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How Does Customs Brokerage Work?

Customs Brokerage

Customs brokerage and trucking go hand-in-hand. Most carriers will not pick up a commercial shipment destined to cross an international border unless they can confirm that the shipper is represented by a customs broker. When shipping from the U.S. to Canada a Canadian Broker is required.  When shipping from Canada to the U.S. a U.S. broker is required.  

Essentially, a customs broker assists the shipper to identify the harmonization code “HS code” that applies to the shippers product for customs reporting purposes.  Once identified the broker can also collect and remit taxes that may apply to that shipper based on that shipment.  I recall once having a shipment of brooms turned away at the border because the customs broker failed to realize that the U.S. had exceeded its quota that month for importing that particular type of broom!

Customs Process PARS/PAPS

When moving freight to the U.S.A from Canada the Pre-arrival Processing System (PAPS) system is used.  Likewise when moving freight from the U.S.A  to Canada the Pre-arrival Review System (PARS) system is used.  These two system attempt to make the process of clearing customs as efficient as possible for carriers and shippers.

  The typical process for an international truck shipment between the U.S. and Canada is as follows.  

  1. Carrier picks up the Product along withe the BOL and Customs invoice (CI)
  2. Carrier affixes the applicable PAPS or PARS barcode sticker to the customs
  3. The carrier faxes the CI (with the attached barcode) to the customs broker
  4. Customs broker transmits the data to the applicable customs department
  5. When carrier arrives at the border the customs official scans the barcode on the carrier’s copy of the CI and confirms it matches the data transmitted by the customs broker.
  6. If everything matches and there is no issues the carrier proceeds through the border

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