Sept. 11 2009 09:50 AM

The U.S. Postal Service is making it easy for shippers to go global but look local. Canadian Direct Entry Parcels (CDEP) offer e-commerce merchants a streamlined way to ship north to customers in Canada.

CDEP shipments originate in the United States and are prepared with Canada Post’s Xpresspost labels so they can be injected directly into the Xpresspost delivery network. That’s where the local look comes in for CDEP parcels.

Canadian Direct Entry Parcels also include landed costs, allowing merchants to pre-pay duties and taxes on behalf of their clients. Internet users have the benefit of knowing the total cost of their purchase (duties, taxes, price and shipping fees) as they place items in their online shopping carts. Additionally, Canadians avoid Collect-on-Delivery fees associated with their international online purchases.

With Canadians increasing their online spending by double digits in the last two years, Canadian Direct Entry Parcels is a timely solution. According to eMarketer, Canadian online spending for retail goods in 2009 is forecasted to total US$16 billion — a 20% increase over Canadian online spending in 2007 ($13.3 billion).

Not only are Canadians purchasing more items online, they’re also purchasing more from non-Canadian websites. In 2007, 44% of B2C (business-to-consumer) e-commerce spending in Canada went to foreign retail websites, according to a Canadian government Internet use study. Many of these transactions occurred on US websites, thanks to currency fluctuations and increased outreach efforts.

Marketing items online to Canadians seems like a no-brainer for many US companies. A common language, credit card usage and proximity all entice companies to choose Canada as their first export market. Despite all the commonalities, exporting to Canada can seem like a challenge to a business that has never shipped across the border, with duty and foreign taxes to consider.

Items valued over CAN$20 are eligible for duty and tax assessment by the Canadian government. Fortunately, our free trade agreement with Canada alleviates the need to pay duties on some purchases. However, duties are still assessed on items manufactured outside of the United States and Mexico. Canadian taxes can also be burdensome, especially in areas where they charge both a federal Goods and Services Tax (GST) and a Provincial Sales Tax (PST). These taxes can be as much as 13% of the price of the item purchased.

Some companies leave the payment of duties and taxes to the package recipient, and couriers collect these fees upon delivery. These couriers also often charge a collection fee in addition to the duties and taxes. It all adds up: Sometimes the total of the fees exceeds the actual purchase price of the items shipped, causing “sticker-shock” amongst online consumers. The unexpected high fees sometimes cause customers to refuse or abandon their online purchases, saddling e-commerce merchants with additional costs.

The ability to pre-pay duties and taxes is a key motivator for e-tailers eager to reach the growing Canadian online market. The Postal Service will guide Canadian Direct Entry Parcels users through the harmonization process and help merchants pre-pay duties and taxes in advance of their shipment.
USPS has international experts available to help shippers with Canadian Direct Entry Parcels and other customized global mailing and shipping solutions, whether the business is a first-time exporter or a long-time international shipper. Companies interested in this direct entry solution can send an email to or speak to a USPS Global Account Manager.