At some point in every importer's history they will undergo an Canada Border Services Agency (CBSA) examination. Therefore, it’s important to understand the costs associated with one. Keep reading to learn about the examination process and how it affects your imports.
Why Was My Shipment Referred For Examination By CBSA?
CBSA examines commercial shipments in all modes for a variety of reasons:
- A pre-arrival referral for examination based on a risk assessment for health, safety and security reasons from the National Targeting Centre (NTC).
- A national, regional or local target in CBSA systems by a Participating Government Agency (PGA).
- First Port of Arrival (FPOA) referral made by a commercial Border Services Officer (BSO). These exams can take place at the FPOA or an inland warehouse depending on the risk assessment or reason for referral.
- Random Referrals are examination referrals selected randomly by the CBSA system.
Where Does The CBSA Examination Take Place?
The mode of transport and port of crossing determine where the goods will be examined:
- Land border commercial examinations are conducted at a FPOA examination warehouse.
- Air cargo examinations take place at a sufferance warehouse at the port of release.
- Marine/rail container examinations for health, safety and security reasons are conducted at a FPOA warehouse.
- Marine/rail container examinations for commercial compliance are conducted at an inland sufferance warehouse.
What Are The Costs Of CBSA Examinations By Mode?
Land Border Commercial Examinations:
Under the Customs Act the carrier must present their goods for examination to a BSO if requested. This includes unloading any conveyance and unpacking any package. Under the CBSA time standard, the goods must be presented for examination within two hours. The CBSA has arranged for a pre-approved offload service provider which is available at the high volume designated FPOA to offload conveyances selected for examination in a timely and efficient manner. Carriers may perform the offload themselves with their own equipment or engage another service provider of their choice if approved by the BSO. All safety and security at the port is respected. The time standard of two hours must prevail.
Locate a designated FPOA or review the costs of an offload by the CBSA service provider here.
Pacific Highway Commercial Operations has a Gamma Ray Vehicle and Cargo Inspection System. This is a non-intrusive tool that can be used quickly and efficiently to verify the presence of legitimate goods and investigate suspicious and unknown materials. This technology assists with reducing costs associated with cargo inspections. CBSA does not charge the carrier or importer when a conveyance and shipment undergoes a Gamma Ray Inspection.
Air Cargo Commercial Examinations:
As with land border examinations the carrier must present the goods for examination to a BSO if requested. Air cargo examinations whether for CBSA or PGA inspection must be made available at the sufferance warehouse at the port of release.
The sufferance warehouse licensee will unload and move shipments, and hire personnel to locate, open and close packages for CBSA examinations.
Charges for these services and storage may be billed to the carrier and/or importer. These charges can vary depending on the contract the carrier has with the warehouse operator. Refer to CBSA’s Appendix D for more information.
Marine Container Examinations:
Physical examinations of marine containers are done with the assistance of the Canada Port Authorities. They are legislated to provide facilities for CBSA inspection and these facilities are known as Marine Container Examination Facilities (MCEF) which can be located at the FPOA and Container Examination Facilities (CEF) which are generally off-site.
Marine Container Examination Process
At the FPOA the vessel arrives and the containers are discharged and stacked at the Terminal Storage. Containers not selected by CBSA for exam are authorized by CBSA to be transported to their final destination.
Containers that are targeted or selected by CBSA for examination can be staged for a dockside exam, Mobile Large Scale imaging and/or furtherance to the MCEF/CEF for an intrusive examination.The terminal operator ensures the container is moved to the sites for dockside exams and/or Mobile Large Scale imaging. Containers which require destuffing must first undergo fumigant testing. According to CBSA's Testing and Ventilation of Marine Containers,
“Chemical fumigants are widely used in the shipping industry as agents to kill invasive alien species in cargo loads, preserve cargo and maximize shipping techniques. These chemicals can be harmful to human health if precautionary measures are not followed.”
The container is tested for 10 hazardous fumigants and solvents. If the container tests positive the container must be ventilated for a maximum of 3 days prior to the destuffing for examination by CBSA. The CBSA does not charge for the fumigant testing.
After the fumigant testing and ventilation, the container is moved to the MCEF/CEF where it is fully destuffed, the contents examined, and the container itself may too be examined.
CBSA does have a service standard for examination, which states that CBSA will strive to conduct a marine container examination within 24 hours of the arrival of the container at the MCEF/CEF. This service standard does not include weekends or holidays. CBSA is responsible for the costs associated with their services such as the officers examining the container and the equipment and tools required for the container examination.
CBSA informs the warehouse operator of the containers requiring an examination. FPOA examinations take precedence over a commercial compliance examination. The warehouse operator coordinates with the highway carriers to move the containers from the terminal to the MCEF/CEF. They then coordinate and are responsible for the offloading and reloading of containers for presentation of cargo for exam.
The warehouse operator is responsible for all truck movements at the MCEF and CEF such as moves to and from the ventilation area and examination bays. The warehouse operator generates the fees for presenting the goods for exam, to cover the cost of transportation to and from the examination facility and the unloading and reloading of the container. They bill these costs to the shipping lines who then pass this cost to the importer.
Marine carriers are responsible to ensure that the container is picked up from the terminal and transported to the MCEF/CEF. They must monitor the container and its subsequent return to the terminal after it has been examined. All terminal charges are borne by the carrier who subsequently charges the importer.
The highway carrier, when informed by the terminal operator which containers need to be examined by CBSA, must make a reservation for pick-up of the container at the terminal with the terminal operator. Reservations sometimes can be made about three days in advance. The highway carrier then generally has a one hour window around their reservation time to pick up the container at the terminal and transport it to the MCEF/CEF. Once the exam is completed the highway carrier returns the container to the terminal.
The container is then released by CBSA and can now be delivered to the importer/consignee by the highway carrier or the drayage company once a reservation has been made to pick up the container from the terminal.
Marine Container Examination Costs
The Marine Container Examination process involves many key stakeholders each of which charges for their services. These charges are ultimately borne by the importer and can be costly depending on the efficiency of each stakeholder.
There are costs related to every container examination that are charged by the stakeholders to the importer. They can include drayage, carrier detention, demurrage and warehouse services to unload and load.
Terminal operators allot free time for cargo to be left at the terminal. This free time includes all the movements to various types of examination and or ventilation of the container. Generally the standard is 4-5 days. When delays exceed the amount of free time allowed for the container storage on the terminals, a late fee known as demurrage is charged. Depending on the type of container i.e. 20’, 40’ or a reefer unit, the demurrage charges can range from $120 to $300 per day.
Additional charges can be added to include monitoring the temperature on a reefer unit, and supplying power to the reefer unit. The longer the container or reefer stays at the terminal the higher the costs per day. Another charge for the importer is the “detention” fee which is charged when an empty container is late on being returned to the terminal. Warehouse operators charge for the offloading, opening of packages and reloading of the container. Depending on the size of the container and how it is loaded. This cost can range from $550 - $3500. The costs of container examinations in the marine mode can range anywhere from $500 to $8000 per container. The average is generally $3500 - $4000.
Shipments in the rail mode generally are via container. The process and costs are very similar to the marine process.
The reasons for referral of a shipment or container are exactly the same as the marine mode. A shipment or container that is held for examination is transported to a rail sufferance warehouse where the container is offloaded and prepared for an examination by a BSO.
The costs of transporting the container are borne by the carrier who subsequently bills the importer. The cost of offloading and reloading the container at the warehouse is also charged to the importer by the warehouse operator. Just as in the marine mode the average cost can range from $3500 - $4000 per container.
When considering shipping into Canada, the factors of time and cost are important but also one must consider CBSA examinations and the subsequent costs of these examinations. Although CBSA does not charge for its examinations, transport costs and destuffing costs can be significant.
Although the vast majority of shipping containers or truck loads coming through Canadian ports are not selected for examination there is no way to predict a CBSA exam. You need to be prepared for the uncertainties in the supply chain and the subsequent costs.
In addition, be sure you study and question the charges imposed upon you by the Port Authority, warehouse operator or carrier and ensure that you know exactly what you are being charged for.