Canada Brokerage Fees - Fed Ex

Just thought I would share this. I had an item shipped from the US worth $50 and I paid just $18.50 brokerage fees to Fed Ex. (This is on top of the shipping charges).

This brokerage fee was just to pay roughly $3 worth of canadian tax. The brokerage fee amounts to roughly a 600% mark up for handling these duties(service includes a letter sent to me, processing my check and paying the customs duty and any costs incurred for non payments by others)

Here are Fed Ex brokerage rates for clearing customs to Canada;

Value for Duty ($); Fees
$0 - 20; No Charge
$20 - 40; $6.50
$40 - 75; $18.50
$75 - 100; $19.00
$100 - 200; $28.00
$200 - 350, $36.00
$350 - 500, $40.50
$500 - 750, $46.25
$750 - 1000, $52.25
$1000 - 1250, $57.50
$1250 - 1600, $60.25
$1600 - 5000, $64.25

As can be seen the threshold above $40 Canadian is where it starts to become a very high fee in relation to the duties/value of the item shipped.

At $40 the fee is 46% of the value of the item shipped.

At $1600 the fee is 4% of value of the item shipped.

According to the above table and value of your item shipped, you should consider whether to use Fed Ex or not and advise the sender accordingly.
You should also be aware that there are taxes applied in certain provinces which you must be assured from the buyer. I got hit twice for charges by Fedex for over $100 on items sold for $1000 and for $600 when the buyer refused to pay.
Do these fees apply to all services?

What service did you use?

Exactly. Both sides need to be aware of these issues when using Fedex, especially the exhorbitantly high fees in relation to modestly valued items.

When I called Fedex to enquire about why the brokerage fees were six times the cost of the service ($18.50 surcharge for a total of $22.50 dollars in order to process and pay $3 of customs tax), they just advised me quite bluntly to have things sent by regular post....
You should ask that packages from the US be shipped using USPS and not FedEx (or UPS). There aren't any brokerage fees with USPS - at least that has been my experience - and the ship time tends to be shorter. Global Mail Express is a great service for shipping out of the USA.

I've had several items shipped from the USA to Canada by USPS after I got wise to the UPS/Fedex rates. It has become a deal maker whether or not the seller will ship USPS. Sometimes there is a $5 fee for handling by Canada Post plus PST&GST. I can live with the that. The only problem is the limiting weight of I think 60 pounds.
FEDEX/ UPS/ DHL or any other transport company charge to take over the Cdn/ US border. They have to physically go down to customs and have the item cleared. There is a cost to it as you have found out.

You can have this charge made 0 ahead of time and get the paperwork from UPS/ FEDEX et al and clear it yourself. That would mean you would take the shipping document and the customs form (commercial invoice)to Canada Customs and clear it.

You would only pay sales tax on the item. The same as you would walking into any store in Canada.

I believe the exemption for sales tax is if it is marked a gift and the value does not exceed $35 Cdn. Then you would not pay sales tax. If you clear the customs with FEDEX/ UPS etc., you would still be subject to the charge for brokerage.

The post office charges $8.00 Cdn for that service, regardless the value.

Conversely, when Americans buy from Canada, they have little or no fees. They do not pay sales tax or duty when they get the item from Canada regardless the amount. They might pay a brokerage fee. The most anyone has mentioned to me (in excess of 700 packages sent) is $16.00. So their fears of getting packages from Canada are really unfounded).

So if you wish to make it cheap coming from the US, clear them via customs yourself. You have to call UPS/ FEDEX right away and let them know you wish to do so so they do not go to customs. You will have to weigh what cost you associate with you going to UPS/ FEDEX to get the paper work, go to customs, go back to UPS/ FEDEX and get the package.

I have been sending/ receiving packages from the US for 8+ years (probably 1000 plus) so I have had good experience and knowledge with this. I have also cleared countless packages with customs so I have had a lot of experience.

I keep in touch with buyers so I have had a good idea what US buyers pay. 99% of them do not even get billed the $16 brokerage fee.

PS. You can also have the brokerage fee made zero. Ship it air vs ground. They do not charge brokerage on an air shipment. I have found if you ship air, the cost is almost the same for the air shipment as is the ground shipment and the brokerage fee. However, you get the package in 1 or 2 days vs 5- 7 business days with ground. For smaller/ lighter packages, I use air.

If the cost is what gets you, then you ship ground and clear it yourself.

Hope that helps. I have paid a lot of brokerage fees on some items as my time/ cost is more than what UPS/ FEDEX charge. Your opinion of your cost/ time will be your own.
Brokers have to pay office rent and utilities and employees just like everybody else. Fed Ex and a broker are two different entities.
The crazy thing is I've shipped to Germany, England, Italy, and even China, with no extra fees!
Ncarv, you paid a fee. It was included in the price of the shipment and not itemized like say Fed Ex. Any shipment that is import or export must be brokered through a customs brokerage in which shippers are usually responsible for that arrangement. Being that I am a truck driver I know what the procedure is to move freight across borders and it always involves a broker. Google customs brokers and you will get the general idea of the procedure. Brokerage fees are paid to the broker although a shipper may take their slice for preparing the paperwork to present to the broker. And on that note the shipper might not be the actual carrier that brings the freight across the border. I have moved many loads for UPS and I dont even work for them.
I don,t use UPS or Fedex anymore because they charge too high for custom handling charged.The Postal service has to do the same work but they charge less fee.I don,t know why? Maybe they have to make more profit to their shareholders.I highly recommand to use Postal service,they charge less handling fee and more safe, less damaged.
Brokerage fees are pretty much a fixed cost to Fed Ex or UPS. That's why the rates on the various higher value items are not so different from each other. The reason they are higher compared to the lower priced items is probably (I'm guessing) because the lower priced items are cross-subsidized by the fees on the higher priced items. You can only charge so much or it simply isn't worth it for the buyer and seller to transact a lower priced item. Then, Fed Ex or UPS wouldn't get any business at all for lower value items.

There is no question that the postal service is the best value by far when it comes to brokerage fees. However, make sure that you get insurance. I've seen some postal workers chuck boxes around in a way that's frightening if you have valuables inside. Of course, who knows what the Fed Ex or UPS guys do behind closed doors.

Taxes are mandatory, both federal and provincial for items coming into Canada. usually the federal and provincial taxes are collected simultaneously, along with brokerage fees, upon delivery. However, in some provinces you may only be charged federal tax and it is up to you to voluntarily remit provincial taxes. I wouldn't hold my breath waiting for people to do this. For that reason, the trend has been to have both federal and provincial taxes collected simultaneously. You have to check with your own province to see what is done there.

One important tip. If you buy a demo model which is sold to you as "new" with full warranty and then you bring it into Canada, do not send in the warranty card unless you've paid taxes. I had a friend who did this and a few months later the RCMP showed up at his door to confiscate the item. Apparently big brother was watching. The warranty card had a serial number which showed that the product was originally imported into the U.S. from the manufacturer (It was made in the U.K.) And now the product is in Canada (The warranty card shows a Canadian address) with no record of taxes paid. Beats me how they got all the information together. But they did. There is a lot of police surveillance around and legislation requiring third parties to disclose certain information. Part of it concerns dealing with drug smuggling, but a lot involves anti-terrorism and money laundering, especially since 9/11.
FEDEX is not a broker. They have a wholy owned corporation to do it. FEDEX trade network. It is really FEDEX as FEDEX owns FEDEX trade network. Just a different part of the umbrella.
someone made a mention that you did not pay when you sent to China et al. The cost is for the buyer/ importer. Not the sender.

I find some think that they are going to be hit with a fee if they send something. not true. Customs is like sales tax. The buyer pays the tax. Not the sender unless the sender marks that they are going to pay.

That does not happen too often.
Let's avoid the misinformation.

UPS only charges a brokerage fee on Ground/Standard/Standard to Canada.

For all other services, there is no brokerage fee.

That was why I asked the question of the thread starter, What Service did you use?

As far as I know, Fedex Chaarges the huge brokerage fee only on Fedex Ground. I would like to know if this is incorrect.
Brokerage fees are always charged. If you use "standard" or "ground" service, the brokerage fee is a separate charge from the shipping fee. If you use a premium shipping service, the brokerage fee is not a separate charge but is included with the shipping fee. The websites for Fed Ex and UPS explain this.

The brokerage fees are for Fedex Trade Networks a subsidiary of Fedex.

I don't know exactly when the fees apply or do not apply so you may be correct that it is applied only on ground shipping. The stuff I received was sent by ground shipment - so you may well be right.

I'll check further and get back to you on this intention was just to raise awareness. The fee schedule I posted came directly from Fedex Trade Networks in Ontario Canada.
Not trying to give you a had time Shadorne, I just find that I am constantly posting corrections on the whole brokerage fee question.

You are raising awareness of the Fedex Ground Brokerage fees. This is a relatively new service - it has only been offered to Canada for a couple of years - so there is less awareness of the Fedex Ground fees as opposed to the UPS Ground/Standard/Standard to Canada fees.

I was on a board last month where a user spouted on against UPS Brokerage fees and proudly stated that he had just ordered something Fedex Ground to avoid the evil UPS. I didn't even answer that one :)
Riffer is correct. You only pay on ground. Not on air. I send small items via air as it usually works out to be the same price for an air shipment (with no brokerage) versus a ground shipment and brokerage. You end up getting the item in one or two days vs 5 - 7 days with ground.

UPS/ FEDEX ground/ DHL etc. are all the same. FEDEX ground used to charge less than UPS, but they are really the same amounts for brokerage. It is no different for companies that import. They have a customs broker and pay those fees.
I confirm the brokerage rates I gave you are for GROUND only.

I ordered a $40 paperback book from Sweetwater Sound in the USA using online service.

Sweetwater Sound sent the paperback book in a large cardboard box six times larger than the book (not an envelope) and they sent it by Fedex ground.

In the end the brokerage fees were half the cost of this paperback book.

Of course if they had simply sent it by US postal service airmail, they would have saved me about $20...

You live you learn....don't always believe what you read...

Sweetwater has the best shipping deal on the planet: FREE SHIPPING* with no minimum purchase. We've chosen FedEx as our principle carrier due to their expertise in handling sensitive electronic equipment as well as a shipping time that's twice as fast as the competition. (1-5 days vs. the 2-9 days shipping time that the competition offers.) It's all part of the Sweetwater difference; your order arrives safely, carefully handled, in half the time, and for FREE*.
Slikric3000, perhaps we misunderstand each other. I did not pay a fee included in shipping and it was in addition to the brokerage fee. It was provincial taxes which the consignee is supposed to reimburse Fedex for. When the consignee refused to pay, Fedex Ground charged the taxes to me. I had estimated, and collected, shipping charges from the buyer based upon the Fedex Ground charge solely. The additional fees were a complete surprise to me and, unfortunately, I will not ship to Canada this way again. It is too bad, because Canadians are usually the most honest and easiest people to deal with. I just happened to wind up with two bad apples, and you know what they say about bad apples . . .
Look Ncarv, regardless of whether you got a bill or not ANY import or export shipment must be brokered through a customs broker. Believe me. Every time I bring freight into Canada or out I have to go see the broker. I am quite sure brokers don't work for free. So whether its you or whoever, somebody has to pay it. That is all I am saying. Like I say google customs broker, it is explained in pretty clear english that even I can understand.
I sold a guitar pedalboard to a guy in Canada about 2 months ago. I shipped it via Fedex. I just got a letter in the mail from Fedex stating that the Consignee (buyer) hasn't paid the clearance charges and that Fedex policy is to bill the shipper for the charges if not paid by the buyer. Fedex is going to make a second attempt at billing the buyer and if the fees remain unpaid, they are going to bill me! What kind of crap is that? What if I decline to pay? How can Fedex bill me if it's the responsibility of the buyer to pay the duty, taxes & brokerage fees?
Spenceroo, you should contact the buyer and ask him why he hasn't paid.

Unlike UPS and Canada Post, Fedex delivers the goods and bills later. UPS and Canada Post come to your door and no pay, no parcel. Fedex sticks a label or something on the parcel saying that the bill will follow later, so the buyer shouldn't be unaware he is going to get billed.
I did contact the buyer and he said he paid them at the door, and that Fedex wouldn't have delivered the package without being paid the fees. Fedex told me that they don't collect at the door, and that packages under $1600 are delivered and the buyer is billed later. I don't know that I have any recourse. The bill is for $70 and it would probably cost more than that to pursue it. I'm never shipping anything to Canada again. I guess you learn from your mistakes.
I would give the guy bad feedfack, becuase he is full of it. I have had many items come up from the U.S. to Canada and everytime with UPS they collect at the door. For U.S. sellers UPS or USPS is the only way to ship to Canada unless you know the buyer.
Fedex will not collect at the door and will send a bill later and if the Buyer doesn't pay then you the seller will end up paying.
Sad to say but we do have some deadbeats buyers up here.
I myself do most of my own Brokerage myself now, so I just pay Taxes, and just so others know, if you clear it yourself you can still have UPS deliever it to your door, as the shipping charges have already been paid or you can pick it up.

Shipping to Canada is not a problem but don't ship Fedex.
Use UPS or USPS.
Yes Spenceroo, buyer is probably lying or stupid. If he paid, he should be able to show you a receipt.

On another note, despite clear instructions to send USPS - acknowledged by the seller, I have a parcel coming UPS Standard. My only hope is that he undervalued it for customs, otherwise I am $50 the poorer. What are you going to do?

I would also note that I will not send anything down to the States using anything but Canada Post. Fedex and UPS are starting to play the same games they play up here with the Canada to US business.