The common elements of shipping within Canada or internationally from Canada include:
Note: When shipping Internationally, the majority of packages ship via air (versus ground for domestic shipments). As a result, international packages are often subject to a higher chargeable weight than for the same size domestic shipment.
Supply chain is becoming more of a consumer-facing activity. Jet assists companies in developing core competencies in logistics for better control of the buyers experience.
In addition to the standard information for shipping domestically, international shipments require you to declare your items for import to the destination country (and, for some shipments, Export Canada declaration). This can take different forms, such as a CN22 for postal shipments or an “Invoice for Customs”. When Shipping Internationally, you’ll also need to know:
Note: Jet Worldwide’s logistics team has been providing international transport for over 35 years. Our focus is finding international logistics solutions for companies shipping to and from Canada and North America. It is our mission to connect people, parcels and businesses around the world!
In most cases, a simple description of the item or items you want to ship will do the trick, but you’ll want to get more specific to avoid complications and delays. Additionally, if it is an obscure item that – for example – may be specific to your industry, it can be helpful to describe how the item is not new. Even better, there is a global system to describe your item. The Harmonize System Code. This is a language our friends at customs understand!
The Harmonize System Code is an international reference of the World Customs Organization. It has six-digit codes. All leading economies use it to commonly classify goods.
HS Codes determine duty, admissibility, and if an examination is necessary .
Find the HS Code you’re looking for, so that you can best describe your item. We recommend checking in with your international customer before shipping – as they will be the actual importer of the goods – to confirm the most appropriate HS Code.
When shipping Internationally, one of the first questions you might ask yourself is "What value should I declare?" The declaration of value, along with the HS Code, are the biggest factors in assessing duty and the import process. Over-declareations result in needless costs. Under-declarations could lead to significant delays and fines.
Note: Customs generally requires a unit value for each item being sent.
Transaction Value and Landing Costs
The value of your item(s) is usually the Transaction Value.. Meaning, the actual cost of the item(s). If you sell a product for $200, the Transaction Value is $200. Remember to include the currency code when declaring a value.
With regards to assessing duty and taxes on an item, customs will use the CIF Value. Meaning Cost plus Insurance plus freight charges. It is the sum of the transaction value, plus the cost of Insurance, plus the cost of shipping.
Let’s take our example of the item sold for $1000 Canadian dollars: we know the Transaction Value is $1000. Now, let’s say the cost of Insurance is $30 and the shipping cost is $120. Add those up. And you get a CIF Value of $1150.
Transaction Value: $1000
+ Cost of Insurance: $30
+ Cost of Shipping: $120
= CIF Value (Land Cost): CAD$1150
If the Transaction Value includes the cost of insurance and shipping, you should include that the Transaction Value is the CIF Value.
When you’re shipping by courier or post, the Cost of Shipping is often unknown. In that case, most customs will apply a standard cost per kg rate. Know that this cost could be more or less than the actual Cost of Shipping.
Similarly to the HS Code, before you start your International Shipping, we recommend you consult with the receiver confirming your valuation. Learn more about methods of valuation.
When it comes to samples or gifts, you might think these items have a $0 Transaction Value, because they are “free” or “priceless”, but customs will demand that each item has an actual value. To come up with an appropriate dollar amount, you can start by looking at the transaction value of identical or similar items. If that isn’t possible, or if you’re looking to ship specific high value commodities, there are a few other methods you can consider, but for those, we recommend you get in touch with a specialist.
Canadian businesses who are selling products internationally via online platforms such as Shopify, eBay, need to understand duty and VAT (value add tax) costs as well as their shipping costs. Low value orders may qualify for duty free entry. Value Add Tax (VAT/ GST) often must be prepaid via the online marketplace. The United Kingdom requires prepayment of VAT for online orders importing to the UK. Similarly, online orders to the European Union from Canada require prepayment of value add tax to EU countries.
Say you sell an item originally from a supplier and you want to ship to your customer in Germany. Most of the time, you’d be right to assume that the Country of Origin of the item is Canada. That is, if you don’t know where the product - or its parts - were made. But what if you knew where the product was made? And why does this matter? Depending on the Country of Origin, goods can actually benefit from one of Canada’s duty Free Trade Agreements.
For international customs clearance purposes, the country of origin refers to the country of manufacture. For example, Jet Worldwide helps a company that makes specialty guitars. These Canada-made guitars are shipping for Duty Free clearance to Europe, Australia and the US thanks to Canada’s Free Trade Agreements.
All cargo exporting from Canada are subject to customs clearance in the destination country. Assessment is made regarding admissibility, duty rate and taxes due. Most carriers use EXW as the default shipping term. The receiver is responsible for all applicable import fees. The is the same as Delivery Duty Unpaid or DDU*. See trade terms and default EXW* below.
The shipper can choose to pay import fees on behalf of the receiver. A Delivery Duty Paid option is available via most carriers. However, Canada Post does not offer delivery duty paid. Note that import fees paid by the shipper are not recoverable. In some cases, then importing business may be able to claim back taxes paid at import.
What is the calculation of duty?
Duty is generally a percentage typically applies to the CIF Value or Land Cost of your item. The percentage is on the classification of goods (see above).
After assigning duty, there is often a Value Add Tax to pay. This tax can be as high as 20% (in most European countries, for example). Often, tax regiments often allow business (if goods are not for final consumption) to claim back back the the value add tax.
In addition to the Duty Fee and Value Add Tax, there are often Import Fees payable by the receiver. If a customs broker is necessary, there is also a Brokerage Fee.
When sending via a common courier, customs entry is usually inclusive. They often charge a fee of around 2.5% to 3% (with a minimum charge) of the amount they pay on behalf of the receiver This is a Carrier Disbursement or Administrative Fee.
Export Clearance or declaration, is sometimes necessary when exporting from Canada.
When shipping goods from Canada over CAD$2000 (or otherwise with restrictions), Canadian Customs and Statistics Canada requires shippers (exporters) to declare the export via CERS. If you’re an individual looking to ship over CAD$2000 worth of goods, you’ll have to register with customs as an exporter.
When shipping from Canada to the USA, a Canadian Export Declaration is not a requirement.
When you are exporting, the default method of shipping is Ex Works (or EXW*). The receiver/ importer is responsible for all import fees, duty and taxes. Keep this in mind when sending a sample or warranty part to your customer. See our blog on shipping terms.
The disadvantage of paying import fees on behalf of the receiver is that the bulk of the import fees are often from a value add tax that the importing business may otherwise be able to claim back.
*DDU, DDP and EXW are terms known as Incoterms®, a trademark of the International Chamber of Commerce/ICC. It is useful to at least understand the existence of Incoterms and visit ICC’s website if further explanation is necessary.
Canada has trade agreements with most of the world's major economies. The good news is that Canada’s newest Free Trade Agreements make declaring a Country of Origin much easier. The certification of origin can be part of the shipping paperwork. See our blog on Canada's Free Trade Agreements.
The ability to ship Canada Origin goods to over 30 major economies duty free is a major competitive advantage for Canadian Companies. If you’re a Small Business Shipping Internationally, getting familiar with the available Free Trade Agreements can make it easier to reach foreign markets and can save your international customer import duty (and ultimately lower the cost of your product).
Shipping via Ocean is best for large commercial shipments. Ocean shipments can take anywhere from one to three months transit.Read more about ocean shipping from Canada.
Less than container load or LCL works well when shipping a couple of pallets. The transit time for LCL is longer for additional time is necessary for loading and de-consolidation.
Full container load is the fastest sea freight option. This includes both 20 foot and 40 foot containers.
With the common surcharges for ocean shipments, the price of shipping via air cargo is often the cheaper option. This is especially true for door to door consignments. Generally, shipments of less than 100 kilograms are cheaper via air. Cargo over 500 kilograms are much less expensive via ocean.
Trucking to the USA and Mexico is a great option for larger commercial shipments. To the USA, the transit times average around 1 week. The actual transit depends on the destination and classification of goods. Read more about LTL Shipping.
Shipping International via
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Canada has trade agreements with most of the world's major economies. The good news is that Canada’s newest Free Trade Agreements make declaring a Country of Origin much easier by allowing the Certification of Origin to be included on the shipping paperwork. The ability to ship Canada Origin goods to over 30 major economies duty-free is a major competitive advantage for Canadian Companies. If you’re a Small Business Shipping Internationally, getting familiar with the available Free Trade Agreements can make it easier to reach foreign markets and can save your international customer import duty (and ultimately lower the cost of your product). Learn more about Shipping from Canada to other parts of the world, as well as Importing into Canada.
Jet Worldwide's logistics team is committed to helping Canadians expand to global markets by shipping to and from Canada. Our online resources reflect our best-in-class logistics to facilitate the international movement of goods. In our posts, we provide an extensive review of things to consider when shipping.
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