Fleets Explained: Cross-border operations

Ports across the lower U.S. experience thousands of truckload crossings daily. Recent months have seen record cross-border freight activity, largely due to the effects of nearshoring. This uptick in northbound freight presents opportunities for fleets—and those opportunities are growing.

“The average daily northbound full truckload (crossing) in Laredo is 8,640,” and those crossings are projected to grow between 5 and 7% over the next five years, Jerry Maldonado, director of Laredo and Mexico operations at Warren Transport, said during a recent industry event.

“There’s more work coming; there’s more freight coming out of Mexico into the U.S.,” he said.

See also: Nearshoring: What does it mean for trucking?

The government is also working to accommodate this increase in border traffic. Texas will expand the Laredo World Trade Bridge from eight lanes to a total of 18 to decrease the wait time of northbound traffic. In addition, officials are seeking funding to expand another area bridge, Maldonado said. Other ports have also expanded or are in the development process.

How can fleets tap into these cross-border opportunities?

Maldonado joined three other industry experts on a panel at a recent industry event to discuss how trucking companies can become involved in cross-border freight movement. They discussed how freight can be moved across the border, the certifications and requirements for moving that freight, and partnership agreements with Mexican carriers.

Ways to move freight across the border

To tap into the freight opportunities that now prevalently exist at the border, it’s essential to learn the different ways freight is moved between the U.S. and Mexico.

Trucks can move freight across the border in three different ways, said Mark Vickers, Reliance Partners’ EVP and head of international. The most straightforward way is a through shipment. Freight can also be moved across the border with a transloaded shipment, which can be accomplished in two different ways.

With a through shipment, “cargo is loaded, say in Chicago, and it’s kept in that same box and moved in that same truck from Chicago all the way to Monterrey,” Vickers said in an example. “There is no movement of that cargo outside of the box.”

While a through ship is the most straightforward way to move freight across the border, Vickers said it’s also the most expensive way. Because of that, he and his team advise their customers to “get accustomed to the transloading process.”

Vickers used the same example of moving freight from Chicago to Monterrey to explain the process of transloading. The first way involves a U.S. carrier using a U.S. truck and trailer to carry a load from Chicago to the border. Once at the border, the trailer will then be moved to a U.S.-based border warehouse for inspection. After inspection, it’s moved across the border to a warehouse based in Mexico via a drayage partner. Finally, a Mexican carrier using a Mexican truck will then pull the U.S. carrier’s trailer to its final destination.

“At least five parties are going to touch that [load], so a lot can happen there,” Vickers said.

The other transloading process to move goods across the border is through a “true transloading” process, Vickers said. This is when the cargo is unloaded from the U.S. trailer at the border, placed in a warehouse, put onto a new trailer, and moved across the border to a warehouse in Mexico via drayage. Once there, it’s inspected again before being placed onto a Mexican trailer for a Mexican truck to take the load to its final destination, Vickers explained.

Cross-border documentation and certification 

To move freight across the border via through shipment or transloading, carriers must have a carte porte, which is essentially a bill of lading.

A carte porte “includes some detailed information about that shipment: what type of product it is, what route it might take, the vehicle that's used, and serves as an invoice for transportation,” said Jason Merck, a current TMS manager for Syfan Logistics with a background in cross-border operations between Mexico and Canada. A carte porte also provides information for Mexican tax collection as well as fraud mitigation. It is required for customs clearance.

Then there’s certification with the Customs-Trade Partnership Against Terrorism, which Matt Silver, founder and CEO of cross-border load board Cargado, said is “the main security protocol” that most trucking companies and shippers use to move freight from Mexico to the United States.

Companies that are CTPAT certified will have enhanced security: barbed wire fences, security guards, cameras, etc. Silver explained that individuals who wish to gain access to those facilities will have their identification checked and their fingerprints scanned.

“Most cross-border trucking companies are either CTPAT certified or their partner carriers in Mexico are CTPAT certified,” Silver said. “Most shippers moving freight out of Mexico expect CTPAT-certified carriers, and so traditionally, [CTPAT certification] has become the norm.”

Freight moved by a company that isn’t CTPAT certified will be more difficult to insure, Silver said, as lax security measures could pose risks to U.S. national security.

See also: Five ways 3PLs can ease cross-border shipping challenges

Cross-border interchange agreement

Warren Transport, a CTPAT-certified carrier, regularly ships freight across the border. Its business model involves an asset-based contract with CTPAT-certified Mexican carriers, also known as an interchange agreement.

“An interchange agreement is basically that you allow your U.S. equipment to go in and out of Mexico with a partnership with a Mexican carrier,” Maldonado said.

Through its interchange agreements, Warren Transport carries a trailer to the border for a Mexican carrier to take that exact trailer and all its contents to its final destination in Mexico. That same Mexican carrier will then bring the trailer back.

The agreement Warren Transport has with CTPAT-certified Mexican carriers places sole responsibility for the trailer on the Mexican carrier that signs the agreement. The contract provides trailer details, such as its number, condition, tires, and more, to ensure it returns in the same condition as it left.

If the Mexican carrier returns the trailer damaged or with a different set of tires, for example, Warren Transport will bill the Mexican carrier for the damage. In some instances, this has encouraged the carrier partner to provide their drivers with training to ensure they take care of the equipment, Maldonado said.

U.S. carriers can also insure the trailers that are sent across the border, Vickers explained, which is popular among Reliance Partners’ large, asset-based carrier customers that send trailers into Mexico.

Motor carriers that have these certifications, partnership agreements, and insurance in place should feel confident operating across the border.

“Any motor carrier that is having a Mexican carrier move their trucks, they should be comfortable about it, because they've got a trailer interchange agreement in place, they're working with CTPAT-certified motor carriers, and they can now get insurance for it, too,” Vickers said.