Canada and the United States have the largest trade relationship in the world. Its effects touch all industries and understanding its specific quirks and issues is essential for any company wishing to ship across the US-Canada border. Here is a quick primer and some tips for avoiding delays.
The Scoop on Exchange Rates
The exchange rate matters because it’s a driving force behind the shipping capacity balance between the two countries. By keeping an eye on currency fluctuations and forecasts, the savvy cross-border shipper can get a good idea of what capacity markets and trade patterns are going to look like and plan accordingly. A relatively stronger USD leads to greater capacity for entering Canada and a tighter capacity for entering the United States. The opposite occurs with a relatively stronger CAD.
The Scoop on Carriers
Not all carriers offer cross-border shipping. For many, the incentives just aren’t there due to operational concerns and regulation. Those that do have cross-border lanes have to balance inbound and outbound shipments between two countries with a significant freight imbalance. When shipping cross-border, carriers actively seek to minimize deadhead miles (trucks returning home without freight and thus not earning revenue). The most common solution is pick up and deliver something else while returning to their country of origin. This is not always easy, as each country has specific rules regarding the practice. For example, a Canadian carrier having just delivered a shipment to the US is allowed to pick up a new load bound for Canada but is not authorized to pick up additional loads bound for delivery within the United States. Understanding these regulations and incentives helps contextualize industry news and carrier motivations.
The Scoop on C-TPAT
Led by U.S Customs and Border Protection (CBP), the Customs-Trade Partnership Against Terrorism (C-TPAT) was created in 2001. It’s a joint government-business partnership that seeks to secure cross-border shipping and supply chains. Certification is voluntary but has many benefits. The chief of which is shorter wait times at the border via the ability to move to the front of inspection lines, access to Free and Secure Trade (FAST) trade lanes at land borders, lower odds of CBP examination, waived Stratified Exams, and more. The membership itself is free but instituting the necessary operational and compliance improvements can be quite costly. More information on CTPAT certification can be found here.
How to avoid delays when shipping cross-border
- Mind the paperwork: drivers showing up at the border with missing or incomplete paperwork (shipper documentation, carrier manifests, etc.) are one of the primary sources of delays. Be vigilant, plan ahead, and make sure all the i’s are dotted.
- Vet your carriers and service providers: seek out those with CTPAT certifications.
- Pay attention to holidays: Canada and the United States share some of them, but not all. Be sure to make note of important holidays and long weeks and keep in mind that, generally, border crossing usually takes longer around these times.
- Hire experts: in addition to expanding your carrier options, a 3PL provider can help you with both paperwork and vetting, as well as advise you on applicable duties, taxes, restrictions, and fees. By putting more potential carriers at your disposal, they’ll help you get the best prices ad services to fit your needs and budgets.