Increase in Cross-border Movements
- U.S.-based companies are increasing cross-border transport to shorten supply chains.
- Driven by over-reliance on Far East manufacturing exposed during the pandemic.
North American Trade
- The volume of cross-border freight among the U.S., Canada, and Mexico is at an all-time high.
- Mexico became the U.S.'s largest trading partner, surpassing China for the first time in 20 years.
- Mexico imported $475.6 billion of goods into the U.S.
- Chinese imports fell to $427.2 billion.
Freight Movement Statistics
- Over 320,000 cross-border freight movements between the U.S., Canada, and Mexico last year.
- 20,900 monthly cross-border freight movements between the U.S. and Mexico.
- 6,000 monthly cross-border freight movements between the U.S. and Canada.
Trade Values
- Trade between the U.S. and Mexico hit $60.4 billion by value last December.
- Down 0.9% from the same month in 2022.
- 8.2% behind November 2023.
Challenges and Advice
- The main challenge is the historical trade imbalance between the U.S. and Mexico.
- Three trailer loads northbound to the U.S. for every one southbound into Mexico.
- Shippers should plan early, understand Customs procedures, and find reliable partners.
- Mexico’s new Complemento Carta Porte (CCP) requirements add compliance complexity.
Reshoring Initiatives
- Companies are moving manufacturing closer to the U.S. to future-proof supply chains.
- Example: Columbia Sportswear shifted operations from Asia to Guatemala.
- The USMCA agreement allows duty-free exports from Mexican and Central American factories to the U.S.
Freight Strategies
- Ryder System opened a new warehouse in Laredo, Texas, to manage increased cross-border freight.
- Manages 250,000 freight movements annually across the Mexican border.
- New 228,000-square-foot warehouse near the World Trade Bridge.
ProTrans Operations
- Uses its own trucks for seamless cross-border shipping without transfers.
- Team drivers with proper visas ensure smooth cross-border operations.
Rail Options
- New rail services to handle growing cross-border freight.
- Union Pacific introduced Falcon Premium cross-border intermodal service and another service linking Mexico and the U.S. Southeast.
- Collaborations with GrupoMexico, Norfolk Southern, CSX, and Florida East Coast Railway.
Future Outlook
- Nearshoring and domestic manufacturing are expected to grow.
- Auto manufacturers and apparel manufacturers are building factories in northern Mexico.
- Supply chains recovering from pandemic-era disruptions.
Additional Insights
- Estes Express Lines expanded terminal capacity for cross-border shipments into Canada.
- Invested $285 million in property and lease purchases from Yellow Corp.
- Shippers are advised to thoroughly understand the steps between origin and destination.
- Need reliable carrier partners, Customs brokers, and drayage partners for final delivery in Mexico.