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U.S./Mexico Shipping Series Part 4: Preparedness for Cross-Border Shipping

U.S./Mexico Shipping Series Part 4: Preparedness for Cross-Border Shipping | Transportfolio

US-Mexico-Cross-Border

At the most basic level, a supply chain is a series of links all connected with one another. A supply chain that crosses the United States and Mexico border tends to have more links than those that exist in domestic shipping.

Those extra links—whether it is additional governments, transportation, warehousing, or customs brokerage providers—mean that more can go wrong, too. Establishing modal, routing, and customs alternatives can help mitigate potential disruptions. Let’s take a deeper look:

Start with a sufficiently deep book of carriers
In any supply chain, there’s a sweet spot for carrier relationships. Too many become difficult to manage, and too few may leave capacity or flexibility gaps—unless you’re working with an experienced third party logistics provider.

Shipping across the border tends to require additional carrier relationships. After all, cross-border shipping regulations create the need for three carriers on many loads that cross the border.

No matter how many carriers are right for your particular situation, those that can offer multimodal service, various equipment types, and cover multiple routes add more value. Not only do they provide necessary capacity, their flexibility can help prepare for and protect against potential disruptions.

Utilize those carriers across a variety of routes
As U.S./Mexico trade is highly concentrated on a few highways and rail lines in Mexico, route diversity and flexibility is an important part of a cross border preparedness plan. Even some of the largest carriers in Mexico are unable to quickly switch routes to cross the border in Tecate rather than Tijuana or make a last minute change to pass through Eagle Pass instead of Laredo.

It’s common for only one railroad company to serve even major routes in Mexico. If that railroad’s rates go up or it’s temporarily out of service for one reason or another, what’s the backup plan? If bad weather impacts a portion of the highway between Laredo and Monterrey, is your supply chain going to be delayed until it’s open again? Or are your carriers prepared to immediately use an alternate route?

Take it one step further with a customs backup
Properly planning alternatives into the transportation aspect of your supply chain can make a big difference, but not if your product gets stopped at the border by a customs issue.

Mexico’s government keeps strict control on customs broker licenses. Each of Mexico’s approximately 800 customs brokerage licenses can only support four ports. Don’t assume your current provider can operate at the port you may need in a disruption. Many of the smaller ports will have fewer customs broker options—adding risk for shippers who rely on those locations.

Setting up a new customs broker can easily take days—something you may not have if your supply chain has already been disrupted.

There’s a difference between redundancy and preparedness
Finding the balance between redundancy and preparedness can be a challenge—especially for businesses operating in both Mexico and the United States. Putting a contingency plan into place and practicing it regularly can help find that fine line.

However, if your internal expertise is struggling to manage the number of carriers you require or you don’t have the relationships to find backup customs brokers, consider finding a door-to-door service provider with a large portfolio of modal, routing, and provider options.

Be sure to look for my next post in this Mexico shipping series, which will suggest criteria to use when selecting a customs broker. And if you’d like to know more about planning for supply chain disruptions, read our white paper, Add Resilience to Supply Chains.

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