COVID-19, the United States-Mexico-Canada Agreement (USMCA), and China Plus One strategy all have contributed to the nearshoring movement, which has put a spotlight on cross-border logistics.
“Against a backdrop of transportation bottlenecks, geopolitical tensions, and ambitious sustainability targets, the logistical shocks from COVID-19 made businesses rethink their global supply chains,” Savills said.
Meanwhile, the USMCA “has made it financially worthwhile to move manufacturing locations closer to home,” a Logistics Management article said. “That’s because under USMCA, clothing now manufactured in Mexican and Central American factories can be exported to the U.S. duty-free — just as if the raw materials were produced at American mills. This liberalization of what can be exported to this country duty-free has boosted the reshoring boom.”
China Plus One also has contributed to the boom. Its strategy is simple: Set up manufacturing operations in another country besides China.
“Mexico presents a unique bridge to the Americas and offers a lucrative value proposition for companies seeking to diversify their production bases,” Supply & Demand Chain Executive said. “Its proximity to the U.S. market translates to lower distribution costs and streamlined logistics compared to Pacific Ocean routes. Mexican manufacturers have also made significant strides in enhancing their electronics and [printed circuit board assembly] manufacturing capabilities, offering high-volume production capacity. And finally, the cultural and linguistic proximity of Mexico provides a familiar and accessible environment for U.S. companies seeking to establish new production partnerships.”
Aside from manufactured goods, more than 88% of Mexico’s horticultural exports are shipped to the United States, according to the U.S. Department of Agriculture’s Economic Research Service.
“By 2021, Mexico supplied almost two-thirds of U.S. vegetable imports and about half of U.S. fruit and tree nut imports,” it said.
Whatever the product, U.S. shippers importing from (or exporting to) Mexico and Canada rely on skilled cross-border logistics companies to efficiently move those goods.
“Executing a cross-border operation requires complex technological integration to ensure seamless oversight and control of the entire supply chain process,” an Inbound Logistics article said, pointing out that it also requires “an in-depth knowledge of the relevant regulations and documentation requirements to minimize the risk that shipments are held up by the authorities.”
Logistics Management advised shippers to “study the fine print, don’t wait on Customs paperwork, get all details locked in early, and find reliable carrier partners south of the border. And if you think bureaucracy is tough in the United States, working with the Mexican government may introduce a few more headaches.”
Logistics Management declared that “nearshoring is having its moment. Specifically, auto manufacturers and apparel manufacturers have chosen to build factories in northern Mexico to take advantage of proximity to U.S. markets and shorten their supply chains.”
In fact, auto and truck manufacturers Volvo, Toyota, Honda, Maza, Hyundai, Volkswagen, BMW, GM, and Stellantis all have invested in Mexico this year.
In 2023, Mexico surpassed China to become the United States’ top trading partner, according to Logistics Management, which cited Census Bureau data that said Mexico exported $475.6 billion worth of goods to the U.S. last year. Meanwhile, Chinese exports to the U.S. dropped 20% in 2023 to $427.2 billion.
“The numbers help to tell the story,” it said. “There were more than 320,000 cross-border freight movements between the U.S., Canada, and Mexico last year; there were approximately 20,900 monthly cross-border freight movements between the U.S. and Mexico; and there were an additional 6,000 monthly cross-border freight movements between the U.S. and Canada last year.”
The top exports from Canada to the United States include crude oil, cars, petroleum gases, gold, and wood. In 2023, Canada exported 78% of its goods to — and imported almost half of its goods from — the United States.
Moving all those goods, from cars to wood, requires expertise in cross-border logistics.
Experts in cross-border logistics are able to efficiently overcome those challenges specific to shipping to other countries.
Logistics providers must ensure carriers are armed with all documentation needed to cross borders with freight. Having incomplete paperwork will halt the freight’s progress. Customs guards will stop shipments until the paperwork is completed and reviewed.
Cross-border trade execution also requires a thorough understanding of customs regulations, including tariff classification and valuation and the determination of duty rates.
That knowledge includes adoption of and adherence to ever-changing regulations — and nearly constant innovation and modernization.
“In an era defined by rapid technological advancements and global connectivity, the landscape of international trade is undergoing a profound transformation,” the International Trade Council (ITC) said. “At the heart of this evolution lies the imperative to modernize customs procedures, streamlining processes and enhancing efficiency to facilitate smoother trade flows across borders.”
FreightWaves said Mexico reported 5,140 cargo thefts in the first half of this year. That’s an average of about 57 thefts each day.
“While cargo theft in Canada hasn’t experienced dramatic trends like thefts in the U.S. and Mexico, 93% of Canada’s cargo thefts occurred in the province of Ontario. Cargo thefts were especially heavy in the greater Toronto area, which remains the riskiest area for cargo movements in Canada,” FreightWaves noted.
Carriers and logistics providers should utilize technology to enhance security and implement strict cargo-handling procedures. Safety measures also must include limiting access to freight to prevent smuggling attempts. In early August, for example, Customs and Border Protection (CBP) officers discovered more than 3,400 pounds of methamphetamine hidden in a shipment of lettuce coming from Mexico at the Pharr International Bridge in Texas.
Technological innovations, including advanced logistics software, real-time tracking systems, and automated customs platforms, have helped streamline cross-border shipping and made it more secure. One goal of advanced technology integration is increased visibility of cross-border shipments.
“In an era characterized by unprecedented volatility and uncertainty, supply chain visibility has emerged as a strategic imperative for businesses seeking to mitigate risks and enhance resilience,” the ITC said. “By leveraging advanced technologies and fostering collaboration across the supply chain ecosystem, companies can proactively identify, assess, and mitigate risks, thereby safeguarding against disruptions and driving sustainable growth.”
Cross-border logistics should not be trusted to providers without a proven track record. Shippers need logistics partners that collaborate with them on complicated cross-border movements and provide transparency from pickup to delivery.
“Effective collaboration and transparency across the supply chain are essential for identifying and proactively addressing issues, ensuring consistent quality, and maintaining business continuity when supply chain events occur,” Supply & Demand Chain Executive said.
Effective cross-border logistics companies adapt to changing business needs and scale operations accordingly. That requires listening to customers and responding 24/7/365.
Flexibility is particularly important when dealing with delays at U.S. ports of entry. Bottlenecks can be caused by any number of disruptions, from an inspection increase to CPB employee shortages to weather events.
Whether you’re importing to or exporting from Mexico or Canada, VCPB Transportation has you covered. We are experts in all aspects of complicated cross-border shipping and can ensure your goods are delivered where they need to be and when they need to be there.
We are renowned for our expertise in moving produce. We ensure imported fruits and vegetables are delivered in excellent condition every time. We know temperature control is a top priority, so we’ve adopted the latest technology to deliver produce in prime condition.
VCPB Transportation is the right partner for cross-border logistics. In fact, we’re the right partner for all your shipping needs, including expedited, over-the-road, intermodal, and overweight and oversized freight. We are dedicated to providing exceptional service and deep experience regardless of the move or mode.
With VCPB, you’re partnering with a team of experts with a deep understanding of the logistics industry. Our vast network, coupled with our expertise in all modes of shipping, ensures that your goods are in safe hands.