Declaring Pallet Charges for Customs (and What to Do If Your Pallets Are Wood)

Pallet charges are a common source of customs errors, and importers often assume they can leave them off the paperwork. The rule is more demanding than that.

So do you have to declare pallet charges for customs? In short, yes. Pallet and packing costs are due charges that belong on your commercial invoice, because Canada Border Services Agency (CBSA) treats them as part of the value for duty. If those pallets are made of wood, a second set of rules from the Canadian Food Inspection Agency (CFIA) applies, with extra documentation required before your goods can enter Canada. This guide covers both halves.

Do you have to declare pallet charges for customs?

Yes. Pallet and packing charges are dutiable costs that must appear on the commercial invoice, because CBSA counts them as part of the goods' value for duty. Leaving them off understates the value and creates a compliance exposure.

Under the transaction value method, the cost of packing that the seller provides to protect and market the goods is added to the price paid or payable when it is not already included. These packing costs cannot be deducted or excluded, regardless of where they were incurred. Pallets fall into this same category of disclosure. CBSA expects to see the number of pallets and their value reflected on the invoice presented at the border.

The practical takeaway is simple. Show the charge, value it accurately, and keep the supporting documentation on file in case CBSA asks how you arrived at the figure.

Why packing and pallet charges affect value for duty

Value for duty is the base figure your duties and taxes are calculated from, so anything that changes it matters. Packing materials such as cartons, cases, and containers are added to that base under the valuation rules and stay in the calculation.

For an importer, an understated value for duty is not a saving. It is a reassessment waiting to happen, often with interest and penalties attached. Accurate disclosure of pallet and packing charges protects you from that outcome. You can read more about how CBSA assesses value for duty on our valuation page.

The one nuance: pallets as a transportation cost

There is a narrow exception worth understanding. Where pallets, air-cushioning devices, or reinforced straps are required specifically by the transportation company, CBSA may treat them as a transportation cost rather than packing. Transportation costs can sometimes be deducted from the value for duty if they are already included in the price paid or payable and are properly documented.

This distinction is technical, and it depends on the facts of each shipment. If a meaningful amount of money rides on whether your pallet cost is packing or transportation, confirm the treatment with your customs broker before you file.

Not sure how a charge should be classified? The A & A valuation team reviews your invoice and supporting contracts before the entry is filed, so the number stands up to a CBSA review. Talk to an A & A broker about your shipment.

How to show pallet and packing charges on a commercial invoice

List pallet and packing charges as separate, clearly described line items on the commercial invoice, with the quantity and value visible. CBSA should be able to see what the charge is for without guessing.

A clean invoice treatment includes:

• Quantity of pallets in the shipment
• Value of the pallets, shown as a discrete amount rather than buried in the goods price
• Packing charges described plainly, for example "export packing" or "crating"
• Currency and terms of sale consistent with the rest of the invoice

If the charge is already built into the unit price of the goods, note that on the invoice so it is not counted twice. Consistency between the invoice, the purchase contract, and the freight documents is what keeps an entry from being flagged. If you prepare your own paperwork, our duty and tax calculator helps you estimate the landed cost before the shipment moves.

When your pallet is wood: ISPM 15 and CFIA requirements

If your pallets, crates, or dunnage are made of wood, declaring the charge is only half the job. Wood packaging material must also meet the international ISPM 15 standard, enforced in Canada by CFIA, or your shipment can be refused entry.

Canada prohibits importing or moving untreated, non-manufactured wood packaging into or through the country. The wood must be treated using an approved method and marked, so border officers can confirm compliance at a glance. This is a phytosanitary rule designed to keep invasive pests out, and it sits entirely separate from the valuation rules above.

Manufactured wood products such as plywood and oriented strand board are generally outside the wood packaging definition, because the manufacturing process already destroys pests. Raw, solid-wood pallets and crates are the items that need treatment and marking.

What the ISPM 15 mark must show

A compliant wood pallet carries a stamped IPPC mark that tells CFIA how and where it was treated. The mark identifies the treatment so officers do not have to take it on trust. It generally includes:

• The IPPC symbol, the stylized wheat logo
• A two-letter country code, such as CA for Canada
• A unique registration number for the treatment facility
• A treatment code: HT for heat treatment, DT for dielectric heating, or MB for methyl bromide fumigation

Heat treatment, dielectric heating, and methyl bromide fumigation are the only approved treatment methods for the international movement of wood packaging. A pallet without a legible mark is treated as untreated, even if it was in fact heat treated.

The Canada and US wood packaging exemption

Wood packaging that originates in the continental United States is exempt from ISPM 15 treatment and marking when moving into Canada. This 2005 exemption reflects the shared pest status of the two countries.

To rely on it, the shipment must carry export or shipping documents stating clearly that any unmarked wood packaging was produced in the US, Canada, or both. The exemption applies only to the continental US. Wood packaging from Hawaii or US territories must still bear the ISPM 15 mark. This is exactly the further documentation importers tend to miss: unmarked US-origin wood is fine, but only if the paperwork says so.

What happens if wood packaging is non-compliant

Non-compliant wood packaging is removed from Canada, and the consequences can reach the goods inside. If compliant and non-compliant wood packaging are mixed in one shipment, CFIA deems the entire shipment non-compliant and refuses it entry.

The importer pays all costs associated with removal, including treatment if required. A single unmarked wood pallet can therefore delay an otherwise compliant load and add cost that dwarfs the price of the pallet itself.

Quick compliance checklist

Before your next shipment crosses the border, confirm:

• Pallet and packing charges are shown on the commercial invoice with quantity and value
• The valuation treatment, packing versus transportation cost, has been confirmed where it matters
• Any wood packaging is heat treated or fumigated and carries a legible IPPC mark
• US-origin unmarked wood packaging is supported by documents stating its origin
• Compliant and non-compliant wood packaging are never mixed in the same load

Frequently asked questions

Does Canada require an ISPM 15 stamp on pallets?

Yes, for most imports. Non-manufactured wood packaging entering Canada must be treated and carry an IPPC mark. The main exception is wood packaging produced in the continental US, which can move unmarked if shipping documents confirm its origin.

Do pallets have to be heat treated to ship to Canada?

Wood pallets must be heat treated, dielectrically heated, or fumigated with methyl bromide, then marked, unless they qualify for the Canada and US exemption. Plastic and metal pallets are not subject to ISPM 15 at all.

Are pallet charges dutiable in Canada?

Pallet and packing charges generally form part of the value for duty and must be declared. In specific cases where pallets are required by the carrier, they may be treated as a transportation cost. Your broker can confirm which applies to your shipment.

Where do I show pallet charges on the commercial invoice?

List them as a separate line item with the quantity and value of the pallets, kept distinct from the price of the goods. If the cost is already included in the goods price, note that so it is not declared twice.

Get the declaration and the wood rules right the first time

Declaring pallet charges for customs comes down to two habits: put the charge on the invoice at an accurate value, and treat wood packaging as its own compliance task with CFIA. Miss either one and a routine shipment can turn into a held load or a reassessment.

A & A Customs Brokers has handled Canadian and US customs entries since 1979, across lumber, machinery, food, and retail goods where pallets and wood products are part of daily filings. If you want your invoices and wood packaging checked before your goods reach the border, talk to an A & A customs broker and we will make sure both halves are covered.