Are Your Cross-Border Auto Aftermarket Shipments Customs Ready?
The North American auto aftermarket industry is thriving, thanks in large part to the United States-Mexico-Canada Agreement (USMCA), along with changing attitudes about Asian-based supply chains. Businesses are realizing the benefits, both in terms of cost savings and overall efficiency, in relying on manufacturers and suppliers located closer to home.
This nearshoring trend has fueled an increase in aftermarket parts moving between Mexico, the United States, and Canada. But every shipment crossing the border is an international transaction, and must satisfy all customs requirements, pay applicable fees, duties and taxes, and meet any product-specific requirements.
Customs compliance can be time-consuming and complicated, but even more so for auto aftermarket businesses. For one thing, the USMCA offers duty-free status to qualified products moving between the partner countries, but sets strict rules for eligibility. It’s up to each business to determine if its products qualify for USMCA benefits, and to ask for them since benefits are not applied automatically. The agreement also offers a less onerous customs process for low-value shipments but again, a business will need to know if its shipments are eligible.
Apart from the USMCA, cross-border shipments originating in Mexico face severe restrictions on Mexican truck access to U.S. highways. For the most part, trucks are restricted to a 25-mile radius of the border, meaning U.S. and Canadian shippers need to make necessary accommodations. Canada-bound shipments, which must cross two international borders, must take steps to avoid having to pay U.S. duties.
These are just a few of the customs and regulatory-related issues that affect cross-border auto aftermarket products. Knowing about these issues, and having a plan for minimizing their impact can help avoid unexpected costs and delays.
Our new eBook, “Customs and Regulatory Considerations for Cross-Border Auto Aftermarket Shippers,” is a good place to start. The eBook provides an overview of key customs and regulatory issues, and offers guidance for putting a plan in place to ensure seamless compliance.