Shipping rates for cross-border Mexico loads are fluctuating for the same reasons we are experiencing in the U.S. – the ELD mandate, rising prices, chronic driver shortage and soaring consumer demand. One factor unique to cross-border trade that’s impacting the market is the extreme imbalance between southbound and northbound traffic. According to JOC.com, there are not enough southbound trailers to match rising northbound demand for trailer space.
Mexico is an enormous market for both imports and exports. USTR.gov notes that in 2017 “The U.S. imported $340.3 billion worth of goods from Mexico, and exports to Mexico totaled $276.2 billion,” making Mexico the United States’ third largest market for both imports and exports in 2017. Despite recent tariffs imposed on some goods, trade flow continues to be strong across the U.S.-Mexico border.
For cross-border shippers, the export-import landscape has become exceedingly complex. Here are 5 tips to better manage your costs and processes:
1. Provide Essential Information in Advance
Incomplete or incorrect paperwork is a common reason shipments get delayed at the border, and it’s very avoidable. When you provide all the information about your freight in advance to your logistics partner, they’re able to coordinate and prepare shipment documentation that must accompany every cross-border shipment. Make sure you provide your logistics partner with accurate shipping addresses, piece counts, pallet counts, details about the items being shipped and timelines.
2. Increase Lead Time
A 1,000-mile load going from state-to-state in the U.S. won’t have the same transit time when shipping into Mexico. Everything slows down at border crossings for routine customs clearance procedures. The more lead time your logistics partner has to book a shipment, the more leverage they have to secure the best carrier for your lane, identify efficiency improvements, negotiate rates and accommodate delivery timelines. If you have a critical northbound shipment, your logistics partners will need time to find the right carrier to handle it. Sometimes, this requires considerable deadhead, which inherently increases costs. In a capacity-constrained environment, information and time are great equalizers.
3. Hire a Good Customs Broker
The carrier and 3PL will get your shipment to the border, and the customs broker will help you carry the ball over the goal line. Think of your customs broker as a CPA for freight. They prepare every shipment’s paperwork, so it complies with the export and import laws of U.S. and Mexico. If one form is out of place or you’re missing a signature, your freight could be delayed. Frequent communication with your customs broker is a must-have for smooth border crossing. Find a good customs broker and stick with them if they consistently provide excellent service.
4. Work with CTPAT Carriers and Partners
U.S. Customs and Border Protection (CBP) launched its Customs Trade Partnership Against Terrorism (CTPAT) program in 2001 in the aftermath of 9/11. According to the agency’s website, “CBP works with the trade community to strengthen international supply chains and improve United States border security.” CTPAT is a voluntary public-private sector partnership program for importers, carriers, consolidators, customs brokers and manufacturers. CTPAT members agree to work with CBP to “protect the supply chain, identify security gaps and implement specific security measures and best practices.”
The bottom line for shippers is when you hire companies that are in the government’s CTPAT program you lower your risk. CTPAT members are also less likely to be slowed down by CBP at U.S. entry points and will often experience shorter wait times at the border.
5. Use a Transportation Management System (TMS) for full Visibility
With so many moving parts in cross-border shipping, a TMS is critical to providing end-to-end visibility, tracking and connectivity among all parties involved. A TMS with predictive analytics and business intelligence capabilities will also enable you to use data to optimize your cross-border freight operations and identify opportunities for mode shift, consolidation and cost efficiencies.
Cut Through the Complexity and Hire Experienced Pros
There’s no doubt that cross-border shipping is a complicated business. By following our five tips here, you’ll reduce your risk and begin to optimize your processes. If you don’t have your core group of experts at your company to adequately handle logistics operations to and from Mexico, consider hiring a 3PL with significant experience in that part of the world.
GlobalTranz has a permanent office in Mexico staffed with bi-lingual logistics experts. Learn more about how we can help you cut through the complexity of cross-border Mexico shipping.