Mexico Shipping Update: Week of November 9

The Mexico shipping market remains challenging as the tightened capacity and extended hours of inspection at the border continue to press shippers to seek out supply chain solutions to cope with the market's drastic ebbs and flows.

In our most recent Mexico shipping update, Redwood Mexico's Managing Director, Jordan Dewart, and Senior Vice President of Business Development, Olga Salinas, outline the recent trends impacting cross-border operations.

Mexico shipping update as of 11/6/2020

We are headed into the 2020 home stretch, with the fourth quarter being crucial to closing the year strong. Our commitment is to keep you informed regarding current market conditions, capacity trends, and potential disruptions in the cross-border supply chain that can impact the flow of your business.

The Mexico transportation market conditions remain extremely challenging, with northbound freight volumes higher than expected and capacity constraints still at the top of shippers’ concerns. We have witnessed an increase in demand on southbound shipments driven by a strong retail quarter due to the holiday season as well as higher volumes of raw material and component part replenishments for the manufacturing industry.

During the past weeks, we have experienced longer than usual border crossing times at the World Trade Bridge at Laredo, TX, caused by several factors: Mexican Customs’ system being down a few hours, increased emphasis on trailer inspections by US Customs, and an overall increase in freight volume. Border crossing times have doubled on average from four hours to eight hours or more on a given day. Commercial traffic lines to cross the border are at times in excess of six miles. Delays on the border crossing time are expected throughout this last quarter of the year.

The extended inspection times along with the tightening of the Domestic US market and decreased driver availability has resulted in premium shipping costs for cross border shipments moving both directions as well as longer lead times for door to door shipments.

We anticipate these market conditions to remain the same through the end of the year. With this in mind, we encourage you to consider the following tactics in order to mitigate any potential impact to your cross-border supply chain:

1. Plan for repositioning costs for deadheading empty equipment from the border or other regions in Mexico in order to secure equipment.
2. Plan for increased lead times – 3-5 days of additional transit time.
3. Advanced load planning and requesting equipment as far in advance as possible. Ideally weekly load planning. This allows for timely equipment sourcing and planning.
4. When possible, consider transloading at the border allowing you to connect with a wider carrier network on the US side. Direct US equipment for cross border operations, in both directions, will come at a high premium with low equipment availability.

Although market conditions are tough, we want to reassure you that you are in good hands as our Redwood Mexico Senior Management Team has a wealth of experience handling Mexico peak season capacity constraints and providing compelling capacity solutions.

We appreciate your business and look forward to strengthening our partnership as we support you through the remainder of 2020.

~Jordan Dewart, Managing Director, Redwood Mexico

~Olga Salinas, SVP, Business Development, Redwood Mexico

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Drop us a line to get in contact with a Redwood Mexico logistics specialist to learn how our cross-border team can help you navigate the challenging Mexico shipping landscape.