Cross-border shippers faced unprecedented disruption in 2020, and it’s predicted to continue throughout 2021. As the United States ramps up supply chains and shippers adjust to the U.S.-Mexico-Canada Agreement (USMCA), shippers will face an extremely volatile cross-border freight market, making it difficult to control costs, procure capacity, and ensure that shipments arrive on time.
To overcome capacity challenges and a volatile cross-border market, shippers will need to partner with a third-party logistics provider with a physical presence in Mexico. Benefits of such a relationship include:
Virtually unlimited capacity. Whether the need is for temperature-controlled, high-value, high-risk or flatbed capacity, it’s essential to work with a 3PL that can procure adequate multimodal capacity to meet the shipper’s cross-border needs.
When evaluating a 3PL partner, look for one that utilizes only carriers certified under the Customs-Trade Partnership Against Terrorism (C-TPAT), and can offer direct shipments to and from Mexico. Additionally, during an unprecedented capacity crunch, cross-docking capabilities can alleviate capacity constraints and return empty trucks faster than a direct shipment. Make sure that the 3PL partner can source cross-docks and protect the organization from potential delays.
End-to-end visibility and real-time analytics. The COVID-19 crisis demonstrates the need for resilience and accurate, real-time information. To achieve this, shippers should seek out a 3PL partner that can provide real-time tracking and tracing of shipments via a cloud-based transportation management system (TMS). Additionally, shippers should ensure that the TMS offers real-time data analytics that can help them make better-informed decisions, and mitigate the cost of supply-chain disruptions.
Tailored supply-chain solutions. As risk mitigation grows in importance, shippers serving Mexico are partnering with 3PLs for customized supply-chain services that allow for near-shoring as a means of diversifying the supplier base, and ensuring the availability of contingency sources of key products, parts, and components. Near-shoring in Mexico offers many shippers a cost-effective strategy to gain control of supply chains and expedite transportation into the U.S.
It’s essential that the chosen 3PL offer customized supply-chain services that can meet the shipper’s specific needs and streamline its logistics operations.
This year will be a challenging one for cross-border shippers. Freight demand will continue to increase in 2021 due to the interest in near-shoring supply chains to Mexico, the impact of the USMCA on international trade policies, continued strong consumer demand, and production ramp-ups as the U.S. recovers from COVID-19. Rising demand will continue to impact cross-border shippers' capacity, and make it difficult to control costs.
David Henry is regional manager, Mexico, at GlobalTranz.
