking process is very important.
Trucking within a country already requires a considerable amount of attention and effort. Cross-border trucking takes that level of complexity up, by about 20%.
Canada is one of the United States’ most important trading partners, second behind only Mexico. As a shipper located in either of these countries, you’re all but guaranteed to move freight using one of the many (100+) Canada-U.S. border crossing locations at some point in your working life.
Additionally, you will recognize that the international cross-border trucking process isn’t as simple as moving freight through state lines or from one province to another.
To make this process as smooth as possible, you need a resource that explains the U.S-Canada cross-border freight trucking process in depth.
Every year, over USD 525 billion in imports and exports move between the two countries, and 68% of all that cross-border freight moves in a truck.
Almost 30,000 trucks cross the US – Canada border every day. Although it is extremely common, it is more complex than moving freight domestically.
In this blog, you’ll be given clear instructions on the step-by-step process to get your freight over the border, whether you’re trucking truckload freight from the USA to Canada or vice versa.
Brief Guide to Moving Cross-Border:
- Setting Up a Customs Broker:-
Though a good cross-border freight services provider will make things easier for you, there are some steps you need to take before trucking. Specifically, you will want to set up a reliable customs broker.
Though you can clear your shipment with customs, a good broker will make the process much easier, helping you to avoid penalties and costly delays. In short, it’s a good idea to have a customs broker for all shipments to and from Canada.
- Establishing an Importer of Record:-
This party is responsible for ensuring that imported goods comply with all customs and legal requirements of the country of import (US or Canada). This is usually the owner of the goods, but may also be a designated individual or customs broker.
The importer of record will be the party listed on the customs documents and is responsible for handling any tariffs owed to the U.S. or Canadian governments. This party bears responsibility for ensuring compliance with all importing laws. Either the shipper (seller) or receiver (buyer) can be the importer of record.
- Choosing a Cross-border Transportation Provider:-
Just like domestic transportation, you have two main options to move your freight:
i)Work directly with an asset carrier or freight forwarder (or)
ii)Rely on a cross-border 3rd Party Logistics or freight broker.
If you have a well-maintained relationship with a reliable freight brokerage, using their expertise and overall market visibility for cross-border trucking will help you get your freight onto the right truck, at the right price.
A good brokerage will be able to save you extra money by finding a truck that either needs to get back to Canada or home to the United States (or vice versa).
Carriers from Canada and the U.S. aren’t allowed to pick up and haul freight within their non-native countries without proper licensing. This will work in your favor only if your freight is on the back end of their trip. If your freight will pay them to drive home, you’ll often get a relaxed rate.
Good freight brokers or transportation provider understand this and will be able to find the best-fit truck for your freight based on your capacity requirements, the current market pricing and your freight’s destination.
- Paperwork – The key documents you’ll need:-
There is a lot of detailed documentation required to ship freight from the U.S. to Canada (or Canada to the U.S.). Getting the paperwork right is important for quick and easy customs clearance. At the very least, a BOL and a commercial invoice are the two documents that is needed at all time.
In order to make this process as smooth as possible, make sure to have each of these forms prepped and attached to your shipment before it arrives at cross-border customs.
i) Commercial Invoice: The commercial invoice is an important document that provides detailed information about the goods being shipped.
It includes the description of the items, their value, quantity, and the terms of sale. This document helps customs officials to determine the appropriate duties and taxes for your shipment.
ii) Bill of Lading: The bill of lading is a contract between the shipper and the carrier, acknowledging the receipt of goods and confirming their transportation.
It serves as a receipt and provides vital information about the cargo, such as the origin, destination, and trucking method.
In the international trucking world, there are three main types of BOLs:
> Overland/Truckers BOL
> Ocean BOL
> Airway Bill
When moving across the U.S.-Canada border, you’ll only need the former of these, the Overland/Truckers’ BOL which is used to transport freight across an international border via land.
iii) Packing List: The packing list is a detailed inventory of the contents in each package or container. It helps customs officials to verify the declared contents and ensures all items match the information provided in the commercial invoice.
The packing list outlines key information about your shipment such as:
> Total number of packages
iv) Certificate of Origin: The certificate of origin is a document that indicates where the goods were produced, manufactured, and processed. It is essential for determining eligibility for preferential trade agreements and assessing the applicable tariffs.
Under the new trade agreement, the USMCA (or CUSMA as it’s called in Canada), proof of origin is still required, but the information does not have to follow a certain prescribed format.
v) NAFTA Certificate of Origin (for qualifying goods): If your shipment contains goods eligible for the North American Free Trade Agreement (NAFTA) benefits, you’ll need a NAFTA Certificate of Origin.
This document certifies that the goods meet the NAFTA origin criteria, allowing them to benefit from reduced or eliminated tariffs.
It can be completed by the importer, exporter or producer. Another change from NAFTA: the certificate can be signed electronically. Earlier, NAFTA required a wet signature.
vi) Customs Bond: A customs bond is a guarantee that the importer will comply with all customs regulations and pay any duties and taxes owed. It’s a crucial document to facilitate the smooth movement of goods across the border.
vii) Import/Export License or Permits: Depending on the nature of the goods being shipped, you might need some specific import or export licenses or permits from the official authorities. These documents grant you permission to trade certain goods across borders.
- Preclearing your shipment (PARS/PAPS): The Pre-Arrival Review System (PARS) allows customs brokers to submit release information to the Canada Border Services Agency (CBSA) for review and processing prior the goods arrive at the Canadian border.
This quickens the release or referral for examination process for the carrier when the driver arrives at the border with the freight.
The U.S. has a similar system for inbound loads called PAPS, or Pre-Arrival Processing System.
- The Harmonized System (or a Tariff Code): A tariff code is a product-specific code as documented in the Harmonized System (HS) maintained by the World Customs Organization (WCO).
The HS is a standardized numerical method of analyzing traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.
The first six digits of the code are the same in all countries. Each country can modify their codes by adding two or four digits to them. For an instance, 6603.20.3000.
For the export process, you will the U.S. as well as the Canadian codes.
- ACI EManifest: It is a mandatory CBSA (Canada Border Services Agency) security protocol designed to provide advanced notice and data on the commodities and parties involved in the movement of freight.
It is intended to facilitate trade while strengthening border security. Since 2007, highway carriers have had to comply with ACE Manifest requirements when bringing goods into the United States by filing an ACE Manifest at least one hour prior to arrival at the border.
Common mistakes to avoid:
These mistakes are easy to avoid, but if you skip over them, your shipment is likely to get stuck at the border.
This can result in delays and additional fees.
> Waiting too long to establish a customs broker.
> The information on the commercial invoice and BOL do not match.
> Trucking before you’re in total alignment and preparation with your customs broker.
> Not confirming after-hours contact information.
> Under-estimating transit time.
In conclusion, the cross-border trucking journey from the USA to Canada is a central route of international trade, smoothly connecting two nations and their economies.
This intricate process is identified by its challenges, from navigating customs regulations and varying tariffs to optimizing logistics for efficient and timely deliveries.
Its efficiency not only supports commercial activities but also encourages diplomatic and economic ties between the USA and Canada.
By doing so, they can ensure that the movement of goods remains a driving force behind bilateral trade growth, benefiting businesses and consumers on both sides of the border.
You may also like our another blog on the topic US-Canada vaccine mandate.
I'm a HR at OpenFR8 and a passionate blogger. Apart from my day job as HR, reading and writing books/blogs are two of my absolute favorite things to do. I like taking on new challenges and most importantly, I believe in bringing efficiency towards everything I do. I love expressing my thoughts and visions through the medium of words in the form of blogs or articles or books. Till this date, I've successfully published three short-novels on my own and will continue to do so.