Customs Broker Basics: What Cross-Border Shippers Need to Know
Whether you're shipping from Canada or Mexico to the U.S. or vice versa, your freight is going to have to clear customs.
Importing and exporting freight can be complex; there is a lot of documentation and paperwork required.
Fortunately for you, thousands of trucks cross both borders every day — there is an industry of experienced cross-border providers that can help make shipping easier.
If you're new to shipping Canada or Mexico cross-border freight, one of the first things we suggest is to set up a reliable customs broker.
Let's answer some basic customs brokerage questions so you can start the process with confidence.
What is a customs broker?
Customs brokers facilitate the clearing of shipment with customs.
They handle the trade duties and fees with the country where the freight is being imported into, so it can quickly cross the border and deliver to its final destination.
What does a customs broker do?
Each country operates under a different set of regulations and rules regarding goods entering or leaving its borders.
Customs brokers are responsible for knowing these rules, which are constantly changing, and making sure your shipment smoothly clears customs and avoids any fines or penalties.
Here's an overview of their key functions:
- Figuring out how to classify your freight
- Assessing tariffs and duties
- Making sure you have all the proper paperwork and documentation
- Filing your paperwork with Customs and Border Patrol
All of this allows you to focus on running your business, while they manage the details of border crossing.
Do I need to use a customs broker for cross-border Mexico or Canada?
No, you don't need one, but you should probably use one regardless.
Though you can clear your own shipment with customs, a good broker is an experienced professional. They 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 both Canada and Mexico.
How do I find a customs broker?
The U.S. Customs & Border Protection website has a list of brokers by port.
An experienced cross-border freight provider will work with several brokers on a daily basis. They can help you refine your search and make some recommendations.
For instance, Coyote is familiar with all major providers and, as part of UPS Supply Chain Solutions, we can also help set you up with their customs brokerage solution.
Pro Tip: You'll want to work with a broker that operates 24/7, as freight will often cross the border late at night.
Does it matter what side of the border my customs broker is located on?
The short answer is yes. The standard is a little bit different in Canada vs. Mexico.
For Canada/U.S. Cross-Border
- You need to have a customs broker on the side of the border you’re sending freight to.
- If you’re in Canada and exporting to the U.S., you need a U.S. customs broker.
- If you’re in the U.S. and exporting to Canada, you need a Canadian customs broker.
Pro Tip: If you’re importing on both sides of the border, you may not need two separate customs brokers.
Many customs brokers have operations on both sides of the border. Though the offices and contacts will be different, they collaborate with each other.
For Mexico/U.S. Cross-Border
- You will need a customs broker on both sides of the border.
- Similar to Canada, most cross-border customs brokers have operations in both Mexico and the U.S., so you will likely only have to hire one provider to cover your entire shipment’s journey.
Related: Canada vs. Mexico Cross-Border: 5 Things Shippers Need to Know
How long does it take to set up a customs broker?
You should allow at least two weeks to set up your customs broker.
This is not a process you can complete in an afternoon. Though you may be able to complete it in as little as five business days, this is not something you want to rush.
In fact, this is one of the biggest mistakes of we often see in cross-border shipping.
Your customs broker is representing your business at the border. You're giving them power of attorney. They need to know all about your shipping process. They need to get acquainted with your shipper and carrier.
Cutting corners is a big risk to creating costly delays at the border.
What if my customer on the other side of the border already has a customs broker?
That’s great — that means they likely have some experience with cross-border shipping, and it may actually be a good idea to use their customs broker.
Whether you’re shipping freight from your own facility, or working with a customer or vendor, it’s important that there is at least one person involved in the actual shipping process who has some cross-border experience to help with the paperwork.
You set up your customs broker. Now what?
Setting up an experienced customs broker is only the first step in the cross-border shipping process.
Now it's time to choose a provider and get ready to ship.
These step-by-step guides will give you everything you need to move your freight across the border.