Cross Border Mx/USA, a strategy to facilitate trade

3 August, 2021 foreign trade

The border between Mexico and the United States bears witness to one of the most constant and plentiful back-and-forth trade flows in the world.

Companies on each side of the border must operate increasingly more complex supply chains to optimize their results while facing new challenges and obstacles for importing and exporting goods and, mainly, must also look to move goods efficiently and in time at lower costs while controlling and providing visibility for all the parties involved in the process.

Supply chain strategies and cross border logistics must respond to that quest for excellence because, should companies fail to prioritize cross border shipping, they would damage their relationships with customers in the other side of the border, resulting in a single order instead of multiple orders, or in cancelled or damaged orders.

The Challenges

Delays in border due to high fees, customs compliance, regulatory issues, incomplete or inaccurate paperwork, and wrong labelling are among the main challenges. Costs, either because they have increased or because they were not contemplated, also represent a factor with which we must deal.

In addition, keeping a visibility of the shipment in longer trips is also a challenge throughout the process.

Lastly, we must consider and address safety and the risk of losses and damage too.

The amount and relevance of these factors has increasingly resulted in companies searching for strategic partners for cross border transportation.

 The Requirements

 To operate in this zone, we must keep abreast of Mexican customs agents’ requisites:

 Unlike the USA, Mexico does not allow licensed foreign importers. Mexico’s regulations make it clear that importers must be a legally incorporated Mexican entity, registered as an active importer and verified by a specific Mexican broker, which must be authorized to ship on behalf of the importer.

When importing from within Mexico, a registered exporter must hire a Mexican broker to ship through Mexican customs. The registered importer also employs the services of an American customs agent for shipping over the USA border. The Mexican broker provides the transference over the bridge – across the border – and coordinates the entry into the USA with an American customs broker.

Before engaging in a cross-border shipment between the USA and Mexico, we must negotiate the fees and consider that there is so much more traffic going south than north. This traffic pattern usually complicates the capacity heading south during several seasons in the year: meanwhile, freighters heading north will usually find discounted rates.

The Restrictions

Mexico’s laws restrict American tractors from entering the national territory beyond the 16-mile marker. The United States of America enforces similar rules. Therefore, there are times when it makes more sense to transfer cargoes before shipping them in either direction.

This restriction does not affect intermodal freighters since this rule does not apply to intermodal containers moving over railroad. This means that the shipment does not stop at any of the borders to be unloaded and loaded back up.

The Partners

 In this scenario of multiple challenges and restrictions, the suppliers of logistics services become players offering terrific value to companies; therefore, over half of the latter use the former to simplify the process.

It all comes to down to becoming experts in analyzing and choosing the available options in terms of costs, traffic, communication, and transparence.

Furthermore, companies can use these services to make cross-border shipment requisites into a freight solution managed to completely gather all the communications in a single resource.

 Therefore, Solistica has focused on the Mexico – USA border; specifically in the liquor and packaging industries and in destinations crossing through Laredo, TX, proactively looking for synergies and imports. (Southbound).

 With our new Cross Border strategy, we are embracing our vision of becoming the region’s preferred 3PL partner, offering innovative solutions, the most advanced technologies, and an approach centered on customers.

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