Mention cross-border trade and it is easy to think about large container ships crossing the seas between China and the U.S. International trade does rely on overseas shipping. But tons of goods cross U.S. borders with Canada and Mexico. Such cross-border trade is subject to just as many rules and regulations as goods carried on container ships.
A fair majority of the cross-border trade between the U.S. and its two neighbors is facilitated by the trucking industry. This sort of trade is sometimes known as ‘overland trade’. Regardless, U.S. companies hoping to drive cargo across the border to either Mexico or Canada must be qualified and registered carriers.
Becoming a Qualified Carrier
Qualified carriers must meet regulatory standards in both the U.S. and the importing country. For example, let us say you started a trucking company for the purposes of transporting cargo between the U.S. and Mexico. Your company would have to meet both U.S. and Mexican regulations.
Mexican law would require that you operate at least one vehicle that meets Mexican standards for at least six months. If your company would be responsible for paying any taxes in Mexico, those taxes must be up to date before your company can be qualified as a carrier. Maintaining qualified status would require staying current with all tax obligations.
Both countries have obligations relating to:
- driver training
- insurance coverage
- vehicle registration
- record keeping.
This is just a short list of the potential obligations trucking companies have to pay attention to in order to carry freight across the border. Note that obligations go above and beyond just operating trucks. There are even more obligations having to do with international trade compliance.
4 Main Concerns for Trucking Companies
Because the trucking industry transports such a large volume of goods across our borders with Canada and Mexico, an entire industry has sprung up around helping them maintain trade compliance. Vigilant Global Trade Services is an Ohio company that specializes in global trade compliance. They say trucking companies have four primary concerns related to overland transport:
1. Vehicle Service and Maintenance
The U.S., Canada, and Mexico all have stringent regulations relating to truck service and maintenance. Those regulations are designed to ensure that only safe vehicles are on the road. Trucking companies that ship only in the U.S. know just how stringent domestic rules can be. Throw Canadian and Mexican law into the mix and things suddenly become more complicated.
2. Updated Records
Everything from import taxes to shipping regulations change constantly. Nothing is worse for a truck driver than making it to the border only to find out that something has changed and they are working with outdated records. Drivers need trucking companies to keep things up to date so that they are not the ones left holding the bag when something changes.
3. Import and Export Paperwork
Along with records, trucking companies have a certain amount of responsibility relating to import and export paperwork. For example, a U.S. trucking company acting as an IOR (importer of record) is ultimately responsible for trade compliance for any goods being brought into the country.
4. Trailer Contents
For every shipment, trucking companies and their drivers are responsible for knowing exactly what is in their trailers. The actual goods being shipped must match the paperwork for those goods. Because trucking companies are ultimately responsible for their trailers, it is difficult to claim ignorance when something goes wrong.
Cross-border trade involving overland trucking is not any less complicated than trade facilitated by cargo ships. It all requires solid knowledge of international shipping rules and industry standards.