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Major trading partners, the U.S. and Canada share a border where billions of dollars in goods and services are traded annually. In 2019, U.S. goods and services trade with Canada reached about $718.4 billion—including $360.4 billion in exports (from Canada) and $358 billion in imports (to Canada). As the U.S.’ second-largest goods trading partner, Canada is a prime target for companies that want to use cross-border trade to grow their sales, increase market share, and reach a broader swath of customers.
Tackling the Challenges of Cross-Border Trade
An appealing proposition for companies that have already experienced success in the domestic market and that want to stretch their boundaries, cross-border trade presents new logistics and transportation challenges that individual companies aren’t always prepared to tackle. There are rules and regulations to factor in, subtleties to understand, and processes to follow in order to get your products from origin to destination as quickly and affordably as possible.
In light of these and other cross-border complexities, DB Schenker developed a “Canada Made Easy” (CME) offering that takes logistics and transportation burdens of cross-border trade off the shipper’s plate. At its core, CME provides freight consolidation at origin, line haul to a destination terminal, deconsolidation at that terminal, and then shipment to final destination. Also known as a hub-and-spoke or pooled distribution approach, CME leverages multi-customer fulfillment in a simple, consolidated line-haul network.
“We strategically placed origin terminals in the U.S. where, based on our customers’ needs, we pick up the freight from multiple different companies, consolidate it, and then send one, consolidated line haul across the U.S.-Canadian border,” said Rob Segsworth, DB Schenker’s Vice President/Head of Land, Canada.
By doing this, DB Schenker simplifies the customs clearance process for shippers and also vastly streamlines a process that would otherwise require different carriers, logistics providers, steps, and procedures. The service is extremely useful for companies that would otherwise ship less-than-truckload in an environment where capacity is constrained and the truck driver shortage is in full effect.
“Instead of shipping 20 different small orders to Canada, we consolidate them into one and have them go through as a single entry for customs,” said Segsworth. This not only simplifies the customs clearance process, but it also helps companies avoid shipments delays and extra charges (e.g., to a broker that has to get the shipment released).
Leveraging a Strong, Reliable Network
With no single carrier covering all points in the U.S. or Canada, shippers are forced to use multiple providers for their cross-border shipments. Strategically located in eastern and western Canada, DB Schenker’s deconsolidation facilities feed shipments directly to final-mile carriers that deliver the goods to their final destinations.
By bringing those shipments to its Canadian deconsolidation facilities, DB Schenker can match them up with final-mile carriers that have the regional presence needed to execute those deliveries quickly and efficiently. “Depending on where it’s going in Canada, the shipment will either be line-hauled to Toronto or Vancouver,” Segsworth explained. “From there, it’s deconsolidated and sent out with the appropriate final-mile delivery provider.”
Competitive with the LTL model from a transit time perspective, CME greatly simplifies a process that would otherwise have to be managed by a company’s internal resources, brokers, and carriers. In return, companies get a single logistics provider to work with, shorter shipment transit times, lower brokerage fees, and a simpler way to move multiple orders across the border into Canada.
DB Schenker’s CME offering also facilitates some of the more challenging aspects of cross-border trade, including the trade of consumable or medical products, both of which require special handling and customs clearance.
“We have a network of approved vendors and partners in place to manage these complexities quickly and efficiently,” said Katherine Tapales, DB Schenker Canada’s Manager, National Distribution, Land Transport. One preset shipping lane from Chicago to Toronto operates on a daily basis, for example, which means all shippers—regardless of individual freight volume or timing—can rest easy knowing that their shipments will move “no matter what,” Tapales added.
Protecting Commitments to Customers
Without a service like CME, companies are relegated to using transactional cross-border freight models that incorporate many different manual processes, providers, carriers, and other “moving pieces” that can hold up a shipment or increase the total landed costs for the order. This, in turn, can hurt a shipper’s bottom line and negatively impact its customer service record.
With a business model centered on serving customers versus managing equipment assets, DB Schenker is adding a high level of value for U.S.-based companies fulfilling orders for multiple customers across Canada. “By providing a scheduled, consistent network and high level of service that shippers and customers can count on,” said Segsworth, “we’re servicing our clients while also protecting the commitments they’ve made to their own customers.”
If you’re looking for reliability, convenience, flexibility, and value when shipping ground in Canada, contact one of our local Canadian land transport experts today at cme@dbschenker.com to get started with Canada-Made-Easy.
