U.S.-Mexico Transborder Logistics
The North America Free Trade Agreement (NAFTA) went into effect in 1994. It was implemented to promote trade between the United States, Canada, and Mexico. This pact was eventually replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020. While both agreements had/have their supporters and retractors, there is no doubt that the net effect has been a healthy increase in trade between the three countries. Transborder shipping can be an unfamiliar process. Even with a free-trade zone, there are still multiple factors that need to be taken in to account when moving freight across these international borders.
In particular, let’s focus on the movement of cargo between the U.S. and Mexico. In 2019, Mexico surpassed China as the United States’ top trading partner, and also ranked as #2 for U.S. exports. That same year, over 4.7 million truckloads crossed their shared border. Additionally, many American companies have established manufacturing operations – or ‘maquiladoras’ – within Mexico, adopting a practice known as ‘near-shoring.’
Clearing Customs is the most important factor in this process. Being meticulous and taking the time to plan and prepare all the correct paperwork can avoid long and costly delays at the border. This includes obtaining all necessary permits in advance. Your logistics service provider needs to have a firm understanding of the system, and be experienced with handling all compliance matters with the shipment. Providing a properly coordinated border crossing is crucial in the flow of merchandise, where every truck has to be unloaded, and the freight inspected by the Customs broker before being cleared. It’s also extremely beneficial be enrolled in the U.S. Customs Automated Clearinghouse program, in order to improve cash flow, eliminate disbursement fees, and streamline your company’s overall payment process on these particular imports/exports.
It’s crucial to select ports of entry that are secure, safe, and reliable. Even though there are over 300 ports of entry between the U.S. and Mexico, some of the most prominent (in terms of total trade accounted for) are Laredo (TX), El Paso (TX), Otay Mesa (CA), Hidalgo (TX), Saint Teresa (NM), Eagle Pass (TX), Nogales (AZ), Brownsville (TX), and Calexico-East (CA). In 2019, Laredo accounted for 43.6% of total trade.
Freight movement within Mexico can take on many forms. Ensure your logistics service provider is able to arrange multiple transportation options, such as full truckload (FTL), less-than truckload (LTL), intra-Mexico truckloads, time-definite services, local cartage, door-to-door, “hot shots,” and “milk runs.” If you’re shipping via ocean, also make sure your service provider accommodates full container loads (FCL) or less-than container loads (LCL).
Consolidations are an important feature to take advantage of. Your service provider should have strategic warehouse locations where freight can be consolidated, in order to minimized trips in and out of Mexico.
