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brokerage fees

A Basic Guide to Customs Brokerage Fees Charged by Couriers

I was given an idea to write a post about different shipping methods to Canada by dansmoncorps on Twitter. she has her own blog here with some nice photography. Anyway thanks for the idea.
I must confess that this is not my area of expertise but I thought it was definitely information that people out there want to know and is somewhat related to the Customs Process.

So here is how I see it.

Canada Post – by far the cheapest, with a $5 service charge for regular mail and $8 service charge for EMS. i.e. you order something off ebay and its sent by US postal service then it goes to one of the 3 international mail facilities where Customs will process your mail and if you owe duties and/or tax then you will receive notification from the post office to go collect your parcel. Contrary to what some may think this service charge does not go to Customs or the Government of Canada but to Canada Post. PST, GST, HST and Duty however is collected by Canada Post on behalf of the Federal and Provincial Governments.

Mail under $20 is released duty and tax free under a Postal Importations Remission Order. Over $20 you can be subject to duty and tax.

Over $1600 your mail can be deemed commercial and you may receive a letter in the mail directing you to clear your shipment at a prescribed Customs office offering commercial services. You will have to bring your receipts or invoices and 2 copies of the letter and 2 completed Form B3 to declare your goods commercially. After you present your paperwork to Customs and pay any duties and tax owing you can then fax a release stamped copy of the letter back to Customs at the mail centre and they will allow Canada Post to deliver your package.

The only negative I really see is the length of time it can take to send or recieve your shipment.

For Customs requirements on using Canada Post to send or receive goods in greater detail click here.

Canada Post also has the “Border Free” program that offers “hassle free online cross border shopping”. This actually seems to work quite well from what I have seen. The basic jist of it is that if you shop using participating online retailers like abercombie you get a price that includes all the different costs associated with no suprises and your package delivered to your door. For more info see here

UPS – UPS standard service is definitely faster than regular mail, but be prepared to pay brokerage fees for UPS performing the customs clearance which varies based on the value for duty. If you get UPS Worldwide Express, Saver or Expedited Services the brokering is included for the first 5 line of classification. Basically this mean that you can have to 5 different types of goods in the same shipment cleared free of any brokerage fee.

You can download the UPS Customs Rate guide here. Its actually quite informative and breaks down the charges.
Some have complained about feeling blindsided by UPS standard’s fees for clearing Customs. As many retailers in the US will use their services it is best to be aware of the charges. As I mentioned in a previous post, you always have the option to self clear! Check out my previous post on how to do this.

DHL – Is a another air courier option. If you have not paid Customs fees in advance, DHL charges %2.5 of the value with a starting minimum of $7. Go here to see more details.

Fedex - Now if you’re shipping from the US there is also Fedex Ground which is cheaper but of course takes longer. Fedex Ground will often deliver your package and send you a bill later for brokerage fees. Again if you have not designated them as your broker you have the option to self clear and they have to reverse the charges once you show proof that you have accounted for the goods with Customs.

With regular Federal Express just like UPS the first 5 different commodities are brokered free of charge. After that ancilliary charges apply. Here is the link for more detail on the anciliary fees. Fedex also has a nice page detailing different customs froms you may need. here. Very useful!

Purolator - Their fees for brokering are also invoiced after the fact by Purolator Trade Solutions for a minimum of $5 or %3 of the value for duty whether you owe duties and taxes or not.

Things to be aware of – The $60 gift exemption applies only to gifts being sent by Non-residents to residents and must clearly appear to be a gift. If the package is inspected by Customs and not determined to be in fact a gift (no indication other than the declaration) full duties and taxes will apply. If there is no indication of value, no invoice, or receipt, or bill, then the value may be assessed by the officer. Of course you can always dispute the charges afterwards.

Companies or vendors that regularly import to Canada do not usually declare falsely as this leads to longer delays in the customs process leading to disruntled customers…so don’t ask them to declare it as a Gift.
Undervaluing goods is another pitfall for rookie importers and just as risky as you take the chance of having your shipment seized by customs and retaing a record for the infraction.
I’m sure I’ve missed stuff, but I will keep adding to this post as things come to me…so check back for more info.
 
Any questions? you can post here or tweet it @customsinfo

 

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