US-Canada Cross Border Logistics Focus: How to Manage Risk and Regulation

In a recent conversation, Grant Goldsmith, Head of Sales at Roanoke Insurance Group, and Glenn Patton, Managing Director Roanoke Canada, delved into the complexities of cross-border operations between the United States and Canada. They discussed crucial updates on the CBSA Assessment and Revenue Management (CARM) initiative and its implications for businesses engaged in cross-border logistics. They also cover the regulatory and contractual differences that make cross-border cargo operations more complex than meets the eye.

CARM is Happening – Get Ready Now

CARM, the Canadian Border Services Agency’s (CBSA) initiative, aims to streamline the accounting of duties and taxes through an automated system. Initially set to launch on May 13, 2023, CARM has faced a series of delays. Implementation is currently expected in October 2024. The CARM initiative requires importers to meet financial security requirements, which can be satisfied with a release prior to payment (RPP) surety bond or a 100% cash deposit. Importers, especially those in the US, should engage with their customs brokers now to ensure they are prepared for CARM’s rollout.

Differences in Cross-Border Operations

Grant and Glenn emphasized the significant variances between logistics operations in the US and Canada, especially regarding regulations and insurance. The United States-Mexico-Canada Agreement (USMCA) facilitates North American cross-border trade, but logistics companies must navigate different regulatory environments. For example, the US applies Carmack liability rules which can require a carrier to pay up to the full cost of a cargo loss, whereas Canada limits liability to $2 per pound unless otherwise stated. Understanding these nuances is essential for companies operating across borders.

Importance of Terms and Conditions

Another significant discussion point was the importance of having well-crafted terms and conditions. Glenn emphasized that companies must ensure their terms address the legal requirements of both the US and Canada. Properly written terms can clarify roles, limit liability, and protect against legal uncertainties in cross-border shipments.

Insurance Considerations for Cross-Border Operations

Appropriate insurance is essential for businesses engaged in cross-border operations. Companies must ensure their policies cover operations on both sides of the border. This involves working with brokers who understand the insurance requirements in both countries. Glenn stressed the importance of discussing specific business activities with brokers to ensure appropriate coverage. The same operation may have different insurance requirements on either side of the border.

The Value of On-the-Ground Expertise

Roanoke’s presence in Canada has significantly enhanced our ability to serve clients involved in US-Canada logistics operations. On-the-ground expertise has been invaluable in navigating the Canadian regulatory landscape and supporting both Canadian and US-based clients with cross-border operations. Roanoke takes a service-based approach to client success. Having a local presence in both the US and Canada enhances our ability to be the best transportation insurance and surety bond solution provider and risk advisor we can for our industry partners and customers.

Ready to Navigate Cross-Border Complexities with Confidence?

We specialize in providing tailored surety and insurance solutions for customs brokers and logistics service providers operating in the US, Canada and Cross-Border. Contact us today to ensure your business is fully prepared and protected as you navigate the evolving landscape of cross-border operations.