Moving goods across borders requires knowledge, flexibility and security. In North America, many companies have expanded or plan to expand their business operations throughout the continent. With cross border operations, there is an opportunity to reach new markets and increase profitability. According to the US Census, Canada is America’s largest trading partner and Mexico is America’s 3rd largest trading partner.
When shipping from the US to Mexico, by law, carriers in the US are required to carry cargo insurance, but Mexican carriers do not have the same requirement. US carriers must pick-up and deliver on US soil and Mexican carriers must pick-up and deliver on Mexican soil. Mexican and US carriers are allowed to haul freight within approximately 26 km on either side of the border.
What shippers need for cross border shipping:
- Capacity: Because of an imbalance of trade between countries, there is a capacity shortage.
- Security: Cargo security can be a concern in over-the-road transport. Mexico is among the three countries most at risk for cargo theft. Attention to paperwork and knowledge of procedure is extremely important.
- Collaboration: Partnerships between shippers and 3PLs help shippers overcome challenges with technology, capacity and knowledge.
- Flexibility: Supply chain disruptions affect cross border shipping. Work with a 3PL that supplies visibility and risk mitigation plans.
- Consolidation: Strategically ship freight based on shipper and receiver needs.
Benefits for shippers:
- Lower freight charges
- Eliminated demurrage
- Delivery and receipt of freight
- Reduced inventory costs
Shipping freight across national borders is complicated. Shippers must develop an efficient strategy that will increase trade volume without sacrificing shipping costs or flexibility. There are 2 methods of cross border truckload transportation -- transloading and direct service. Customs requirements for the US and Mexico are the same for transloading and direct service shipping. A broker from both US Customs and Mexico Customs must be involved in either transportation process.
Transloading: When freight is transferred from one trailer or container to another trailer or container at a warehouse or terminal before crossing the international border. It then moves to its final destination across the border.
Direct Service: When freight crosses another country’s border on the same trailer or container from origin to destination.
If shipping out-of-country seems intimidating, enlist the help of a third party logistics provider. Outsourcing cross border transportation services is a cost-effective way to find new customers and grow your business. And, with the help of a 3PL, you have a knowledgeable resource to help overcome cross border shipping challenges like language, customs requirements and labor laws.
Have you benefited from cross border shipping? Leave us a comment below.
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