This Canada Day we’re celebrating in the best way we know how to: talking about freight shipping! In this post, we’ll cover some of the differences between the U.S. and Canada freight shipping industries and what you should know before shipping cross-border to our northern neighbors.
In April 2016, U.S. to Canada freight totaled $45.9 billion. That’s a big chunk of the $700 billion U.S. freight industry. While the two industries are very similar, there’s also a lot of differences. Knowing these differences can help you get your freight cross-border with ease.
To get an idea of what those differences are, we talked to our Director of Brokerage and Enterprise Sales, Terrence O’Toole. Terrence is a native Canadian who worked for several years in one of the largest multi-national logistics firms in Canada.
Regulations: Canada is more liberal in their regulations in just about every way. So, as long as you comply with US regulations you should be in the clear.
Rate contracts: Canada does not use the NMFC standard to base their contract negotiations, which is the common practice in the U.S. Instead, they determine rates per hundredweight (CWT).
Geographically: Canada is larger than the U.S., but has a population smaller than the state of California. This means that intra-Canadian supply chains have a lot more ground to cover as most provinces are massive and major cities are spread out. You will not find province-to-province rate matrices like you will find state-to-state in the U.S.
Economically: Canada is a commodities-driven economy whereas the U.S. is a consumer-driven economy. This creates different supply and demand cycles between the two countries.
Currency exchange: U.S.-Canada cross-border capacity is greatly influenced by currency exchange rates. If the U.S. dollar climbs higher than the Canadian dollar and it becomes cheaper for Americans to buy Canadian products, then there becomes a higher demand for freight moving from Canada to the U.S. and vice-versa.
While there are a lot of differences between freight transportation in Canada compared to the U.S., cross-border freight transportation between the two countries is fairly similar to U.S. domestic truckload and LTL with the addition of borders customs. Freight brokers and 3PLs oftentimes work with customs brokers to help shippers prepare required paperwork and process duty fees for customs clearance. For example, FreightCenter’s partnership with Wilson International, as well as other carriers who offer cross-border shipping services like Ward Transport, allows us to provide our customers with seamless cross-border shipping. Check out our Canada freight shipping page for more information or to get a quote.
Did we miss any differences? Let us know in a comment!