Did you know that the U.S. – Canada border is one of the most important borders in the world?
Canada is the number one market for U.S. exports and 60% of Canada’s overall trade is with the United States.* Last week, the United States, Canada, and Mexico struck a new tri-lateral agreement to replace NAFTA, now called USMCA. Once ratified by all three countries, USMCA ensures the U.S. and Canada will remain strong trade partners into the future.
Despite these close ties between our two countries, many companies continue to make common mistakes at the Canada/U.S. border.
Top six issues companies face when crossing the Canada-U.S. border.
1. Planning and preparation
Cross-border shipments require planning. Same day, cross-border service adds complexity. Border-crossing shipments with short lead times benefit from having a standard process in place. When you create and utilize a standard process for same day cross-border shipments the customs broker has a greater likelihood of success for same day entry.
Whenever possible, you can better position your freight and your business if you make time to find appropriate carriers and drivers and prepare your compliance documentation. Pulling together last minute details at the border will not lead to the best results.
2. Inexperienced customs brokers
Risk-based supply chain security, trade, contraband, and agricultural examinations happen at the border. All freight crossing the border can undergo cargo examinations. These inspections can often add unwanted time to your supply chain.
While inspections may be unavoidable—especially if your freight falls into certain categories—an experienced in-country customs broker can make all the difference. It’s their job to coordinate with inspectors and facilities to secure a timely release of your freight. And remember, most border examinations are resolved within 24 to 48 hours.
3. Poor relationships with capacity providers
Building strong capacity relationships is key to smooth cross-border shipping. Close collaboration with your carriers can help overcome several of the most common cross-border pitfalls. While you are not the individual physically crossing the border, it’s up to you to make it as easy as possible for the driver who is.
In that endeavor, C.H. Robinson offers a few tools to help drivers check clearance status ahead of time.
• From Canada to the U.S., use our PAPS tracker
• From the U.S. to Canada, use our PARS tracker.
4. Insufficient documentation
Incomplete paperwork at the border is a huge mistake that can stall your shipment’s progress. According to the Ministry of Transportation, Ontario, port directors at all major border crossings report that 35% of drivers show up at primary inspection with insufficient documentation for a shipment.
If this happens, they will stop your shipment before it crosses the border. It will not be able to continue until the paperwork is completed, resubmitted, and reviewed by customs agents. This can add days to your delivery time.
Open communication between shippers and carriers combined with great technology can help prevent you from making this mistake. When carriers come to expect two-way communication, they’ll feel confident discussing paperwork issues with you before it becomes a problem. And if all of your shipment information is in one global technology platform, like Navisphere®, it’s easy for everyone involved to access the necessary information.
5. Unprepared carriers
This goes along with insufficient documentation, but also extends to the drivers themselves. Beyond shipment paperwork, the drivers hauling your freight must have a valid passport and be in good standing with the customs authority.
If a driver has a criminal record, previous border infractions, multiple convictions for driving under the influence, or other misdemeanors, it may disqualify them from hauling cross-border freight entirely. Not vetting carriers sufficiently could put you at risk of customs authorities turning your freight away all together.
Due to the complications mentioned above, shippers who limit themselves to the same regional carriers could end up with problems finding qualified drivers. Expanding your carrier options can help with this challenge. Using an experienced, vetted carrier pool can help reduce the risk of holds and delays at the border.
A third party logistics provider (3PL) like C.H. Robinson can assist in identifying qualified carriers who can meet your service and cost requirements on both sides of the border.
6. The wrong accounting software
This may be a bit of a surprise; many don’t think of it until it becomes a problem. But accounting software that works for both Canada and the United States is critical.
Did you know that 45 of the 50 United States collect state sales tax and all Canadian provinces collect Provincial Sales Tax (PST)? But tax rates vary widely by state/province. And depending on where you’re shipping, the PST may be blended into the Harmonized Sales Tariff (HST).**
The wrong accounting software could result in costly fines after the fact for failure to pay appropriate taxes at the time of crossing. Choose accounting software that covers all states and provinces in both countries.
Even if you only need to worry about one shipping lane today, future growth or market changes may mean you’ll need more lane options with different taxes and fees in the future.
If you only remember one thing
If navigating the Canada/U.S. border is an important part of your supply chain, working with a single company that can solve all of these common issues is often the right solution. As the #1 North American 3PL, C.H. Robinson combines the knowledge that comes from executing thousands of loads every day, with a large scale customs brokerage, and in-country expertise.
*Source: Alanna Petroff, “These are America’s biggest trading partners,” CNN Money,
December 15, 2016.
**Source: “2014 Sales Tax Rates,” TaxTips.ca, accessed November 15, 2014.
