Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Laredo summit highlights critical trade issues around security, transportation; BSH Home Appliances launches $240M factory in Monterrey; $132M inland port planned for Celaya, Mexico; and Green Worldwide Shipping opens branch in South Texas.
Laredo summit highlights critical trade issues around security, transportation
LAREDO, Texas — Cross-border trade between Mexico and the U.S. is growing rapidly, but so are challenges affecting shippers, carriers and logistics professionals on both sides of the border.
To highlight opportunities and issues affecting the trade community, Reliance Partners hosted its 7th annual Modernization of Cross Border Trade event Tuesday in Laredo.
The gathering included panel discussions attended by over 300 guests, exploring topics such as the state of Mexican cargo insurance, issues affecting Mexican carriers, Mexico’s Carta Porte supplement, road infrastructure, driver shortages and cargo security.
“This is the largest cross-border event there is right now,” Mark Vickers, founder of the event and Reliance Partners executive vice president and head of international logistics, told FreightWaves in an interview. “It’s grown every year. It shows you that nearshoring is not just a thought, it’s real.”
Reliance Partners is one of the nation’s largest insurance agencies serving the trucking and logistics industries. The company offers Borderless Coverage, an automated, cross-border and Mexican cargo insurance solution for carriers, brokers and shippers.
“Companies like Schneider National, Coyote Logistics, some of the biggest companies in cross-border, started to use the product first. Everybody’s following their lead now, and it’s changing things for the better,” Vickers said.
The event included a Mexican carrier panel, featuring Victor Salazar, chief commercial officer at Trayecto; Rogelio F. Montemayor, commercial manager at Transporte Monro; Bernardo Rodarte, vice president and general manager for Mexico at Schneider National; and Matt Silver, co-founder and CEO of Cargado. The panel was moderated by Thom Albrecht, Reliance Partners CFO and chief revenue officer.
Salazar said nearshoring is causing an increase in automotive freight between Mexico and the U.S. and creating more opportunities for carriers.
“What we have seen in the automotive industry is that, due to the nearshoring, it is causing a fascinating role in that part of the business,” Salazar said.
Trayecto is the biggest freight transportation company in Mexico. Trayecto, based in Monterrey, Mexico, has more than 4,000 trucks and 10,000 trailers.
“We saw a lot of growth in the last 10 years in automotive,” Salazar said. “For us, being in the automotive industry is very interesting, because you have the opportunity to understand how the production process works from the different brands. You see the different challenges they face. It gives us opportunities to create an individual solution for everyone. Chances are that you will be very successful in that part, and also a profitable business, if you can create solutions.”
Silver said to succeed at cross-border trade, companies need to hire people with experience, as well as have a presence on the border.
“If you want to be able to actually scale your cross-border business, I think you need an operations leader that actually understands all the stuff going on at the border, can speak fluent Spanish, knows how to work with customs brokers, knows how the transfer process works, all that stuff. Then you need somebody at the border. You need a presence in Laredo.”
Related: Surging cross-border flows a boon for operators like DHL
A key concern for many cross-border operators is the Carta Porte Complement (CCP) — a digital tax document issued to shipments that is aimed at protecting the transfer of legitimate goods across Mexico.
The Mexican Tax Authority announced the creation of the electronic CCP bill-of-lading requirement in May 2021. The CCP is a collection of over 120 data elements, including everything from shipper and consignee information to the cargo and its value and carrier equipment.
Since April, carriers transporting goods within Mexico must file the CCP with each shipment or face fines or other sanctions, such as the confiscation of the merchandise.
Jose Minarro, managing director for 3PL Sunset Transportation’s operation in Laredo, said the CCP is adding more time and cost to the movement of cross-border shipments.
“I know a carrier that had to hire at least six people to do the Carta Porte paperwork, because that has to be done real time for the first and second shift,” Minarro said. “To support his 35 trucks, he had to go and get more admin people to file the Carta Porte for the two shifts. That’s a tremendous impact to their business, and their rates stay the same. How can you survive that?”
The Mexican government enacted the CCP partly to protect the legal transportation of goods within the country, reduce cargo theft and ensure Mexico is not missing out on taxes from unclassified shipments.
“It’s frustrating. Technology should be helping us. Shipping in Mexico should be as easy as shipping from Canada to the U.S., because Canada to the U.S., it is all automated,” Minarro said. “The Mexican government should focus on not only deploying technology for the sake of control, or better visibility for them, but to simplify the process, I think they’re missing that element in their deployment of technology. They should ask the trade community, ‘How can we help to make things easy?’“
BSH Home Appliances launches $240M factory in Monterrey
Munich-based BSH Home Appliances recently opened its first factory in Monterrey, Mexico, manufacturing refrigerators for U.S. and Canadian markets.
The company invested $240 million in the plant, which totals 4.6 million square feet and employs 1,500 workers. The appliances are produced under the Bosch and Thermador brands.
“The location in Mexico offers us the ideal conditions and framework for the production of innovative and high-performance refrigerators,” Matthias Metz, CEO of BSH, said in a news release.
BSH Hausgerate GmbH is the largest manufacturer of home appliances in the world, with 37 production factories in Europe, the U.S. and Asia.
$132M inland port planned for Celaya, Mexico
Mexican authorities recently announced plans for the Bajio Logistics Gateway, an intermodal inland port in central Mexico.
The project aims to reduce logistics costs, improve local and regional infrastructure, and generate jobs, according to a news release.
The $132 million Bajio Logistics Gateway will be located in the city of Celaya, in the central Mexican state of Guanajuato. The project is a partnership between Guanajuato and Celaya, along with Grupo Azvi, an infrastructure development firm.
Officials said the logistics gateway will offer storage and distribution services for industries such as metal mechanics, automotive, food and household appliances.
“It will include a cross-dock loading area that will allow partial processing of products for subsequent distribution by truck or shipments by rail,” said Ramon Alfaro Gomez, Guanajuato’s secretary for economic development.
Mexico’s Bajio region has become a hub for the global automotive industry. The region includes the states of Aguascalientes, Guanajuato, Queretaro and San Luis Potosi.
The project is near federal highways 45 and 57, industrial corridors, and the confluence of Ferromex and CPKC railroads lines.
Bajio Logistics Gateway is being developed on 500 acres. The first stage of the project will create a railway bypass near a Honda Motor Co. factory.
Green Worldwide Shipping opens branch in South Texas
Decatur, Georgia-based Green Worldwide Shipping recently opened an office in Laredo,Texas.
The company is a supply chain service provider offering services for ocean freight, airfreight and project cargo, along with customs brokerage, warehousing and distribution, and supply chain visibility solutions.
Green Worldwide Shipping also has offices in Dallas and Houston, and has 16 locations nationwide. The company was founded in 2008 and has about 200 employees.