Canada Shipping Options Can Deliver Big Savings
|By Doug Caldwell|
If you are a US shipper, you probably have at least some shipments to Canada, and you already know that those Canadian shipments can be a lot more expensive than your US domestic shipments. Here are some options that can help to reduce the costs to ship to Canada.
Option 1: International Ground to Canada
Both UPS and FedEx offer International Ground to Canada, from any location in the US. Canadian zones are based on overall distance from origin to destination and are much more complicated than the USPS zone system utilized by FedEx and UPS. Routine customs clearance is included in the ground shipping charge, but only if the value for duty is $200 or less. If duty or taxes are due, the carrier pays them at the time of clearance, and then will collect them from the receiver at the time of delivery. DHL Express offers international express service between the US and Canada.
Option 2: Palletize and Line Haul
If you have at least a pallet or more of shipments each week, there will be a number of cost benefits to using a consolidation. Most shippers will consolidate at least once a week, on a predetermined schedule. This is the process: You apply the Canadian domestic carrier’s label to each box prior to palletizing. UPS, Canada Post, FedEx, Purolator International and Canpar all offer this service. The carrier will arrange for pick up at your US location, clear the shipment into Canada, and drop the shipment into their closest Canadian hub. Your shipment will bear a Canadian return address, which is often the address of the carrier. Typically, you will be invoiced in USD, for the linehaul, clearance and taxes, and for the shipment charges. This service will add at least a couple of days to your overall transit times, depending on how often you consolidate each week but the shipment time should approximate ground service with at least a 10% reduction in shipment cost and one customs clearance fee of approximate $65 per consolidation.
Option 3: Drop Ship into a Canadian Carrier and Pay the Intra Canada Domestic Rate
This option is the most complex, but it also can offer the greatest savings potential. In this scenario, you will consolidate in the US, then arrange for an LTL shipment into the carriers Canadian hub. Some large volume US shippers will “zone skip” into Canada, by line hauling into two or more Canadian hubs. With Option 3, you will be tendering the shipments as a domestic intra Canada shipment, it will be shorter zones and you will typically be invoiced in Canadian Dollars. There’s good news here, as the US Dollar goes a little further in Canada than it used to. As of this writing a US Dollar is worth $1.10 CAD.
Intra-Canada Carrier Options
Canada Post is the second largest parcel carrier in Canada in terms of volume, and the only carrier in Canada that delivers to all 15.1 million Canadian addresses. Canada Post is also the only carrier that can deliver to the 1.8 million Canadian PO Box addresses. For those reasons, the other Canadian carriers will typically hand off remote shipments and PO Boxes to Canada Post. Canada Post offers a full suite of domestic parcel offerings, including Priority (next day), XpressPost (2 days), Expedited Parcel (1-7 days) and Regular Parcel (2-9 days). Unlike the US Postal Service, Canada Post imposes a fuel surcharge on parcel shipments. Canada Post also offers volume discounts for Expedited and Xpresspost parcels, as well as discounts on fuel surcharges for high volume shippers. Canada Post will invoice larger volume shippers, typically with 14 day payment terms. Canada Post currently delivers Monday through Friday.
Canpar is a Toronto based parcel carrier established in 1976, and a part of the fast growing TransForce Canada Group, which includes parcel, LTL and FTL, and even operates in the US (they recently acquired US LTL carrier Vitran Express and Dallas based Dynamex). Canpar’s specialty is intra-Canada ground, however they also offer a full suite of domestic express and transborder services between Canada and the US. Canpar offers the following domestic services: Select 10 AM, Select Noon, and CanPar Ground. Canpar has over 62 hubs in Canada.
FedEx initiated a Canada domestic Express service in 1989, followed by a domestic ground offering in 2000. In 2009, FedEx expanded their SmartPost B2C offering to Canada, with “last mile” delivery by Canada Post. FedEx offers the following domestic services: FedEx Express First Overnight (10 AM delivery), FedEx Express Priority Overnight (next morning delivery), FedEx 2 Day Express (two days by 5 PM) FedEx Economy Express (1-3 days by 5 PM), FedEx Ground and FedEx Ground Multiweight (1-7 business days). FedEx Canada Multiweight requires only 40 lbs in Canada, vs. 200 lbs in the US. FedEx operates over 60 stations in Canada.
Purolator, established in 1960, is the largest parcel carrier in Canada, and is 91% owned by Canada Post Corporation. Purolator offers a full suite of domestic and ground services, as well as transborder services between the US and Canada. Purolator is the only Canadian carrier which offers a letter/envelope rate for ground shipments. Purolator offers the following domestic services: Express 9 AM; Express 10:30 AM; Express (end of day delivery); Express Evening (delivery between 5:30 & 9 PM); Ground 9 AM; Ground 10:30 AM; Ground (end of day); Ground Evening ((delivery between 5:30 & 9 PM). Trivia: Purolator Courier was owned by the US based Purolator oil filter company until 1987, hence the name.
UPS started Canada domestic operations in 1975. UPS is headquartered in Ontario, and recently expanded operations into the four Atlantic provinces. UPS offers the following domestic services in Canada: Express Early AM (8 AM Metro/8:30 AM to others); Express (next day 10:30 AM); Express Saver (next day 12 noon); Expedited (2 business days); Standard (ground delivery by end of day).
Summary: There are many options to choose from for shipments to Canada. Bottom line-a comprehensive review of your north of the border shipments can yield big savings dividends.