Inside Logistics

CBP values Canadian in-transit shipments at $95,000

October 17, 2014

TORONTO, Ont. – The US Customs and Border Protection (CBP) is finally willing to put a value on cross-border in-transit shipments.

According to the Canadian Trucking Alliance (CTA), the CBP accepted a proposal that will permit Canadian carriers travelling through the US while on their way from a Canadian point-of-origin to a Canadian destination, to declare a default value for in-transit shipments of $95,000. That number is based on contract of carriage rules where, for claims purposes, a default value is based on $2/lb. for 45,000-lb. load. This is a figure that carriers will be able to provide to the CBP when the true value or estimated value of the goods they are carrying is not obtainable by the carrier.

By accepting the $95,000 figure, the CBP is clearing the way for a pilot program to be conducted next year, which will see no more than nine carriers to begin moving goods in-transit through designated US ports.

As Canadian carriers well know, currently they are operating at a disadvantage to their American counterparts when carrying in-transit shipments across the Canada-US border. When the US tightened up border controls after the 9/11 attacks, the CBP began to treat Canadian domestic moves that were routed through the US as international loads and began to require full documentation, including what the CTA describes as “the problematic requirement for ‘value data,’ effectively ending in-transit shipments through the US for Canadian carriers.” In contrast, US carriers continued to cross the Canadian border without those same restrictions or requirements.

Under the new proposal, the CBP will still issue a penalty based on the value of the load if in-transit goods are not repatriated to Canada after they enter the US.

“The agreement is the product of a lot of hard work by government and industry officials on both sides of the border,” says David Bradley, president and CEO of CTA.

“It was tough sledding at times, but ultimately the process worked and while there is still work to be done the outcome on in-transits is consistent with the vision both the prime minister of Canada and the president of the United States had for the Beyond the Border initiative.”