With factories across Mexico getting back to full capacity in 2021, the cross-border freight market is already impacting truckload capacity, supply chains and trade strategy.
FreightWaves recently caught up with Frederick Ottosen and Roy Austin from The ILS Co. (International Logistic Solutions). Tucson, Arizona-based ILS is a 3PL offering freight solutions in the U.S. and Mexico.
Austin is the business development director for ILS, and Ottosen is the general sales manager for Mexico. Ottosen and Austin offered up their observations on several topics, including the 2021 outlook and what types of freight will dominate cross-border traffic.
FreightWaves: What is the outlook for 2021?
Ottosen: Challenges in 2021 for carriers include last-mile increased demand, 15% minimum wage increase, overregulation and cargo theft/violence. This will hit first the owner-operated carriers.
FreightWaves: What types of loads will do well in 2021 for cross-border freight? Cars? Auto parts? Electronics?
Ottosen: Freight demand will increase in auto parts and electronics.
Ford Motor Co. has started producing its Mustang Mach-E at its assembly plant in Cuautitlan, Mexico. Fiat Chrysler Automobiles will also be producing the new Dodge RAM 4000 in Saltillo, Mexico.
FreightWaves: Do you think the cross-border market will see more of an impact from USMCA rules changes during 2021? The expectations were that USMCA would increase annual U.S. exports to Canada and Mexico significantly.
Austin: A year of stabilizing freight volumes adjusted to the new normal, while companies continue to feel the impact of the ongoing pandemic. Demand for cross-border services keeps rising in consumer goods and auto parts.
Ottosen: I don’t see an impact on the U.S.-Mexico shipments due to USMCA. Since capacity will already be tight, in 2021 it will be strategic to tighten the relationship with carriers.
FreightWaves: What is the ILS strategy for 2021? What advice do you have for shippers/clients?
Austin: Our customers are preparing for a better year of production in 2021 and are bringing their logistics service providers closer with diminishing capacity looming.
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