Customs Brokers Help Importers and Carriers

Published in Western Canada Highway News, Summer 2009:
Photos of his son and daughter decorate the window sill of Chad Pasosky’s second-floor office in south Winnipeg. Seated at a large U-shaped desk, he manages a team of nearly 40 who are doing their part in getting U.S. products to stores and factories in Canada.
Not one member of Pasosky’s team operates a tractor-trailer, but he plays an important role in the transport industry. He helps trucking companies and their clients get goods across the border.
Pasosky is a customs broker. He and other employees of Jensen Customs Brokers Canada, of which he is regional manager, do the administrative work necessary to get import shipments cleared at the border. They act as intermediaries between importers and the Canada Border Services Agency (CBSA).
He says customs brokers’ work has, if anything, become more important in recent years as border operations have been transformed by changes in technology, trade rules, security concerns and other factors.
“If an importer invests in compliance, by joining various programs offered by the CBSA it will benefit from lower examination rates, not to mention lowered costs and increased savings. The CBSA wants to focus their efforts on high-risk or unknown shipments. With CBSA’s increased scrutiny of compliance, more emphasis is placed on an importer’s books and records to verify compliance away from the border.”
Evolving regulations mean customs brokers, who stay on top of these changes, are vital partners to importers and the transport companies those importers use. And Pasosky, a 21-year veteran in the customs broker industry, expects more changes to come. “You’ve always got to be on top of your game to meet future requirements,” he says, “because they’re endless.”

Partners in importing
A customs broker’s work is mainly about “managing information and managing relationships,” Carol West, president of the Canadian Society of Customs Brokers (CSCB), says from Ottawa.
The information management part is easy to see: Customs brokers take data from their clients and format it for use by government officials, then send it to those officials to get imports cleared at the border.
“They save government a ton of money, because they’ve taken on a lot of the data entry function from the government in terms of preparing the information that allows goods to be released and accounted for in this country,” says West.
Relationship management includes, of course, brokers’ relationships with importers. But that’s not all.
“They also have relationships with warehouse operators,” says West. “They have relationships with thousands of carriers who bring goods into this country, and that sort of thing.”
Tens of thousands of importers rely on customs brokers every year to help get their shipments cleared at the border. For each of these shipments, important data must be made available to government officials.
Putting that data, which may include the shipment’s point of origin and eventual destination, into the proper format for border clearance is the main job of customs brokers. They make the importer’s task easier – nay, possible. Without that “paperwork” (much of which is electronic) being done, the goods won’t be allowed passage.
But there’s more to the customs broker’s role than the completing documents and filing them with the CBSA. As the CSCB states at its website, “customs brokers are now helping importers leverage that information into a strategic advantage, turning information into critical business intelligence. They are offering a growing range of specialized services to help importers develop new product lines, explore new markets, evaluate the impact of global change, and cut costs.

Finding a partner
Back to that whole thing about customs brokers, as West put it, “managing relationships.” As in any type of relationship, choosing the right friend or partner is of utmost important. The CSCB’s website (www.cscb.ca) offers some pointers.
Generally, says West, “I’d suggest that if an importer has an idea of what they want to do, then they should meet with a couple of brokers, using some pretty standard questions in terms of what a broker provides. They’ll find a fit, I think, pretty easily.”
One question the website suggests the importer ask a customs broker is “Does your firm have a specific area of expertise?”
A few other questions at the website: “Do you have experience with and current knowledge of the goods that will be imported by my business? Can you provide me with some references from clients who import the same or similar items? What do you require from me to begin development of my database records?”
Then there’s this one, which Jensen’s Pasosky says is quite important: “How will we work together to develop a compliance plan to clarify our responsibilities and minimize our exposure to administrative monetary penalties?”
The administrative monetary penalty system, commonly referred to as AMPS, is the CBSA’s schedule of fines for non-compliance with customs rules. Penalties increase with each infraction, and infractions stay on an importer’s record for a few years. Penalties can apply to importers and carriers alike.
Office locations, reporting practices and alliances with foreign – especially U.S. – customs brokers are a few other things an importer might want to know about when choosing a customs broker.
Then there’s the matter of fees, which can be a bit tricky. “It’s not so much whether fees vary,” West says. “It’s whether the service being provided is the same. So, I always encourage importers to be very straightforward about their expectations, and I encourage brokers to be very clear about what their service is.
“For me it’s more about communication in terms of service levels and service options than it is about having a standardized fee.”
Not surprisingly, she puts in a plug for the CSCB. “I believe it’s very important that the broker belong to our organization. There are very few that don’t. It’s important that they belong to the CSCB, because you’re guaranteed that (the broker is) benefiting from the advocacy work we do and from the information we provide our members.”
From a carrier’s perspective, a customs broker’s availability is important, according to Bison Transport’s Trevor Batenchuk.
“The trucking industry is a 24-7 business,” says Batenchuk, supervisor of customs and customer service at Bison in Winnipeg, “so having the flexibility that the broker is open 24-7 allows us to sometimes deal with issues in the middle of the evening or at 6 o’clock on a Sunday.
“But, that being said, sometimes the customs broker needs to get more information from the shipper and the shipper is only open 9-to-5 Monday to Friday. It’s a little complex, but having the extra hours helps the drivers get across the border more easily.”
“The carrier is a key partner in ensuring that goods get across the border without trouble,” says Reynold Martens, executive vice-president of GHY International in Winnipeg. “We work very closely with the carriers. Carriers are very important to us.”
Problems for carriers at the border should be rare since documentation is filed well in advance of any border crossing, he adds, but carriers can count on GHY to do its best should the need arise for “last-minute intervention.”

Making it easier
If someone has the letters LCB (for Licensed Customs Broker) or CCS (Certified Customs Specialist) after his or her name, it’s a safe bet that you can rely on that person to have the knowledge and wherewithal to deliver quality service. But there are a few things importers and carriers can do make it all easier.
Tops on customs broker Bob Hobson’s list of tips: “Make sure you have documentation, and make sure you send details to the customs broker.
“We’ve gotten bills of lading here where the client says ‘Hey, I’m crossing at Emerson,’ and they don’t give us the date and time they’re crossing, they don’t give us the weight of the shipment or the number of pieces,” Hobson, president of Service Plus International, says in Winnipeg. Such details are crucial if you want a shipment to reach its destination at the appointed time.
West and Pasosky add that importers and carriers can help themselves a lot by getting more and more with the electronic information scene. Pasosky says about 95 per cent of documentation to the CBSA is released electronically. Clients can help that process along by submitting their data to the broker in electronic form rather than, say, a faxed document of numbers that then have to be keyed in.
A good reason to be thoughtful toward one’s customs broker is that the customs broker can really save the day for an importer or a carrier.
One quick example: Pasosky relates how JCBC got the CBSA to reclassify the imports of an Alberta company that had used a different broker. The reclassification resulted in hundreds of thousands of dollars in tariffs being refunded to the importer.
At Service Plus, Hobson has a broker-comes-through anecdote of his own.
“Last week,” he says, “I had a customer who phoned and said ‘Listen, all I have is a bill of lading here. No invoices. I’m hoping that you have invoices.’
“I was always made to understand that trucking companies are not supposed to move shipments without invoices when they’re moving goods across the border. They’ve got to have some sort of documentation.
“So, what I was able to do is get a copy of the invoice and fax it to (the importer’s) dispatch people. I’m not sure how they got it to the trucking company, but we were able to get them an invoice.”
Similarly, Martens says GHY was recently “called after hours by a carrier in the U.S. who was approaching the Canadian border hauling perishable goods without sufficient documentation.
“Our staff made a direct emergency intervention with the U.S. producer to obtain the necessary information, and arranged for the documentation to be processed and sent to the border crossing in time for CBSA to approve clearance, thus avoiding a lengthy delay that could have been costly for all the parties involved.”