Law and Border: 5 Ways to Boost Canadian Clearance Efficiency
To help businesses reach the Canadian market more efficiently, Purolator International offers these tips for minimizing the risk of having a shipment delayed at the border.
1. Don’t underestimate the border clearance process.
Successfully moving goods into Canada—which also means exporting goods out of the United States—is a multistep process that requires detailed knowledge. Failure to successfully navigate any of the steps in the process can result in shipment delays and fines. This is why many businesses entrust compliance to an experienced customs broker or logistics provider.
According to U.S. Customs and Border Protection (CBP), 90 percent of all import transactions are filed through a broker. But even with an experienced broker managing the clearance process, a business still has an important role to play.
Keep in mind that the shipper is ultimately responsible for all information supplied to customs. As such, CBP and/or Canada Border Services Agency (CBSA) will hold the shipper—and not the customs broker or transportation carrier—responsible for any mistake.
2. Duty paid or unpaid? Select the correct shipping terms.
Shipping to Canada can be further exacerbated when the parties involved in the transaction fail to agree on established terms of service. This can be a confusing exercise, but it is critical. International shipping operates under a uniform set of standards—known as Incoterms—that establish clear expectations and responsibilities between buyers and sellers.
Because of Incoterms, buyers and sellers have a clear understanding of what constitutes "delivery" for example, and which party is responsible for unloading a vehicle, who is liable for certain payments, and who has responsibility for customs compliance. This avoids costly mistakes and misunderstandings.
3. Become a non-resident importer.
The Canadian government does not allow U.S. businesses to collect Canadian sales tax or act as an importer of record in clearing goods into Canada. This means a business may face the highly inconvenient and unwelcome dilemma of having to collect taxes from Canadian customers at time of delivery.
Further, it is possible the Canadian customer will have to become personally involved in the customs process by retrieving the shipment from a local customs office. Neither of these situations is helpful to a U.S. business trying to build its brand in the Canadian market.
Fortunately, the Canadian government addresses this problem through its Non-Resident Importer (NRI) program, available through the CBSA. As a non-resident importer, a U.S. business is allowed to act as an "importer of record," which offers many benefits that include:
- The ability to factor in all duties, taxes, and brokerage fees at time of purchase
- Greater control over delivery times
- The ability to compete on a level playing field with Canadian businesses
- The potential for reduced supply chain expenses
- Enhanced customer satisfaction
4. Take advantage of state and federal resources.
Many government resources are available to address business concerns and to offer a helping hand to businesses determined to enter the world of international commerce. Each state offers assistance to businesses interested in expanding sales or operations beyond the United States. Specific resources vary, but in general a business can look to its state government for services ranging from official trade mission visits to market research to funding opportunities.
5. Experience matters; choose the right logistics provider.
Partner with a logistics company that has been there before. There is no substitute for experience when it comes to understanding the clearance process.