Businesses that export from Canada to the U.S. have benefited from a large and lucrative American market space for many years. In 2020, we’ve seen some big changes to our economical climate but the benefits of selling across the border remain. With a consistent rise in e-commerce and a new USMCA agreement, more businesses are looking to export from Canada to increase revenues. But there’s also a lot to consider. So before you take the leap, here’s a checklist to test your exporting readiness.
You have a scalable supply chain in place
One of the toughest things about exporting your business is predicting what’s ahead. For example, the U.S. market is about 10 times the size of Canada’s. That’s a lot of potential customers. So when you’re planning on shipping from Canada to the U.S., 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) has the ability to handle an influx in customers, sales or activity, without impacting your quality or performance.
You understand shipping terms that can assist your bottom line
Even though the majority (about ⅔) of Canadians live 100km from the U.S., it’s still a costly feat to ship over the border. While you can offset those costs by charging a premium for cross-border delivery, it’s worth knowing about 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 take on the 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 the 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 know how to be compliant with the USMCA/CUSMA trade agreement
In July 2020, the CUSMA/USMCA agreement replaced the NAFTA trade agreement. The new 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. That being said, there are significant changes to know about minimum thresholds, certification of origin procedures, and specific rules for sectors such as agricultural and automotive. 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 packaging is sturdy enough to export goods
Cross-border shipping can involve some lengthy journeys. While this may sound obvious, consider that these journeys can include many handoffs, sometimes being transported by multiple means of transport to arrive at its destination. Each transfer means additional handling and inevitable bumps. Even when export goods aren’t fragile, there’s a risk that heavier, bulkier items will be in tow that can damage your packaging. For every delivery, make sure your packaging is secure and durable enough to arrive as intended.
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), it’s important to get the whole team prepared with the right information for the new scenarios. Also, be sure to update your terms and conditions, FAQs and any other online information so your content considers the new audience, too.
Your delivery partner provides streamlined cross-border shipments
A streamlined delivery is critical to your customers’ 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.
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. If you’re not quite ready yet, remember that the benefits of shipping to the U.S. will likely outweigh the time it takes to prepare yourself. There are many resources available to maintain an efficient and successful cross-border business. Learn more about how Purolator can provide you with cross-border expertise and services to reliably.
