Mexico’s cross-border freight and trade are undergoing significant challenges as the nation gears up for changes by 2025. Sunset Transportation, a leading logistics provider, emphasizes the necessity for shippers to prepare for disruptions and adapt to new regulations. A strategy focusing on risk mitigation, high-touch customer service, and implementation of effective technology and processes is imperative for optimizing cross-border operations.
According to Gartner, exports from Mexico to the U.S. and Canada have doubled since 2019, driven by the increase in nearshoring, which seeks to reduce supply chain risks by relocating production nearer to the final market. The firm projects Mexico’s exports to the U.S. will grow by another 34% over the next five years, demonstrating the urgent need for effective cross-border logistics.
Lindsey Graves, CEO of Sunset Transportation, points out the pressing need for businesses to partner with logistics experts who understand both local and global regulations. "Partnering with the right company whose people know local and global regulations, as well as the impact of taxes on all sectors of the supply chain, is key to cross-border freight optimization, efficiency, and revenue growth," Graves said.
Recent developments, including new tariffs imposed by the Mexican government on textiles and apparel—15% and 35%, respectively—and increased fees on goods imported from China, add layers of complexity to cross-border logistics. "With so many variables... the right cross-border operations partner must understand the corresponding impact on every node of the supply chain," Graves added. This knowledge is necessary to effectively navigate changes affecting costs and compliance.
Logistics experts warn of the unique challenges posed by the differing regulations across borders. Jose Minarro, Managing Director of Cross-Border Operations at Sunset Transportation, detailed some of these hurdles. "Cross-border logistics between the U.S. and Mexico involves... complex factors like differing currencies—U.S. dollars on one side and Pesos on the other—and measurement units, with miles in the U.S. and kilometers in Mexico." Understanding these nuances is fundamental for optimizing the logistics process.
Minarro highlights the importance of employing optimized transportation management systems (TMS) to streamline the entire operation, ensuring goods move smoothly from origin to destination. "Sunset’s TMS seamlessly integrates these elements, ensuring efficient and streamlined operations across both sides of the border," he noted.
Efficient cross-border distribution strategies will require shippers to evaluate shipment volumes critically and maintain secure transport across various locations. This differentiation will rely on established operating processes, sound warehousing, and thorough capacity management.
To bolster the anticipated growth, businesses must also analyze their distribution networks proactively. The necessity for updated strategies extending beyond traditional methods is clear. The roads to efficiency may be challenging, but the opportunities, especially amid increasing export demands, are promising.
Mexico’s adaptation to changing global trade dynamics hits close to home as well. The country's recent decision to accept non-Mexican deportees from the U.S., previously resisted by President Claudia Sheinbaum, reflects broader shifts impacting border operations and policies. Handling immigration and trade transparently remains pivotal for operational clarity.
Sheinbaum revealed, "Mexico had accepted over 4,000 deportees, of which a 'large majority' were Mexican," acknowledging the country’s historical role as both destination and passage for migrants. The fluid dynamics between national policy and immigrant shifts reflect the complexity of maintaining efficient operations amid constant change.
The intersection of immigration and logistics cannot be overlooked, as new trade and immigration policies will shape the way Mexico and the U.S. navigate their borders. Together, these factors add weight to the urgency of establishing effective cross-border strategies.
With the deadline of 2025 looming, companies must stay informed and adaptable, ensuring logistics operations thrive amid changing regulations and market demands. Cross-border collaboration will play integral roles as businesses prepare for this new reality, highlighting the pressing need for efficient systems and regulatory knowledge.