Street Cents

Brokerage fees

Branden from Vancouver, B.C. is unhappy because UPS charged him a bundle in shipping and brokerage fees when he had a replacement part for his inline skates shipped to Canada. In fact, the fees ended up costing him more than the part was worth in the first place! Street Cents ships out to find an answer for Branden.

Viewer Letter

Hi Street Cents,

I ordered a replacement part for my inline skates from a US website. The part cost me $14.00 US plus $8.75 US for UPS international shipping to Canada.

When I received it, I was forced by UPS to pay an additional $20 Canadian for what they referred to as "Brokerage Fees". In other words, I was forced to pay UPS a whopping total of $35 Canadian for shipping and brokerage fees for a product that only cost 20 dollars Canadian.

I had to pay them to get my part. But then I called up UPS' 'help' line to find out just what exactly "Brokerage Fees" are. The service agent would say only that they were standard charges and she refused to let me speak to a manager.

Street Cents, can you help?

Street Cents Response

Street Cents took a look at online shopping and shipping. We found out that when you purchase something online or by phone from a company located outside Canada, including the United States, there are often extra charges above the purchase price, exchange rate and cost of actual shipping.

These include:

taxes - GST and provincial sales tax

duty - a tariff put on goods manufactured outside Canada to help protect the Canadian manufacturing industry.

brokerage fee - a processing fee charged by the shipping company. This fee includes filling in a customs form to indicate the contents and value of the shipment and calculating duty and taxes.

When you ship something to Canada, you're essentially hiring someone (the shipping company) to represent you to bring goods across the border. The brokerage fees are usually a percentage of the shipment's value or a minimum fee. It's much like a handling fee and what a broker will do is fill in the appropriate paperwork, often just a single form stating the package's content and value, and send it and the appropriate duty and taxes to the government.

When you ship something by air, there usually isn't a separate brokerage brokerage fee, it's included in the base charge. Shipping by air is generally more expensive.

Street Cents contacted UPS to see what the fees Branden paid were all about.

They say customers are responsible for payment of all duties and taxes. But they also charged Branden $6.25 (entry prep fee) plus $5.50 (disbursement fee) plus $4.00 (COD charges) for a total of $15.75 in brokerage fees.

Street Cents shopped around to other courier companies. They all have to collect duty and taxes. But their brokerage fees vary. UPS was the most expensive one we found, so shop around before you ship. The least expensive way to ship that we found, was the post office. They charge duty and taxes, but only a $5.00 flat fee on top of that - for any package.

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original air date: February 10th, 2003

Page 1: Viewer letter & Street Cents response

Page 2: Customer service at UPS

Back: to Episode 17