Shipping Your Goods
Familiarize yourself with your target market’s import regulations, product standards and licensing requirements.
Service exporters may require accreditation from the country they are operating in.
On our side of the border, reporting exports is mandatory under Canadian regulations, unless you are exporting to the United States or are exporting less than $2000 to a non U.S. market. More information on export controls, export declarations and reporting requirements can be found in section 2.1.
Agri-food exporters will have to go through the Canada Food Inspection Agency instead, and it has its own set of guidelines.
You will also need to familiarize yourself with Canada’s international shipping regulations:
Once you have done the research and the paperwork to ensure you are fully complaint with both Canadian customs and customs in your target market, you will need to arrange to get your goods from point A to point B.
There are four methods available to ship your goods:
Truck: Shipping by road is popular within North America, or in industrialized countries with good quality roads. However, this method is inadvisable in countries without strong infrastructure, poor roads or lax road safety standards.
Rail: Widely used when shipping to the U.S. and to and from the sea.
Air: Shipping by air is expensive, but delivery is faster, insurance is lower, warehousing is cheaper and you enjoy better inventory control.
Boat: Shipping by sea is advisable for large items and bulk commodities. If you are shipping overseas and fast delivery is not a top priority, transporting your goods by boat is more economical.
If there are risks or logistical complications associated with delivering to your customer’s door, you may want to avoid doing this. Make it clear that you will ship the goods to the port of entry and no further, and put this stipulation in your contract.
Pack your products to survive less-than-careful cargo handlers and rough transit, especially if you are shipping overseas.
If your goods require special temperature controls to survive the journey, make sure they are equipped with them.
The method of shipping may determine the way you should pack your goods. Be prepared for environmental hazards and human error.
If your labels don’t meet local requirements, your products may not clear customs.
Product and shipping labels should have the following information:
Markings on containers and packages must match information on shipping documents.
Shipping labels should be large, clear and waterproof.
A packing list is also necessary. This form identifies and organizes the contents of each container, and each container in turn needs its own packing list detailing its contents.
Some countries require you to print labels in all official languages. Check these requirements ahead of time.
These documents are prepared by you or your freight forwarder, and allow the shipment to clear customs.
You will need the following:
*Your commercial invoice describes the goods in detail and lists the amount owing by your buyer. This form is also used for customs records.
It must include:
International Commerce Terms (or Incoterms) are a set of standardized, internationally-recognized trade terms published by the International Chamber of Commerce. They are used in both domestic and international contracts and can allevate a lot of the confusion that comes with using the individual trade terms recognized in specific countries. Incoterms are precise in their legal definition, and mean the same thing everywhere in the world.
The first Incoterms were published in 1936, and they are updated regularly to keep pace with changing trends in trade, industry and technology. The lastest Incoterms were published in 2010, and a new update is slated for 2020.
When it comes to shipping goods, Incoterms provide a framework for businesses to negotiate how they are going to ship goods from A to B and which party is responsible for what.
Here are the shipping terms laid out in the lastest published Incoterms:
EXW – Ex Works
Ex Works means that the seller makes the goods available at their premises, and the buyer is responsible for every aspect of shipping, including clearing the goods through customs.
FCA – Free Carrier
Free Carrier means that the seller delivers the goods to a person nominated by the buyer at the seller’s premises or another named place. As soon as the goods arrive at the agreed upon exchange point, the risk and responsibility passes to the buyer.
CPT – Carriage Paid To
Carriage Paid To means that the seller delivers the goods to a carrier nominated by the seller at an agreed upon place and that the seller must contract for and pay the costs of the carriage necessary to bring the goods to the named destination.
CIP – Carriage and Insurance Paid To
CIP is the same as CPT, except that the seller also contracts for insurance against the buyer’s risk of loss of or damage to the goods during carriage.
Under CIP, the seller is only required to insure minimum cover. If the buyer wants more insurance protection, it needs to agree explicitly to this with the seller or make its own arrangements.
DAT – Delivered At Terminal
This means that the seller delivers the goods to a port or terminal, such as a quay, warehouse, container yard or cargo terminal. The seller bears all risks in bringing the goods to the terminal and unloading them.
DAP – Delivered At Place
This means that the seller delivers the goods to a destination named by the buyer. The seller bears all risks and responsibility.
DDP – Delivered Duty Paid
This means that the seller is responsible for delivering the goods to the buyer’s premises. They are responsible for all aspects of shipping, and must clear the goods through customs and pay all duties associated with customs.
Rules for Marine Transport
FAS – Free Alongside Ship
This means that the seller delivers the goods next to a ship nominated buy the buyer at a named port. The risk of loss or of damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from then on.
FOB – Free on Board
This means that the seller delivers the goods on board a ship nominated by the buyer at a named port. The risks pass to the buyer when the goods are on board the vessel.
CFR – Cost and Freight
CFR is the same as FOB, except that the seller must contract for and pay the costs necessary to bring the goods to the named port of destination.
CIF – Cost, Insurance and Freight
CIF is the same as CFR, except the seller most also provide insurance against the buyer’s risk of loss or damage to the goods during carriage. CIF only requires minimum cover.