Freightcom’s Complete Guide to Cross-Border Shipping

Like any major milestone in business, growth beyond the Canadian border can be daunting.

As with any form of international shipping, cross-border shipping presents new, unique challenges that, if not properly navigated, can turn into much larger problems for your business.

With Freightcom’s new Lightweight Parcel Program offering our best ever service on one-to-two-pound parcel shipments, we thought it was time to compile our most comprehensive guide on cross-border shipping yet.

For shippers who may be new to shipping cross-border, or who may need a refresher on the finer points of the process, you’ve come to the right place.

Tips for First-Time Cross-Border Shippers

Navigating the customs process can be overwhelming, especially if it’s your first time shipping cross-border or internationally.

These tips will help you avoid common pitfalls and ensure your shipments clear customs smoothly.

Accurately Declare the Value of Your Goods

To avoid delays and penalties, make sure to accurately declare the value of your goods. This value should include the cost of the goods, shipping fees, and insurance.

As a rule of thumb, it’s always preferable to round up the declared value of your goods, as under-declaring the value of your goods can result in fines and the seizure of your goods.

Understand the Regulations of the Country You're Shipping To

Shipping regulations and requirements can vary widely depending on the country you're shipping to.

Make sure to research the regulations of the country you're shipping to and ensure that your goods comply with all applicable requirements.

This may include obtaining permits or certifications, labelling your goods correctly, or using specific packaging.

Use Reliable Shipping Carriers

No matter what the destination is for your goods, carriers are the backbone of their journey.

Using a reliable shipping carrier can help ensure that your shipments reach their destination on time and in good condition.

Be diligent in ensuring that you are booking your shipments with carriers who have a strong track record with cross-border and international services.

Accuracy is Everything with Documentation

Customs authorities require proper documentation for shipments crossing into the United States, as well as information about everything being shipped.

Including the proper documentation to present to border guards will ensure that they can easily do their job and to avoid hindrances or delays for you and the driver. You will require the following documents:

Certificate of Origin
A document declaring a shipment’s country of manufacture. Required as part of the USMCA.  

Customs Invoice
A document declaring the value of goods contained in a shipment. Sometimes known as a Pro Forma Invoice.

Bill of Lading
A document that acts as a deed of title, as well as a contract between the shipper, consignee, and carrier.

Clearly Label and Organize Your Goods

After you've confirmed that your goods can be exported to the US, you'll need to determine the tariff classification number. The combination of the country of origin and these numbers will help you determine the cost of the duties you will pay when importing.

Typically, a customs broker may be able to identify which tariff classification will apply to you. You can, however, determine your classification through the Harmonized Tariff Schedule Search.

While it is best practice to label all goods clearly and accurately on your shipment, the reason for this is two-fold. Not only is it a courtesy that will it aid in any sorting required by the consignee upon receipt, but in the event that customs authorities select your shipment for inspection, clear, accurate labelling will prevent any confusion or suspicion that may result in your shipment being delayed, or even seized.

Duties and Taxes for Cross-Border and International Shipments

SMBs often face complex customs requirements, including duties and taxes.

To guarantee shipments clear customs without incident and to prevent unforeseen charges, it's crucial to understand these obligations.

In this section, we'll cover the basics of duties and taxes and provide some tips on how to navigate the customs process and help set your business up for international success.

What are Duties and Taxes?

Duties are fees imposed by the government on goods imported into a country. These fees are designed to protect domestic industries and generate revenue for the government.

The rate of duty varies depending on the country of origin of the goods and the type of goods being imported.

Taxes are another form of fee imposed by the government on imported goods. These can include sales tax, value-added tax (VAT), or goods and services tax (GST). As with duties, the rate of tax varies depending on the country of import and the type of goods being imported.

The declared value is the total value of your goods, including shipping and insurance costs.

To determine the applicable duties and taxes for your shipment, you'll need to determine the Harmonized System (HS) code for your goods.

The HS code is a standardized system used to classify traded products.

Once you know your HS code, you can use the Canada Border Services Agency's (CBSA) tariff database to estimate the applicable duties and taxes.

In some cases, you may be eligible for a duty exemption or reduction. For example, if you're shipping goods to a country that has a free trade agreement with Canada, such as the US or Mexico, you may be eligible for a reduced or waived duty rate.

Source: Wikipedia

Estimating the Duties and Taxes

Customs duties are calculated as a percentage when shipping goods to the United States. The Harmonized Tariff System establishes duty rates for nearly every item that one could ship.

This does not mean, however, that determining duty rates is an easy task. Many variables can affect duties, and thoroughness and diligence are key in assuring that your shipment is not held at the border on account of unpaid duties.

It is worth noting that, in some cases, one may not need to worry about duties and taxes. If a shipment falls within the de minimis value of $800 USD or less, then in most cases that shipment will be exempt from duties.

Cross-Border Shipping Mistakes

In this section, we’ll be looking at a couple of the biggest mistakes you could make when shipping cross-border, what they can mean for your shipment, and how to make sure you never have to worry about them.

Your Documentation is Incomplete or Incorrect

As we have discussed in the past, proper documentation is the backbone of the shipping journey, no matter what you are shipping or where you are shipping to.

Due to the complex nature of cross-border shipping, the required documentation is itself more complex and all information must be complete and accurate in order for the shipment to be completed successfully.

Further, just as the complexity and scope of documentation grows in relation to the shipment, so too do the consequences of incomplete or incorrect documentation.

Undeliverable cross-border shipments may, in the best-case scenario, be denied pickup by a carrier, and at worst could be held indefinitely at the border. No matter the degree of consequences, this will mean hefty chargebacks, wasted time, and undelivered goods.

The trick to avoiding this particular mistake is two-fold. Firstly, it is vital to know what documents are required to successfully ship goods cross-border. These include a shipping label, certificate of origin, bill of lading, and commercial invoice.

Each of these documents play a distinct role in communicating important information about your shipment to the carriers, border services, and recipient.

In understanding which documents are required for cross-border shipments, the second part to avoiding mistakes with your documentation should be simple: ensuring that all information on these documents is complete and accurate.

Best practice for this is to simply be diligent when filling out each piece of documentation, remember that more information leads to less confusion, and of course review all information at least once before you finalize anything.

Your Carrier is Not Certified for Cross-Border Shipping

There is certainly no shortage of carriers available to offer Canadian businesses a wide array of shipping services. It can be overwhelming for a shipper to make an educated decision and choose a carrier that fits their needs while still trying to maintain a low operational overhead.

Without the right education or diligence, it’s entirely possible that the carrier that you use can cause more problems than they solve.

This becomes especially important once we move into cross-border shipping. As important as it is to ensure that your goods are certified to enter another country, it is equally important to ensure that the carrier you are using also has the proper certifications for cross-border travel.

To start, it is important to note that, per US Customs and Border Protection (CBP) regulations, any international carrier entering the US must have an International Carrier Bond on file. In short, this means that the carrier can move goods across the border to an authorized location without a customs release.

Secondly, it is beneficial when choosing a cross-border carrier to seek out one who is certified under the Free and Secure Trade (FAST) program or the Customs-Trade Partnership Against Terrorism (C-TPAT) program in conjunction with the CBP.

These certifications denote that a carrier has been vetted by the CBP and deemed a trusted, low-risk carrier, which leads to a faster, less restrictive border crossing.

While these certifications are not explicitly required for carriers travelling into the US, they can greatly expedite the border-crossing process, and serve as a means of highlighting a carrier’s trustworthiness and reliability.

Freightcom is the Authority for All Your Shipping

Whether your business is shipping LTL or courier, B2B or B2C, domestic or cross-border, Freightcom offers you the tools to manage all your shipping easily and intuitively.

Our all-in-one platform offers you discounted rates on a wide range of parcel and LTL shipping services from North America’s leading carriers, for zero upfront or monthly fees!

Contact one of our shipping experts today and let Freightcom get your business wherever it needs to be for less!