In my previous article, we learned all about Canada as the number one trading partner with the USA. We also learned about the $248.2 billion of exported goods to Canada in 2010. Most importantly, we learned about NAFTA and its benefits to US exporters. Now it is time to learn about one of the hidden secrets to reduce costs of exporting to Canada: the Consolidation Method.

Many exporters have products of all shapes, sizes, and weight variations. The most common practice is to ship products based on those variations as separate shipments. For example: 

• A manufacturer that produces valves, flanges, fittings, and other related products is shipping four pallets of heavy valves, 20 cartons of fittings, and 12 boxes of flanges. These products are shipped to four different customers in Canada. 

Common Practice, Common Results:

The common practice in the export world will have the exporter (the manufacturer) prepare exporting documentation for each shipment and ship them separately via a carrier or freight forwarder. The common results to that practice are:

• The Canadian importers will pay border crossing fees on each shipment.
• The Canadian importers will pay Duties and Taxes on each shipment.
• The exporter will pay brokerage and customs clearance fees on each shipment ($65 to $120 per shipment) = Average total charge for this example is: $320.00

The Consolidation Advantage:

By utilizing the consolidation method, the exporter (the manufacturer) will have the option to act as the importer of record and consolidate the four shipments into one shipment. The results of this practice are:

• The exporter will be reducing the border crossing fees to one.
• The exporter will be reducing the cost of duties and taxes to one.
• The exporter will be reducing brokerage fees to one.

Competitive Benefits to Consolidating:

The consolidation method will provide competitive advantage to U.S. exporters:

• The exporter will be able to reduce cost of doing business with Canada. 
• Reducing the shipping cost of the goods + reducing the cost of purchasing = Increased purchase orders.
• Lowering the cost of doing business + Increased purchase orders = A tough competitor in the market place. End box here

How Do You Consolidate?

Consolidating to Canada is the work of experts. Some companies claim their abilities to consolidate, however, many of them fail to deliver on their promised services. It takes years of practice, brokerage knowledge, and customs regulations expertise to successfully manage a Canadian consolidation that would cross the border in a timely fashion.

Consolidating is a great form of cost savings that opens the door for greater selling opportunities. Choose the experts to achieve that conclusion.