Exporting to the United States - Packing and shipping your goods

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• 8. Packing and shipping your goods
  • 8.1. Basic packing and shipping requirements
  • 8.2. Shipping labels
  • 8.3. Shipping methods
  • 8.4. Reporting your exports
  • 8.5. Controlled, prohibited and regulated exports
  • 8.6. Using freight forwarders
  • 8.7. Insurance

8. Packing and shipping your goods

Both you and your buyer want your goods to cross the border easily, to arrive on time and to be intact when they reach their destination. Proper packing and shipping, with complete and accurate documentation, permits and licences, will contribute a great deal to trouble-free exporting.

8.1. Basic packing and shipping requirements

How you pack your goods will depend, of course, on what the goods are, how they will be shipped, and what hazards they may encounter on their way to your buyer. Remember that a truck shipment going from Regina to Miami will be on the road for several days and will be subject to vibration and shock; moreover, if it leaves Canada in winter for the southern United States, it will travel from a cold, dry climate into a warm, humid one.

It is in your interest to pack your shipments securely. If a shipment arrives in a damaged state because of improper packing, your buyer will not accept it and may decide not to order goods from you again. Moreover, insurance often will not cover goods shipped in unsuitable or insufficient packaging.

Agriculture and Agri-food Canada's website has a useful list of shipping resources that are applicable not only to agri-food but to most other sectors as well. Refer to www.ats-sea.agr.gc.ca/exp/con-eng.htm for more information.

8.2. Shipping labels

Shipping labels and marks should be large, clear, and waterproof. The shipping information should include:

• port of destination and name, address and phone number of consignee on at least three faces of the package (top, one side, one end);

• any necessary cautionary labels (e.g. "Fragile," "Use no hooks");

• transit instructions;

• package dimensions and weight;

• package number; and

• invoice and/or order number.

8.3 Shipping methods

There are several ways of transporting your product to your buyer.Which one you select depends on the nature of the product, where it's going, how much of the product is in the order, and so on. No matter which you choose, however, all shipments will require some form of customs documentation, according to whether they are an informal entry (valued at US$2,000.00 or less) or a formal entry (valued at more than US$2,000.00).

The most common shipping methods are:

• Truck: Many trucking companies carry Canadian exports to the United States. Rates depend on whether you are sending a full truckload or less than a truckload.

• Bus: If your product is relatively small and light, bus shipment may be an efficient, cost-effective option.

• Air: Air shipment is fast, with reasonable insurance and warehousing rates.

• Rail: Large bulk shipments are well suited to rail shipping. This method can also involve truck movement to transport the cargo from the rail terminal to your buyer. You get a lower rate for a full carload than you do for a partial carload.

• Mail: For small shipments that comply with Canada Post's size, weight and content regulations, mail can be a cost-effective delivery method. All mail shipments to the U.S. are diverted to U.S. Customs for checking and for assessment of duty where applicable.

• Courier: Couriers do not offer COD service when shipping directly from Canada, so you will have to use some other means to get paid. Also, if your shipment requires formal entry because it's valued at more than US$2,000.00, the customs brokerage fees can price your product out of the market. To get around this, couriers recommend that you send several items at a time as a consolidated entry. This means that they are considered a single entry for customs purposes, so you pay only one brokerage fee. After clearing customs, the packages travel onward to their individual buyers.

8.4. Reporting your exports

Reporting your goods exports is mandatory under Canadian regulations except when you are exporting to the United States, Puerto Rico or the U.S.Virgin Islands. There is no reporting requirement for U.S.-bound exports because there is an agreement between the U.S. and Canada whereby Canada gets its export data directly from American import data.

Note that you do have to report exports that are shipped through the U.S. to another country (referred to as "intransit goods").

Some goods, however, are classified by Canada as controlled, prohibited or regulated. To export these to the U.S., you will need an export permit; for more detail, see the next section.

For a good general guide to Canadian customs regulations as they affect exporters, be sure to look at the CBSA's Guide to exporting commercial goods from Canada.

8.5. Controlled, prohibited and regulated exports

Quite a few goods fall into the controlled or restricted category and cannot be freely exported from Canada. Examples of this category are certain agricultural commodities, cultural property, pharmaceuticals and some types of technology. The prohibited category includes things such as (understandably) illegal drugs and counterfeit money.

Unfortunately, there is no comprehensive published list of these products. To find out if yours is among them, you can get in touch with the Government of Canada’s Trade Controls & Technical Barriers Bureau (TCTBB) at
www.international.gc.ca/controls-controles/index, whose contacts page gives telephone numbers for queries about various kinds of controlled goods.

Another place to look for information is the CBSA Publications and Forms page at
www.cbsa-asfc.gc.ca/publications/menu-eng.html. It lists guides, forms and documents for Canadian exporters.

Note that these are Canadian regulations, not U.S. ones, and only affect your ability to ship the goods out of Canada. The U.S. import regulations for these types of goods are a separate matter and are discussed in Section 9.3, "U.S. Legislation Affecting Exporters."

8.6. Using freight forwarders

Dealing with shipping and customs can be very complicated and time-consuming, especially when you are still finding your way around. An alternative to managing everything yourself is to use a freight forwarder.

Using a freight forwarder can have many advantages. A forwarder who specializes in moving goods to the United States will be familiar with U.S. import regulations, with the shipping methods that best suit your product and with the documentation and procedures needed to move it to its destination. A forwarder can also give you quotations on insurance, freight and other shipping services.

Forwarders normally offer these services for a stated fee plus documentation charges. Do not forget to factor these costs into the price you charge for your product.

A freight forwarder should, ideally, satisfy the following criteria:

• Be a member of the Canadian International Freight Forwarders Association (CIFFA). The CIFFA Members Directory can be found at www.ciffa.com.

• Be a member of the International Air Transport Association (IATA).

• Offer a complete line of services such as brokerage, insurance and packaging, all at competitive rates.

• Have a list of satisfied customers you can contact for references.

• Be familiar with your product and with the procedures and requirements for shipping it to the U.S.

• Be large enough to handle your volume of shipping and to provide the scheduling you need.

• Have warehousing facilities.

• Have errors and omissions insurance. This is a form of liability insurance that covers the forwarder against a customer's claims for negligence in clearing and forwarding the customer's goods.

Agriculture and Agri-food Canada's website has a useful page on freight forwarders that is applicable to most sectors. Refer to www.ats-sea.agr.gc.ca/exp/4153-eng.htm.

8.7. Insurance

International carriers assume only limited liability for goods when shipping them. Terms of sale often make the seller responsible for the goods up to the point of delivery to the foreign buyer. This means that transportation insurance is an absolute necessity. As mentioned in the previous section, your freight forwarder should also carry errors and omissions insurance.

Most freight forwarders will arrange insurance for your shipment. If you decide to do this yourself, through an insurance company, make sure you understand exactly what coverage you are getting.