Crossing the Line
Getting goods across the U.S. border has never been harder. Finding a good customs broker, as a result, has never been more important.
“It’s a labyrinth, a rabbit hole,” says John Wellwood, describing his efforts to illustrate the process of customs brokerage. Wellwood is designing a book about the import and export business called Business Without Borders: The Story of A&A Contract Customs Brokers, and says he was originally thinking of basing the book’s three-page fold-out about the customs process on a Snakes & Ladders game board – “make one wrong move and you slide back to where you started.”
The problem: there would have been too many snakes and no ladders. When Wellwood pulled back the curtain and attempted to track the progress of a single mandarin orange imported from Yokohama, Japan, to your kitchen, he discovered a Byzantine complexity of rules and regulations that exists on both sides of the Pacific.
Given the complexities of negotiating the passage of goods across Canadian borders and the gauntlet of regulations and red tape that has arisen since 9/11, it’s no wonder that customs brokers such as Surrey-based A&A Contract Customs Brokers Ltd. are experiencing boom times (in A&A’s case, revenue growth of 15 per cent each year since 2001). In the first eight months of 2008, over $27.8-billion worth of goods were imported into B.C. and over $21.8 billion more were exported from the province, according to Statistics Canada. Without the help of customs brokers, many of those products wouldn’t have made it across.
Consider that mandarin orange waiting in a container on the docks at Yokohama. Its journey doesn’t begin without couriered documents (commercial invoice, packing list, bill of lading, exporter statement of origin and certification of fumigation and phyto-sanitation). After three or four weeks crossing the Pacific, it’s greeted by Canada Customs in a five- to 10-day process that examines everything down to the wood packing and soil traces. Then there’s the bonded warehouse delivery process: the importer data; the steamship, agent and customs releases; the shipment data entry; importer details; shipper details; manifest number; transaction number; carrier code; vessel and voyage number; quantity, weight, description of goods; purchase order number; invoice number; BOL number; and container number – to land on just a few of the steps of that metaphorical game board. And don’t misquote the tariff classification number (for a mandarin orange, 0805.20.00). A mistake such as that, or the lack of a label identifying the product as Japanese or an error on any written forms, may cause the importers rejection, more delay or one of over 300 different kinds of financial penalties from $25 to $25,000, often applied retroactively over the previous 10 years.
Navigating this complex maze has become big business. Among the major players in customs brokerage are large multinationals such as Universal Parcel Service of America Inc. (UPS), FedEx Corp. and Bellville Rodair International Ltd. (BRI), followed by Ontario-based Livingston International Inc. On the second tier are local companies such as A&A, which is family-owned and unwilling to divulge annual revenues but counts 2,000 core clients and nearly 4,000 incidental and walk-in clients annually. With offices throughout Canada as well as in Washington state and California, it is widely considered among the largest B.C.-based brokers.
“In reality, there are a lot of different niche players in our industry, but from the customer’s point of view we all do the same thing,” says Graham Robins Jr., A&A’s second-generation owner, as we talk in his sparsely decorated office near the Pacific Highway border crossing on Highway 176. Through the window one can look across the border and see Robins’s 30,000-square-foot warehouse. “Although we’re larger, we like to consider ourselves a boutique firm,” adds the 35-year-old Robins, whose company has grown from 18 employees in the mid-’80s to 220 employees today. A&A offers access to brokers 24-7, an essential service for the importer whose carrier arrives at the border at 3 a.m. or whose agent in Beijing requires information urgently at noon – their time. Robins says that while some small-company owners still brave the borders alone, pen in hand to fill out the required documents, that’s changed dramatically post 9/11.
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