UPS Brokerage Rates: Can You Avoid It? Here's Your Answer

International shipping can be a game-changer for any Canadian seller wanting to expand their horizons. It can broaden market reach, open new opportunities, and boost sales; however, if your shipping partner is UPS Canada, the UPS brokerage rates can catch you off guard.

This blog post will discuss brokerage fees, how they work, and if you can avoid them.

Key Takeaways

• UPS brokerage fees cover the customs clearance process, including documentation and inspections. These fees are additional to import duties and taxes and vary based on the value, type of goods, and destination country.
  
  
• You can lower costs by pre-paying import duties, using a customs broker, or negotiating fees if shipping in large volumes, among other strategies.
  
  
• There are services that offer simplified, cost-effective international shipping with upfront pricing, potentially reducing surprise fees and easing the customs clearance process.
  

What are Brokerage Fees?

A brokerage fee is the service fee charged by a shipping carrier to handle the customs clearance process for international shipments. If you ship with UPS, you will need to pay brokerage fees to them.

This fee includes tasks like:

Filling Customs Declaration

UPS brokerage fees often include entry preparation fees to help with customs paperwork and ensure you submit all the necessary documents accurately and on time. These fees depend on the documents you need, your package's value, and what you're shipping.

If you fill out customs forms correctly, you might avoid paying more fees or facing delays. Sometimes, carriers include these fees in your shipping charges. But often, they are extra and paid by the receiver.

Check the fees before shipping to avoid surprises for your customers.

Paying Import Taxes and Duties

Yes, you're paying UPS to handle customs paperwork and ensure everything works smoothly. However, you may still need to pay for applicable duties and taxes in addition to brokerage fees.

These charges are from the government based on the value and type of item you're importing. UPS can pay these on your behalf, and you will then reimburse UPS for the costs. But note that you may also pay bond fees to ensure customs authorities know that you will pay them.

The fees and taxes depend on the item's value, origin, and type. It's important to be aware of these extra costs when receiving international mail or shipments.

Handling Customs Inspections

Customs may inspect the packages to ensure the items meet regulations. If the customs decides to inspect the shipment further, it may cause delays and extra charges. UPS helps with the inspection paperwork and necessary follow-up.

Note that customs inspection can also increase the overall shipping cost. You should be aware of this to avoid surprises along the shipping journey.

How to Calculate UPS Brokerage Rates?

Shipment Value

The higher the value of the items you're shipping, the higher the brokerage fees. These charges are higher because expensive items often require more detailed customs paperwork and may need to undergo extra checks.

For lower-value shipments, the fees might be lower or even waived. Some shipments below a specific value qualify for free or reduced brokerage services.

Thus, it's a good idea to check the value limits before shipping. This will help you determine how much you or the receiver will need to pay in brokerage fees.

Type of Goods Shipped

Some goods, like electronics and food, require more paperwork or inspections when going through customs. Because of the extra work involved, UPS charges higher brokerage fees for these items.

On the other hand, everyday items like clothes or books might have lower fees because they are simpler to clear.

Each product type has different customs rules. Therefore, shipping more regulated or restricted goods means paying higher brokerage fees to cover the extra effort needed to process them.

Destination Country

Each country has different rules and requirements. Some countries have more complex customs processes, which means UPS may need to do extra paperwork or inspections. Unfortunately, these additional steps will lead to higher fees.

For example:

Shipping to countries with strict regulations or many import taxes may cost more in brokerage fees. Meanwhile, shipping to countries with simpler customs processes might result in lower charges.

It's important to know the customs rules of the destination country, as this can change the amount you or the receiver will need to pay.

Shipment Method

The amount will also vary depending on the shipping service used. For example, UPS will charge you for an entry preparation fee based on the value of the goods for UPS Standard (Ground) shipments. However, these fees are typically included at no extra cost for UPS Express or Expedited services.

To make it simpler, let's take a look at this sample computation:

Assumptions:

Shipment value: $10,000 USD

UPS Standard (Ground)

For ground shipments over $1,250 CAD, UPS typically moves from a flat fee to a percentage-based Entry Preparation Fee. 

• Entry Preparation Fee = CAD 112.10

This amount is from the base fee of 80.85 CAD (for the first 5,000 CAD) + 6.25 CAD for every 1,000 CAD.

• Disbursement/Bond Fee = ~2.7 of the duties and/or taxes UPS pays on your behalf (min. 6.00 CAD)

It is best for low-value shipments where the shipping savings outweigh the brokerage costs.

2. UPS Express/Expedited (Air)

This option has higher upfront shipping rates but effectively waives the entry paperwork fee.

• Entry Preparation Fee = 0.00 CAD (included in the service)
• Disbursement/Bond Fee = ~2.7% of the duties and/or taxes UPS pays on your behalf (min 10.00 CAD)

This option is best for high-value shipments, as the "free" brokerage often makes the total cost cheaper than standard or ground shipping.

Can You Avoid UPS Broker Fees?

It's not always possible to completely avoid UPS brokerage. But there are several strategies you can consider:

Pre-Paid Customs Clearance

For dutiable shipments, you can pre-pay duty and tax before the shipment arrives. This process helps speed up customs clearance and may lower costs.

Meanwhile, some items are exempt from import duties and taxes (non-dutiable shipments). So, you can avoid brokerage fees by providing the correct documentation to UPS ahead of time.

Use A Customs Broker

A customs broker is a professional who specializes in customs clearance. They help you deal with complex regulations, reduce delays, and potentially lower fees. Their established relationships with customs authorities can also speed up the clearance process.

Negotiate with UPS

If you ship a large volume of packages with UPS, you may be able to negotiate lower fees. Additionally, consider alternative shipping services that might offer better terms.

Consider Other Carriers

While UPS is a popular choice for international shipping, you still have other options you can consider. Many services offered by other carriers are worth comparing rates and services. Some courier and postal services may also have different brokerage policies or offer more competitive pricing.

Streamline Your Shipping with Stallion's Easy-to-Use Solutions!

If you need to know which carrier to explore first, why not start with Stallion? We offer easy-to-use solutions that can streamline your international shipping process. Plus, you can save time and money with what we provide!

Why choose Stallion?

• Simplified Shipping. Our user-friendly platform makes booking shipments, tracking orders, and managing your shipping needs easy.
  
  
• Affordable Rates. We offer competitive pricing without compromising on quality. Enjoy cost-effective shipping solutions that fit your budget.
  
  
• Reliable Service. Count on Stallion for dependable and timely delivery. We prioritize customer satisfaction and strive to exceed your expectations.
  

How does our international shipping service work?

Like UPS, Stallion will process customs clearance on your behalf. Once we receive the shipments, you can wait for them to arrive at their destination. No more follow-ups!

Plus, all payments will reflect upon checkout. This means that there will be no surprise charges along the way of payment. We guarantee upfront payments!

Final Thoughts

UPS brokerage can be a significant expense for Canadian online sellers. By understanding how it works and exploring the options available, you can maximize its impact on your bottom line.

But if you want a more hassle-free and affordable international shipping option, you can ship with Stallion - Canada's leading eCommerce shipping company.

Claudine Joy Rada

Candy Rada is a dedicated professional with tons of experience in content writing for the shipping industry. As a literature degree holder, she excels in creating engaging content with strategies that enhance brand visibility. She enjoys playing with her cats, reading dystopian books, and joining trivia games in her free time.