The United States of America, Canada and Mexico have always been trading with one another and this has included everything from agricultural products to cars. Cross border trade between these three is as old as the countries themselves. They have exchanged people, services and goods since very long.
The trade and shipment regulations have been changing all over the time. Moreover, it has been a tricky route due to the diversity in demand and supply of the shipping services, unpredictable weather and other socio-economic and political factors.
A number of companies have been operating in this field to fulfill the needs of cross border transportation and more and more people are investing in this trade as it is a profitable business.
North American Free Trade Agreement is an agreement which was signed between the United States of America, Canada and Mexico on January the 1st 1994. The volume of trade has increased from 150 billion to above 600 billion US Dollars since the signing of this agreement.
Here you can see how NAFTA looks geographically and most popular corridors.
This agreement has mainly affected the sectors of agriculture, textile and automotive industries. It is the agreement which has opened a new era of trade and exchange of services between the three countries, eliminating the old Canada-United States Free Trade Agreement between America and Canada.
NAFTA has increased the overall volume of trade between the three countries which in turn requires larger trucking services. Before NAFTA, there were high trade barriers between the countries. NAFTA has helped remove many of them. A great benefit of NAFTA to the shipping companies has been that now the goods do not have to wait that much on the borders for custom clearance.
The NAFTA certificate of origin helps a lot to get the custom clearance in time and let the gods be passed the border. Crossing the border for shipping the border has also become easier due to it. Before NAFTA the companies interested in cross border shipping of their products preferred shipment via air. It was costly. After the implementation of NAFTA, the trucking industry has got a boost as now most of the products are shipped by trucks.
Nowadays, cross border shipping is not a big deal. A number of trucking companies operate which can ship goods of any dimensions and characteristics to and from Canada and Mexico.
But with the ever increasing volume of trade between the US and Canada and US and Mexico more and more companies are starting the business of shipping between these destinations. However, not all the companies are the same. The costs taken and services offered by these companies differ a great deal and the time taken in the delivery of shipment is also not the same.
Customs clearance is a main step in cross border shipping. Though US, Canada and Mexico have a great volume of interstate trade, yet the cross border trucking and shipping has to obey the rules of custom and clearance. When the shipment is coming from Mexico the security check is even more strict to avoid the induction of drugs and arms in to the States.
Due to the rising competition between trucking companies operating to and from Mexico and Canada and the United States, the rates of freight have become quite reasonable. The trucking companies offer better rates If you have a large order and a constant agreement with them to transport your goods.
As of this age many things have been made easy for trucks operating cross border. Weather forecasts help the drivers manage their journey according to the prevailing weather conditions in the area they are going. On the other hand, Telecommunication services have made the rescue and help operations quicker and successful in case a truck is struck by a disaster.
Laws have also been made as to maximize the comfort of those who are innocent and minimize the chances of escape of criminals and smugglers. Zero tolerance is adopted against drugs and illegal arms to make the shipping and trade as clean as possible.
America is the largest market for Canada’s export trade. The shipments are mainly through the road routes unless it is an urgent shipment, which is sent by air. According to the laws of the United States of America, it is the responsibility of the trucking company to ship the booked item intact to the receiver for whom the item was shipped.
But as long as the item is in the custody of the trucking company it belongs to them and they are responsible for its being legal. The Customs and Border Protection (CBP) reserves the right to inspect the goods being transported into and out of the US for custom and security clearance purposes.
First and foremost, to operate as a cross border trucking company you must have an International Carrier bond on file with CBP. An annual fee is applicable to the truckers operating cross border to Canada. This accounts for the services offered by CBP in terms of custom clearance and permission to operate to and within the States.
While shipping something from US to Canada, it is subject to Canadian rules of taxation, security and custom clearance. A number of agencies within the Canadian government are authorized to collect the taxes and approve the goods to enter Canada.
Much like USA in Canada also the trucker is held responsible if found in the custody of any illegal item before it is handed over to the person or company it was booked for.
For driving a truck in Canada the driver must have the driver’s license. This license is issued to the foreign nationals and has a validity of one year only. After one year it needs to be renewed.
Most of the regulations for Mexico are the same as those for the trucks coming from Canada. When the trucks enter the USA from Canada they have to undergo the same series of inspections and custom and security clearances.
There are still more loopholes in the shipping of goods from Mexico to USA. To avoid this thing, the US government strives to eliminate the malpractices and import of illegal goods. The Mexican market mainly supplies agricultural and raw products to the US industries.
As a result the goods coming to US are subjected to serious inspection. It is safer to carry only legal goods from trusted shippers in order to avoid complexities in the US, because if caught in custody the trucker is held accountable for the illegal stuff. In Mexico the rule is opposite of the rest of the world. You are guilty unless you are proven innocent. Being careful is better than being sorry.
Customs brokers in Mexico play a key role in cross border trade as well as shipping. Try to have a reliable broker and sign a long term agreement with them to benefit the most.
In Mexico the practices are much different from those in the rest of the US so when you are in Mexico it is a good practice to adapt to and follow the Mexican practices that can help you in adjusting there and making your trade flourish. LTL shipments are a headache in Mexico they are time consuming and costlier than the others.
Avoid shipping the LTL shipments as long as possible.
It is better to have an insurance when in Mexico. The Mexican rules make you bound to pay 15 times the charges per ton to the customer in case the shipment is lost or damaged. Having an insurance can save you some money if the shipment is lost or damaged.
Moreover, if you have an insurance you can offer an insurance fee to the customers which can make your shipment terms and conditions more attractive for the customer.
Trade between USA and Canada and USA and Mexico is as old as the countries themselves. The neighbors have been providing each other with goods, products and services for very long.
Before the NAFTA agreement was signed there were a number of obstructions specially on the cross border trade between Mexico and America. Since the NAFTA is signed the trade volume has increased about 4 times.
The trucking needs have also increased that much. The modern time facilities and advanced trucks have made the trucking job easier and safer. Competition in the field is increasing day by day as more and more companies are stepping in to the business to provide better and less costly services.
Shipping to Canada mainly includes furnished products and electronics. Canada’s main export goods purchaser is America and Mexico supplies a number of raw materials and unfurnished products to America so all the three have a trade route which means that the trucking business can never go in loss. We are expecting a very bright future for the companies operating cross border.