5 Tips to Ensure Success in US-Mexico Cross-Border Freight

Trucks transporting cargo on highway

Whether you are just getting started in the freight-forwarding world or you are a seasoned professional with years of experience under your belt, there’ll always be some challenges when shipping cargo between Mexico and the US. Though neighbors, these two countries have considerably different cultures, markets and legal frameworks, which together represents a world of complexities and roadblocks waiting to happen. Thus, working with an expert that knows and understands both markets will become critical for operational success. Here are the five things we recommend that you always keep in mind before a shipment:

1. Choosing the right partners

Cross-border operations are hardly a one-man show. In fact, they involve several actors and moving pieces that work together to get goods safely from one point to another. Therefore, success, in great measure, will depend on choosing the right partners for your specific needs. 

Define the best supply chain model for your company

To do so, ask yourself the following questions: which mode of transportation will you use? What are your lead times? Will you require expedited or regular shipping? Is transloading ok, or does your shipment need to be direct? After this is settled, you’ll have a clearer idea of the things you will need from your partners. 

Search for regional expertise

Cross-border is a very specific part of the logistics industry, so we recommend finding a partner that has shown expertise and success providing this type of service. If you want to minimize risks you might prefer a more consultative partner to guide you through the entire process.

Strive for added value

There are a lot of options out there, so make sure the partners you are choosing bring something extra to the table. Think about what could help better manage your process and keep all your stakeholders on the same page. Technological developments are giving shippers and carriers more control over their supply chain with more accurate and proactive information, visibility, document digitization and centralization, etc.

2. Timing is Everything

Timing is essential when it comes to shipping across borders. You can think of the process as a synchronized dance with many players that need to perfectly align for the shipment to go smoothly. Though some aspects may always be out of your control, it is important that you do your research and understand the timeframes for each step of the process.

The border process takes time

How much, will vary based on demand, which in turn goes up or down depending on the time of year, week of the month, day of the week and even hours of operation. If there is not a lot of movement on the bridge, the crossing can take 30 mins, but it is not uncommon to encounter lines of up to 10 hours to cross during peak season. This is for a truck crossing without customs inspection; If inspected, the process can take an additional 8 hours.

Keep solid communication with your suppliers

A lot of things can happen during a cross border operation. Therefore, open and honest lines of communication with all stakeholders are key to ensure that things run smoothly, and that any unexpected hiccups can be addressed effectively. Providing spaces for feedback will also help everyone involved to improve their services in a way that will benefit the partnership moving forward.

3. Counting pennies

Everyone is looking to lower their costs, and logistics is usually a big part of the “expenses pie” for organizations. However, try to make sure that you are not spending dollars to save some pennies. Specifically, check that your forwarder is worth the price cut. Some companies will offer you an amazingly affordable rate, but they may also leave you without full service. Consider things like drayage, customs clearance, additional warehousing, sorting and labeling, etc.

In logistics, capacity is the name of the game, and the most expensive trailer out there is the one that you don’t load. Don’t rush to any decisions based solely on price. Before signing any deal with a forwarding company, do your research. If it sounds too good to be true, then it probably is.

4. Insurance for Peace of Mind

Shipping your goods long-distance and through international borders takes a lot more than just time. There are many risks associated with cross-border shipping, from natural disasters to cargo theft and accidents. A lot of these things will be out of your control, therefore getting proper insurance for your cargo before shipping is the best way to spare your company of substantial losses. Make sure you understand all the insurance options available and the policies they cover. Don’t skimp on research when choosing a provider, confirm there are no special provisions that would opt them out of covering your products, and don’t forget to read the fine print.

A key consideration when it comes to insurance are the differences between carrier insurance in Mexico and in the US. When it comes to insurance in the US, the DOT requires carriers to cover for at least 100,000 USD, while in Mexico the terms are considerably different. Carriers are only responsible for 15 Mexican minimum wages per loaded ton, which translates to around 1,250 USD for a 20 ton trailer.

5. All that legal stuff

Cross-border means having more legal barriers to sort, as there will be two different legal entities looking over your cargo. Therefore, before any shipment, make sure to understand what documents are required at every step of the way. You can have a partner help you sort this out, but it is still important that they give you full visibility. Crossing customs will be the most challenging aspect in this regard, so keep in mind the following pitfalls to avoid:

  • Be ready to pay for taxes, as these will depend on the tariff fraction for each material shipped (which, in some cases, may even be exempt)
  • Be sure the importer can legally enter the cargo into the inbound country
  • Ensure your cargo is legal on both sides of the border
  • Keep updated on regulatory norms for import/export: for example, cargo must be labeled and loaded in a specific way

Failure to comply with requirements will represent very costly mistakes for the organizations, as in most cases, you will either have to pay for a redo or spend a pretty penny on hefty government penalties and fines.

Cross-border shipping can be a daunting process, but you don’t have to do it alone. At Nuvocargo we are committed to making your life easier and your operations more efficient.

Schedule a demo today and discover the Nuvocargo experience.

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