Updated: December 7, 2022
Businesses that export from Canada to the U.S. have benefited from selling in the American market for many years. Today, the benefits of cross-border shipping remain. With the consistent rise in U.S. e-commerce growth, based on retail sales data from the Census Bureau in 2022, sales are estimated to increase by 2.7% by the end 2022. Furthermore, trade agreements across North America have more businesses looking to export from Canada. Businesses are seeking to increase revenue and take advantage of a market with over 332 million buyers. With the right resources and information, you can be best prepared to expand your business into the U.S. Before you take the leap, here’s a checklist to test your exporting readiness.
You understand the benefits of shipping to the U.S.
Canada is the second-largest goods trading partner to the U.S. It also offers a much larger data market that exporters to the U.S. can tap into. This can enable exporters to more efficiently understand customer preferences and better target their customers. This can lead to higher sales and enhance brand loyalty.
You have a scalable supply chain in place
When you’re planning your U.S. logistics strategy, you need to have a scalable supply chain that’s prepared for growth. What does it actually mean to be scalable? Basically, it means your business (including website, inventory and team) is resilient enough to handle an influx in customers, sales or activity and without impacting your quality or performance. This includes different currencies, compliance with tax requirements and other factors.
You know how to expand into the U.S. market
Without a comprehensive export strategy, getting your products across the border and into the U.S. can be a challenge. To successfully expand your business southbound, you’ll need to:
- Understand the complexities of duty and tariff systems to avoid penalties and delays.
- Follow Section 321 regulations for easier customs clearance (when applicable).
- Secure U.S. fulfillment partners who will help maintain your brand’s integrity.
- Determine which segments and regions can result in the most success for your exports so you get the most return on your investment.
Need more details?
Our guide to shipping from Canada to the U.S. covers all these points in further detail while also providing a more in-depth look at cross-border shipping readiness.
You’re planning to scale your e-commerce initiatives
When it comes to scaling the e-commerce side of your business for the U.S. market, you’ll want to focus on five key areas that will bring you the most value:
- Invest in automation tools or services that increase efficiency. You’ll be able to export more goods to more customers at a faster rate of fulfillment. And the faster you can deliver the packages, the quicker you can bill to get revenue.
- Enhance customer support by adding a human touch to your services. Your business will stand out from the competition and increase retention by providing a conversational customer service experience.
- Update your current online store or create a version that suits your U.S. customers with search engine optimization, payment methods and pricing tailored to their needs.
- Communicate delivery time expectations to your customers. Consider adding multiple shipping speed options so that customers can choose additional flexibility.
- Have a frequently asked questions (FAQ) page, or set expectations for delivery times in your marketing communications to help customers understand how long their delivery should take, mitigating questions and complaints.
You understand shipping terms that can assist your bottom line
While you can offset U.S. shipping costs by charging a premium for cross-border delivery, you need to understand two important Incoterms, which can determine who pays for the international shipping clearance fees.
Incoterms set the standards for international commerce, so globally businesses can seamlessly abide by the same definitions and processes. Many shippers choose to cover extra costs such as duties, taxes and brokerage fees. This is referred to as the incoterm DDP (Delivered Duty Paid). Alternatively, you can pass on clearance costs to the receiver, meaning they’re responsible for any duties, taxes and brokerage fees, which is referred to as DDU (Delivered Duty Unpaid). To ensure you’re always aware of accurate shipping costs and additional charges, make sure your delivery partner can provide you access to customs brokerage expertise.
You stay on top of customs requirements for an easier border crossing
Every cross-border shipment needs to comply with customs regulations. Otherwise, your shipment might be met with fines or delays. To ensure your shipment makes it across the border, and that you save time and costs with every export, you need to have:
- A Bill of Lading – refers to any shipping document, label, waybill, manifest or similar instrument used by the carrier to accept shipments for carriage.
- A Commercial Invoice – a description of the shipped product, including their fair market value. Some carriers allow you to transmit this information digitally.
- An Import/Export License – a special license might be required if your product or shipment is regulated.
- Harmonized System Codes – every type of traded product has a corresponding 10-digit Harmonized System (HS) code with applicable duties and tariffs. You can use the Purolator Trade Assistant to find accurate HS code information and calculate the duties payable.
You know how to be compliant with the USMCA/CUSMA trade agreement
In July 2020, the USMCA/CUSMA agreement replaced the NAFTA trade agreement. The agreement makes it easier to ship over the border–with simplified paperwork, regulations written in simple language and easier access to U.S. and Mexico supply chains. The USMCA supports mutually beneficial trade between all three countries, promoting fairer trade opportunities and freer markets. That being said, make sure you understand what the trade agreement means for your business to be compliant–if you’re not, you could be faced with a significant fine. Need more information? We’ve answered your top questions about USMCA to help guide you.
Your customer service is prepped for shipping from Canada to the U.S.
Every change to your business brings new questions from your customers. Your international customers may have questions you haven’t encountered before about shipping to the U.S. To ensure a smooth transition (and a great first-time experience), be sure to:
- Get the whole team prepared with the right information for new U.S.-specific scenarios.
- Update your terms and conditions and FAQs.
- Ensure your online content is tailored to address the common queries and pain points of your new audience.
- Offer premium shipping options such as expedited shipping.
Your delivery partner provides streamlined cross-border shipments
A streamlined delivery is critical to your customer’s experience, especially when trying to gain the loyalty of a new market. Try to offer your international customers a service that’s as convenient and efficient as your domestic base. For example, consider providing a variety of shipping options, if you have that option for customers within Canada. When shipping across the border, look for a shipping provider who offers the whole package: flexible shipping and cross-border expertise. As you begin your business expansion into the U.S. market, having a knowledgeable and experienced shipping partner can help ensure your journey is seamless.
These seven readiness characteristics can help guide your own cross-border shipping readiness. If you think you’re ready to export from Canada, great! Remember, preparation only allows you to understand cross-border shipping–it will likely take some practice and tweaking to your business processes along the way. There are many resources available to maintain an efficient and successful cross-border business. Understanding your readiness may require more time and research before you reach a final decision. To help you reach that decision, you’ll want to assess the U.S. market potential for your business before you start exporting.