Last week we covered the overall customs process which is critical to ensure that Mexican cross-border shipments are processed properly. If you are shipping cross border I strongly suggest you hire a tenured customs broker with Mexico experience as we shared last week. There is $1 Billion USD worth of goods shipping daily across the Mexico border and this number is expected to grow. Of the $1 billion worth of goods, 70% will move by truck across the Mexican border, any given day the freight index is 1 shipment going to MX versus 12 coming back per day.
This week we will look at OTR (Over the Road) shipping to and from Mexico. There are considerable differences and challenges versus shipping cross-border from the USA to Canada back and forth. One significant difference is a Canadian driver can cross into the USA and a US driver can cross into Canada driving their own tractor. The drivers with a legal passport can cross the border (interstate & provincial rules apply), major rule a Canadian registered driver cannot run interstate shipments, US driver cannot run provincial freight.
General rule, a Mexico shipment requires a Mexican National driver to manage/drive the shipments inside Mexico. US or Canadian carriers that have terminals and hire Mexican drivers can provide continuous service which is the exception. This is the reason a considerable amount of freight is transloaded or trailer exchanged at terminals on the US side of the border. The Mexican carrier brings the freight to a transloading facility in the US, the freight is moved from the Mexican trailer to the US/CDN transport companies’ trailer. Paperwork is provided and the shipment continues to the final consignee.
Shipments that cannot be transloaded are handled in 2 ways. The most common is the US/CDN carrier will bring their trailer to a secure yard in the US. The Mexican shunter/driver will pick up the empty trailer and paperwork. They will take the trailer to be loaded directly in Mexico, once completed the customs docs will be added to the paperwork package and the Mexican shunter will bring it back to the yard in the US and US/CDN carrier will take possession of their trailer and paperwork.
The direct option requires carriers from the US & Canada to have established Mexican authorities, and hire Mexican nationals. This allows them to move their own trailers, this is referred to as direct or continuous shipping as the freight stays in the same trailer throughout the process.
Southbound vs. Northbound Trucking Process
- Southbound cross-border trucking shipments must first complete a three-step process before crossing the border. First, import documents must be submitted to Mexican customs. Second, payment must be submitted for all duties. Third, these payments must be verified by a Mexican bank.
- Then, the truck is free to cross the border and immediately undergo primary inspection. Occasionally, a truck is selected at random for a secondary inspection. But typically, the less-involved first inspection is all that is required.
- After clearing inspections, customs officials verify all necessary paperwork. Then the truck may proceed past the 21-kilometer “border zone” if needed.
- The northbound border crossing is only slightly different. Prior to approaching the US border, export documents must be submitted and verified by the Mexican exporter. Commercial and cargo data must be submitted through ABI (the Automated Broker Interface).
- After this, the truck proceeds north of the border and is subject to primary inspection, which usually includes K-9 checks, and on occasion, a more detailed secondary inspection is called for. There are sometimes special programs that allow pre-approved shipments to pass through inspections at a much faster rate than typical. During the inspection phase, customs officials verify all compliance issues for both the driver and shipment.
Cost and challenges when shipping cross-border to and from Mexico are considerably higher than shipping cross-border to Canada and the USA.
Manufacturers and shippers have to factor in additional costs as per the list below:
- Border delays for tariffs, compliance issues, incomplete paperwork- Reason you need an experienced customs partner.
- Risk of Loss and damage- the risk of theft is very high in Mexico- they have a portal for Hijacked Trucks and shipments.
- Unplanned costs, and compromised security - security is one new shippers do not consider.
The real # shared by the Chamber of Trucking in Mexico is 50 per day. Over the last 5 years, there have been 85,000 truck high jackings. There were 7,862 violent high jackings in 2023 which was up 3% from 2022, security is a real issue and challenge when shipping cross-border to and from Mexico.
Shippers that have worked with Mexico have experienced customs brokers, experienced transportation brokers, or carriers to manage the process. Experienced transportation suppliers provide value as they understand the processes, and risks involved to advise shippers properly. They have the teams in place to manage and execute the process.
Thanks for reading
