Duty Free Cross-Border Ecommerce: How To Prepare For Success

The recent changes on the duties and taxes for inventory that is imported from overseas has presented significant challenges to brands within the United States. Seemingly overnight, brands have seen a drastic increase in costs within their supply chain. While these changes are a considerable obstacle, there is a reliable solution.

At a52 Fulfillment, we offer our US Ecommerce Fulfillment from Canada Solution, which can yield significant savings for brands who are facing steep duties on imported inventory they intend to sell online.

Duty Free US Ecommerce Fulfillment From Canada

Our solution utilizes both Section 321 of the US Customs Act and the Canadian Duty Relief Program. These are two independent programs from the United States and Canadian governments that, when utilized simultaneously, may result in relief from the unforeseen added costs to your supply chain.

Section 321 of the US Customs Act is an amendment to the Tariff Act of 1930. At its core, it is the limit of when an order can enter the US, duty and tax free. In 2015, entities with large market-shares in the ecommerce space worked with the US government to increase the threshold from $200 to $800 USD. This increase was significant, and now covers the majority of ecommerce purchases that consumers make online.

Around the same time, the Canadian government implemented their Duty Relief Program, which allows companies to defer payment on duties for upwards of four years on inventory that’s shipping internationally. Effectively, this allows your distribution center in Canada to act like an FTZ or bonded facility without the inventory segregation. This program benefits both the company as well as the Canadian Customs as it alleviates duty drawbacks, which are costly and lengthy processes for all parties.

While this solution is active and successful day-in and day-out for multitude of a52 clients, there are fundamental elements that need to be in place from both sides of the partnership – a52 and retailer – to ensure the solution launches successfully.

To be successful in duty free ecommerce across borders, the following 7 things are required:

1. System-to-System Integration

The ability for a 3PL like a52 to integrate our Warehouse Management System to any platform – from CRM and ERPs, to accounting software and webstore platforms – is integral in providing a seamless fulfillment experience for both the brand and consumer. Key pieces of data such as Order Value and Country-of-Origin for each SKU need to be included at an order-level, as they are a necessity for cross-border ecommerce. Having this data transmitted automatically will contribute to swift turnaround time on US-bound ecommerce.

2. End-to-End Consumer Visibility

Real-time inventory availability must be transmitted back and forth so that the consumer has visibility on what’s available to purchase at anytime. Once an order has been placed, all the data should be transmitted over to the 3PL’s WMS automatically, and from there, be fulfilled within their WMS. Once shipped, the carrier data, like tracking, must revert to the brand again. This visibility is key for a great customer experience.

3. Responsive Inventory Scalability

As a brand grows their inventory holdings in Canada, in order to fulfill US orders, their required footprint within a fulfillment center will also grow. For these companies, a 3PL partner – like a52 – who can scale with your volume is important. Otherwise, the consumers’ needs may not be met. The third-party logistics and order fulfillment provider should be able to secure additional space as needed, as well as building infrastructure like racking for storage and pick-and-pack areas with ease and efficiency.

4. Strong Customs Broker & Freight Forwarder Partnership

Along with partnering with a strong 3PL fulfillment company like a52, a brand should also work with a Customs Broker and Freight Forwarder who are experienced with the Canadian Duty Relief program. This ensures that all inbound shipments arriving to Canada from overseas are properly documented as being part of the program, and will clear through customs without delay, having duties paid. With our experience in the industry, a52 has relationships with numerous recommended Customs Brokers and Freight Forwarders.

5. Forecasting

For a brand, the ability to forecast accurately is an essential element of being successful. Accurate forecasting creates efficiencies throughout the supply chain; from production to transport and all the way down to fulfillment and inventory management. The forecast for orders isn’t only be at a seasonal or monthly level, but as granular as the week and day, particularly for ecommerce. With systems integration in effect, the ability to collect and analyze data becomes easier, and so does a brand’s ability to forecast accurately.

6. Fast Order Fulfillment

Whether fulfillment is done in Canada or the US, the shared expectation is that the inventory is available and ready to ship quickly. This means that a brand needs a third-party logistics provider like a52, who can scale as the inventory holdings increase, while continuing to offer excellent order fulfillment service levels for orders destined to both sides of the border.

7. Documentation and Reporting

When shipping a cross-border ecommerce order, it’s important that the proper commercial documentation is generated automatically. The documentation should note that the shipment is Section 321 and state important details such as Country of Origin, HS Code, and Order Value, as to ensure the order enters the US without delay. If your brand is on the Canadian Duty Relief Program, there are also reporting requirements for the Canadian government, which a52 also supports.



The world of high-touch ecommerce fulfillment is a costly endeavour for any brand. Consumers expect faster turnaround on their purchases in parallel with competitive retail prices. The recent increase in duties further impact US-based retailers significantly.

At a52 Fulfillment, we offer a solution that is tailored, integrated, and transparent. These are the three principles by which our whole company and culture are built.

  • We Tailor our business to yours so that a52 is enabled as an extension of your brand.
  • We Integrate around your company’s software systems and methods to create a seamless partnership on both sides.
  • We will always be Transparent, with real-time access to our WMS client portal, which is available online 24/7.

It is these core principles that contribute to a52’s successful US Ecommerce Fulfillment from Canada Solution. Contact a fulfillment services expert at a52 today to learn more about our solution!