Canada is one of the United States' most important trading partners — second behind only Mexico in 2019.
With the 2020 update to the United States-Mexico-Canada Agreement (USMCA), that trade relationship will continue growing.
Every year, over $525 billion USD 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 Canada-U.S. border every day, and though it's extremely common, it is more complex than moving freight domestically.
You’re dealing with two governments and clearing customs — there’s a lot to keep track of.
We’ll walk you through all the basics, giving you a step-by-step process to get your freight over the border, whether you're shipping truckload freight from Canada to the U.S., or the U.S. to Canada.
Shipper's Guide to Moving Cross-Border Canada Freight
- How to Ship Across the Canada-U.S. Border in 10 steps
- Setting Up a Customs Broker
- Establishing an Importer of Record
- Choosing a Cross-border Transportation Provider
- Paperwork: the Key Documents You'll Need
- Preclearing Your Shipment (PARS/PAPS)
- The Harmonized System
- Common Mistakes (Don't Do These 5 Things)
Though a good cross-border freight services provider will make things easier for you, there are some steps you need to take before shipping.
Specifically, you will want to set up a reliable customs broker.
Though you can clear your own 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.
Don't have a customs broker for your shipment?
Learn everything you need to know about the basics of customs brokerage.
The importer of record will be the party listed on the customs documents and is responsible for handling any tariffs owed the U.S. or Canadian governments.
This party bears responsibility for ensuring compliance with all importing laws.
The shipper, receiver or even a third party can be the importer of record.
Who Should Be the Importer of Record?
If you are less experienced with cross-border freight, and your customer on the other side of the border already has a customs broker set up and handles these shipments frequently, it's often a good idea to let them be the importer of record.
This is common practice. Even if you’re ultimately paying the tariffs, the importer of records’ customs broker can handle it up front and then invoice you.
Furthermore, it is always easier for a party on the destination side of the border to act as the importer of record.
Why? There are extra steps during the set-up process for the importer of record to be on the exporting side of the border.
Pro Tip: You can still arrange your own transportation provider without being the importer of record.
Similar to domestic transportation, you have two main options to move your freight:
- Work directly with an asset carrier or freight forwarder
- Rely on a cross-border 3PL or freight broker
An experienced cross-border 3PL maintains relationships with hundreds of cross-border freight carriers, which can open you up to flexible capacity and pricing.
It can be hard to get visibility into the entire cross-border Canada carrier market, especially for small and medium-sized businesses.
Working with a 3PL, you can take advantage of a large network to access backhaul lanes for competitive pricing.
Pro Tip: If you choose your own carrier, they must have the authority to operate in both the U.S. and Canada. Not just any trucking company can haul on both sides of the border.
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 essential for quick and easy customs clearance. At the very least, you're going to need a BOL and a commercial invoice.
Bill of Lading (BOL):
You will want to have a customs broker before you can fill out this contract between the freight carrier and the shipper.
It also provides the driver and carrier with all the essential details needed to process the freight shipment and invoice it correctly, such as the shipper’s address and contact information and a description of the goods in transport, including the size and weight.
This document will assist the importer in clearing the goods with customs.
You must have the following information to properly fill out this form, and it must match the information in the BOL:
- Vendor’s full legal name, address, and country
- Consignee full name and address
- Detailed description of each item being shipped
- Net/gross weight
- Unit price of each item (using the payment currency)
- Extended price
- Payment currency
- Terms of delivery and terms of payment
- Date on which goods began shipment
- Reference numbers
- Import license (if applicable)
- Freight charges/insurance
Certification of Origin:
Under NAFTA, the U.S., Canada and Mexico required a uniform Certificate of Origin to prove that imported goods qualified for preferential tariff treatment.
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 prescribed format.
It can be completed by the importer, exporter or producer. Another change from NAFTA: the certificate can be signed electronically. Previously, NAFTA required a wet signature.
Not every cross-border load is the same — depending on your exact shipment, you may need additional paperwork.
This is where an experienced customs broker will help you out.
Work with them at least a full week before your shipment to verify all the paperwork you’ll need.
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 classifying 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 the export process, you will need both the U.S. and Canadian codes.
Pro Tip: Your customs broker will help you figure out the right classification, how to declare your freight and how much duty you need to pay.
The Pre-Arrival Review System (PARS) allows customs brokers to submit release information to the Canada Border Services Agency (CBSA) for review and processing before the goods arrive at the Canadian border.
This speeds up 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.
These mistakes are easy enough to avoid, but if you skip over them, your shipment will likely 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.
- Shipping before you're in total alignment with your customs broker.
- Not confirming after-hours contact information.
- Underestimating transit time.
Related: Learn how to avoid the 5 mistakes of cross-border shipping.
You've learned the basics of cross-border shipping.
Now that you know about the paperwork, customs and service options, let’s quickly walk through the full process step-by-step.
10 Steps to Moving a Cross-Border Canada Truckload Shipment:
- Establish the importer of record.
Can be the shipper/exporter, or importer/receiver.
This will be the party arranging the customs broker and paying duties and fees (at least up front).
- Set up your customs broker if you’re the importer of record.
Allow at least a full week for the selection and set up of a broker.
- Speak to the customs broker to make sure you have everything squared away.
Be transparent with the broker. Ask questions.
They’ll guide you through the process and tell you everything you need.
- Get all your paperwork together.
Your customs broker will tell you all that you need, but you will at least need a BOL and a commercial invoice.
- Select your freight forwarder/3PL and/or carriers.
Choose a transportation provider that has experience with shipping on both sides of the border.
Look to a reliable 3PL for more flexibility and competitive options.
- Connect your carrier and your customs broker.
Once you decide who is going to transport your freight, they need to be in communication with the customs broker.
- Ship your freight.
Once the importer, exporter, transportation provider and customs broker are in total alignment, it’s time to move your shipment.
- File documents with the customs broker, based on what’s on the BOL and commercial invoice.
Once the product ships, and you have the final product count and descriptions, you can finalize the paperwork and send it to the broker.
The shipper, the receiver or the carrier may do this — it doesn’t matter, as long as someone does.
- Pre-clear your shipment.
As the driver heads toward the border, the customs broker will contact the appropriate customs agency to pre-clear the shipment.
The carrier notifies the border with their PARS/PAPS that a driver is on the way. Anyone can look online to see if the load has cleared.
- When the driver arrives at the border, the shipment should be precleared by customs.
The driver then passes through border patrol. Depending on traffic and the border crossing point, this can take as little as a few minutes, but generally no more than two hours.
That's it! Your shipment is across the border.
Once the driver has crossed, they head to the receiver for final delivery.
Now You're a Canada Cross-Border Pro. How about Mexico?
The North American market is constantly growing.
As companies look closer to home for suppliers or new customers, many also look south to Mexico.
Though similar, shipping over the U.S.' northern and southern borders is not exactly the same.
If you want to import or export, you'll need to know these key differences between Canada and Mexico cross-border freight.
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