n n n ‘. concat(e. i18n. t(“search. voice. recognition_retry”),’n
The year 2020 marked a significant inflection point for many corporations in the United States and across North America. First, the adoption of the U. S. -Mexico-Canada Agreement entered into force, paving the way for a more favorable trading environment. Then, businesses and consumers were abruptly confronted with the profound impact of supply chain disruptions caused by China’s zero-COVID policy. These disruptions have highlighted the fragility of global supply chains and the need for more resilient business strategies.
While the practice of offshoring and reshoring production outside of China has had its ups and downs for many years, the incentive for corporations to temporarily repatriate more links in their supply chain to North America is more evident than ever.
However, the inherent price taken by many organizations in creating or expanding source chains in North America has also led to demanding situations along the U. S. -Mexico border. Northbound highway capacity is a thorny factor for many U. S. and Canadian corporations that are now integrating (or contemplating integrating) Mexican production and suppliers into their overall strategy.
“The capacity factor at the border has been going on for years,” said Ed Habe, vice president of sales for Averitt in Mexico. “Unfortunately, there is no indication that we will see a sudden change in the near future, as many of those issues revolve around complex challenges, adding up to shipping infrastructure, shortages of drivers and devices on both sides of the border, as well as delays in inspections at crossing points. “
As offshoring continues to gain momentum, carriers will face demanding situations similar to the capacity of classic highways from Mexico, resulting in longer transit times and higher costs to ensure limited space. According to Habe, companies want to start looking at their transportation methods as soon as possible.
“Being the last to adapt in supply chain operations is a position that no company needs to be in,” Habe said. “It is incumbent upon companies, especially those dealing with large volumes or industries that rely heavily on speed to market, to proactively adopt studies and implement effective ways to diversify their transportation routes outside of Mexico.
As for diversifying cross-border shipping operations with Mexico, Habe suggests that rail and even maritime transportation in the Gulf may be potential opportunities under the right circumstances.
“Companies deserve to come together with their transportation partners and determine whether or not there might be benefits to exploring non-traditional moves north,” Habe said. “Shipping across the Gulf instead of across the border might seem a little weird at first, but depending on the final destination of the cargo, some companies might be able to achieve greater efficiencies. »
Simultaneously, cross-border diversification extends beyond merely utilizing multiple modes of transportation. A key driver of capacity challenges is the preference of many shippers to use a limited supply of U.S. trailers for the entire journey from the origin in Mexico to the destination in the U.S. Consequently, this often leads to prolonged wait times for securing a U.S. trailer in Mexico, in addition to the delays experienced at the border.
One strategy shippers can employ for this factor is to transship from a Mexican trailer to a U. S. trailer in a border city, such as Laredo or El Paso. This technique allows for faster access to available Mexican trailers south of the border and ensures more reliable U. S. trailer resources in the United States.
According to Habe, the best ways to overcome today’s demanding cross-border shipping situations will always be strengthened through relationships.
“Shippers need to build partnerships with their transportation providers that go beyond just transactional needs,” said Habe. “The opportunities with nearshoring are exponential, but the risks for failing to strategize and diversify are just as great.”
Averitt has been offering logistics answers to, from and in Mexico for more than 25 years. Backed by a committed team of cross-border experts, customs brokers and a physically powerful infrastructure of border distribution centers, Averitt provides door-to-door answers that simplify the complex nature of cross-border transportation.
The company’s recent white paper “Bypassing the Bottleneck: Solutions for Avoiding Freight Congestion at the U.S.-Mexico Border” further explores strategies shippers can use within their transportation strategy.
The post The Resilient Link: Strengthening U. S. -Mexico Supply Chains Through Diversification appeared first on FreightWaves.