What to Know About Cross Border Shipping

Cross border shipping is a detailed process. The goods need to be packed securely with sufficient insurance coverage, the trucks need to leave on schedule, and all the documents must be pat and dry. One lapse in any of the above can cause delays or other problems. 

But with all that said, cross border shipping is well worth the effort for businesses that want to expand their market. 

In this guide, we’ll talk about cross border shipping across Canada and the USA, coming from the Canadian side. Though many tips here are specific to this border, the general best practices on cross border trucking can apply in virtually all scenarios.  

We’ll talk about the following points: 

• The Benefits of Cross Border Shipping
• Staying Away from Prohibited Goods
• Customs Clearance
• The Role of the Customs Broker
• The Necessary Documents
• Speeding Up The Process with PAPS and PARS
• The Importance of TMS and Warehouse Location
• The Importance of Cargo Insurance

Let’s begin!

1. The Benefits of Cross Border Shipping

Before we dive right into the best practices for cross-border trucking, let’s go over its benefits for your business. 

a. Expand Your Customer Base

The biggest benefit of cross-border shipping is that you can cost-effectively expand your customer base. By not needing an established physical presence to sell in another region, you can:

• Save on rent, utilities, and other overhead costs; 
• Save on extra packaging needed for lengthy warehouse storage; and
• Have flexibility regarding when and where to send goods.

b. Establish a Customer Base

In some cases, cross border shipping is necessary for establishing (and not just expanding) a customer base. If you find that your local area’s market is already saturated with similar products, cross border trucking can help you tap another market. 

c. Sell Seasonal Products Where They’re Needed

Some products may only be seasonal in your area. However, other areas may need those products year-round or for more extended periods. In such cases, cross border shipping will help your business get an added revenue stream for otherwise lull periods of the year. 

2. Staying Away from Prohibited Goods

For E-commerce businesses that are just getting started on cross-border shipping, the first and most important tip is to find out what the prohibited goods are. This differs per region. If you are a Canadian business shipping to the USA, check out this list of items that cannot be shipped to the USA to ensure that your items are good to go. 

3. Customs Clearance

All items crossing the USA-Canada border need to pass through customs clearance. However, depending on the valuation of the items, the process differs. As of the publishing of this guide, here’s what customs clearance looks like for different value ranges. 

a. Items Under $800 - De Minimis or Section 321 Shipment

Since 2016, items under $800 can enter the United States duty-free. Low-value shipments like these can cross the border with very little delay. However, declaring a Section 321 Shipment still has its own paperwork to be submitted to Customs and Border Protection.

b. Items Valued $800 to $2500 - Informal Entry 

If shipped goods are valued at $800 to $2500, they are eligible for informal entry. Though informal entry is considered less stringent than a formal entry shipment, the items are still subject to duty and need a few documents. 

c. Items Valued Above $2500 - Formal Entry

Most E-commerce businesses that use cross border shipping will have goods valued at $2500 or more. This is particularly true for businesses that utilize Full Truckload Shipping. Generally, such goods are required to be covered by a bond. The liquidation process also differs from informal entry.

4. The Role of the Customs Broker

A customs broker is a professional who assists in the clearing of shipments through customs. Essentially, they will represent your business and ensure the process goes smoothly. They typically specialize in a certain location. Therefore, you can count on them to be informed about any recent changes in requirements or regulations. 

It is highly recommended that you contact a customs broker at least two weeks before formal entry cross border shipping.

5. Documents Needed for Cross Border Trucking from Canada to the USA - Formal Entry

For formal entry cross border trucking from Canada to the USA, you will need the following documents: 

• Commercial invoice - this is required for foreign trade and to identify the items crossing the border.
• Bill of lading - this contains information about the carrier, the shipment's origin, and where the shipment is going.
• Certificate of Origin - a uniform certificate needed to prove that goods qualify for preferential tariff treatment. 
• Importer ID Number - this is used by customs for bond coverage, liquidation, and so on. 
• Either (a) Entry Manifest or (b) Entry/Immediate Delivery - the carrier is responsible for these forms. 

Note: If your documents are incomplete or don’t match, this will cause problems at the border and subsequent delays. Therefore, it’s crucial to cross-check and double-check the above documents carefully. 

6. Speeding Up the Shipment with PAPS & PARS

Both the customs of the USA and Canada have processing systems wherein information about the goods can be sent before the goods arrive at the border.

The USA customs calls this the Pre-Arrival Processing System (PAPS). Meanwhile, Canada’s customs calls this the Pre-Arrival Review System (PARS). Though they have different names, they offer the same benefit: a more seamless, time-saving process. 

7. The Importance of TMS and Warehouse Location

Once you have a grasp of cross border shipping, consider strengthening your shipping strategy with a Transportation Management System (TMS) and an optimized warehouse location. 

a. Transportation Management System (TMS)

As you scale up your cross border trucking efforts, you can consider investing in an effective TMS. This program allows you to get real-time information on your shipments, decrease transport costs, assist in transmitting an e-Manifest, and more. 

b. Optimized Warehouse Location

If you plan to do cross border shipping more frequently, optimizing your warehouse location will save time and reduce costs. Overall, these factors will make customers prefer you over the competition. 

8. Insurance Matters

Does your carrier have insurance? Even if the answer is yes, this does not automatically mean your shipments are protected for their entire value. Freight forwarder insurance, sometimes called freight insurance, protects the carrier from liability. It typically will not cover the full value of your goods in the event of damage or loss. To protect your goods through the process of cross border trucking, you need cargo insurance. 

Learn more about the difference between freight forwarder and cargo insurance here: Cargo vs. Freight Insurance: What’s the Difference? 

Get Reliable and Hassle-Free Insurance for Your Shipments

Cross border trucking has enough nuances. We’re here to make sure you get cargo insurance that is reliable, cost-effective, and hassle-free. Our dedicated team at KASE Insurance will not only match you with the best, customized policy, but we will also assist with all of your ongoing insurance needs. 

We can show you just how easy it is to fully protect your items as they go through cross border shipping. 

Contact our team today to learn more.