Without risk, there is no reward. While this notion might work in the military as a strategic plan, it usually isn't ideal when it comes to cross border shipping. Or really any kind of shipping for that matter.
Every year, the trade between the United States and Mexico approaches $700 billion worth of goods. Both of these nations depend on each other for commodities ranging from natural gas and oil to perishable items such as food and medications. Needless to say, the two countries have a rather strong trade agreement.
However, shipping into Mexico still comes with a fair amount of risk. Whether it is lengthy, complicated paperwork or unusually long transit times, cross border shipping can be a tricky and risky process for those who are not accustomed to it. All shippers should be aware of these risks and complications before sending their freight south of the border.
In this blog post, we will take a look at a few of the most common risks associated with shipping freight into Mexico, including:
- Paperwork delays
- Longer transit times
- Security threats
- Insurance questions
We will also outline a few reasons why most companies choose to work with 3PL companies to help them handle all the complexities of cross border shipping.
The Facts About Cross Border Shipping Into Mexico
Earlier this year, the United States, Mexico, and Canada entered into a new verbal and written agreement. The goal of the agreement is to change the way that tariffs are charged between the three countries. While this new treaty has not yet been ratified, it is opening the door of discussion about how the new regulations will impact cross border shipping. The main gist of this new agreement is focused on the movement of food. However, while the agreement sounds great in theory, there still are too many questions about how this new trade agreement will work in practice.
While those talks continue to take place, the rest of the shipping world carries on as usual. And for those shippers who still need to handle business and get freight across the border, there are a few risks and hurdles to be aware of.
The current hurdles with shipping freight to Mexico may seem a bit impossible at times:
- Extra paperwork
- Longer shipping timelines
- Various security threats
It can all be a little too much for a lot of shippers to handle on their own. But the good news is that with just a little proactivity, planning, and basic knowledge, the process can actually be a pretty smooth one.
Let's take a quick peek at some of the most prevalent issues shippers may face...
Paperwork Delays
In order to move freight into Mexico, shippers must fill out multiple, often redundant documents. Nowadays, these cross-border documents are transmitted electronically and must be attached to the freight at all times. The problem with most cross-border shipments into Mexico is that this paperwork often gets misplaced, or the shipper is not aware of the exact procedures that must be followed for documents to be received by the Mexican port authorities.
All this paperwork must include details such as:
- Shipper's information
- Declaration of goods
- A detailed bill of lading
- Customs declarations
- Accurate contact information for the recipient
If any part of this paperwork left blank or filled out incorrectly, the carrier will likely be delayed at the border. For those shipping food products, this can lead to spoilage and significant financial loss.
Longer Transit Time
Another leading hurdle that shippers sending freight into Mexico must deal with, is the length of transit time.
While the United States has the luxury of efficiently built highway transportation networks, most of Mexico is not as fortunate. In fact, the highway system south of the border rarely exceeds two lanes of traffic. This results in slower transit times, more traffic, and in many instances the delay of transportation due to inspections.
To deal with this issue, shippers must proactively plan their shipment route to avoid delays as much as possible. Of course, this doesn't account for things such as weather delays, so your mileage may vary.
Security Threats
Shipping products into Mexico also tends to pose a few significant security threats.
It's the elephant in the room that most carriers don't like to talk about. However, it is a reality that all international shippers deal with daily. In most situations, security threats occur outside of major metropolitan cities. These more rural areas have a much lower presence of law enforcement.
It is important to realize that these threats exist. And in order to deal with them, a shipper must understand the risk involved and plan accordingly. Every situation is different, so when it comes to security threats, it is simply something that must be played by ear most of the time.
Damage and Questions About Insurance for Cross Border Shipping
Arguably, the most commonly asked question about cross border shipping into Mexico has to do with insurance coverage.
When you move cargo between the United States and Mexico, it is considered an international freight shipment. This is governed by international laws of Commerce, not by individual laws of the United States. Nor is it in the hands of the Mexican government.
Sadly, because of this, most carriers maintain limited cargo liability protection.
It is also important to understand that it is illegal for shippers to contract with international insurance companies. Of course, insurance companies in Mexico are exempt from this. And since it is not possible for United States-based insurance to work for Mexican shipments, it's important to understand what practical options you have available.
Final Thoughts
Moving freight into Mexico is a daily task that is completed by thousands of shippers every day.
The key to reducing mistakes and hurdles associated with Mexican cross border shipping is by working with proven experts. You need partners who understand all regulations, rules, and laws governing the movement of freight from United States into Mexico. Sure, a company can do it all on their own. But trust us, it can indeed be a bit confusing at first.
If you have the means to partner with a Modern 4PL like Redwood, why not?
If you have questions about moving freight through Mexico, it would be a good idea to consult with experts who understand cross-border complexities—like Redwood's Modern 4PL approach. For those who would like to learn more, contact the team at Redwood Logistics today and let us help you move your freight across the border efficiently!