Executive Briefings

Challenges and Rewards of Moving Freight Between the U.S. and Mexico

Tom Sanderson, CEO of Transplace, discusses the growing U.S.-Mexico freight market and how Transplace continues to strengthen its presence there. Sanderson also highlights border-crossing issues that continue to complicate U.S.-Mexico freight moves.

Sanderson has lots of reasons to love the freight market to, from and in Mexico. "Mexico is the 15th largest country in the world, ranked by GDP, and is growing faster than either the U.S. or Canada," he says.

Sanderson notes that between 2000 and 2012, port traffic in Mexico grew threefold; in comparison, Canadian ports grew less than twofold and U.S. ports were up less than 50 percent. Since NAFTA, trade between the U.S. and Mexico is up fourfold. "Mexico is a very large, very fast-growing market with a highly educated and hard working population," he says. "The offices Transplace has throughout Mexico are some of our best. In fact, our office in Monterrey, Mexico, has the highest percentage of employees with college educations of any office in North America."

Transplace is growing its intra-Mexico freight business as well as cross-border freight. While most of the company's cross-border moves are by truck, Sanderson sees "a real opportunity for growth in taking share away from highway and moving it intermodally across the border." Currently, truck cross-border traffic is about eight times that of intermodal, he says.

"A lot of the freight that crosses the border is longhaul, so the economics of intermodal are compelling," Sanderson says. Equally compelling is that customs clearance for intermodal moves can be done inland, eliminating delays at crossing points.

Truck border crossings continue to be a challenge because each move typically involves three different trucks, Sanderson explains. A truck on one side moves goods to the border and a truck on the other side takes goods to destination. A third truck must be used for the actual border crossing. "Neither Mexican nor U.S. trucking companies wants their line-haul drivers tied up at that border, which is very congested," he says. Sometimes a trailer moves intact between the U.S. and Mexico, but even a lot of that freight is cross-docked at the border because neither Mexican nor U.S. carriers want their trailer going into the other country. "Ideally, trailers would move freely across the border, but that's usually not the case, so we have warehousing and cross-dock space in Laredo."

Having three different trucks and customs clearance makes cross-border moves "very complicated," says Sanderson. "It takes a lot of knowledge about what happens on both sides of the border as well as commodity knowledge for dealing with customs."

Transplace has had no significant security issues with cross-border freight, though it does take precautions, such as technology to track some trailers and to sense if the trailer door is opened. "As long as we are wise in the way we vet and select the trucking companies we do business with, I don't think we’ll have much of a problem," he says.

To view the video in its entirety, click here

Sanderson has lots of reasons to love the freight market to, from and in Mexico. "Mexico is the 15th largest country in the world, ranked by GDP, and is growing faster than either the U.S. or Canada," he says.

Sanderson notes that between 2000 and 2012, port traffic in Mexico grew threefold; in comparison, Canadian ports grew less than twofold and U.S. ports were up less than 50 percent. Since NAFTA, trade between the U.S. and Mexico is up fourfold. "Mexico is a very large, very fast-growing market with a highly educated and hard working population," he says. "The offices Transplace has throughout Mexico are some of our best. In fact, our office in Monterrey, Mexico, has the highest percentage of employees with college educations of any office in North America."

Transplace is growing its intra-Mexico freight business as well as cross-border freight. While most of the company's cross-border moves are by truck, Sanderson sees "a real opportunity for growth in taking share away from highway and moving it intermodally across the border." Currently, truck cross-border traffic is about eight times that of intermodal, he says.

"A lot of the freight that crosses the border is longhaul, so the economics of intermodal are compelling," Sanderson says. Equally compelling is that customs clearance for intermodal moves can be done inland, eliminating delays at crossing points.

Truck border crossings continue to be a challenge because each move typically involves three different trucks, Sanderson explains. A truck on one side moves goods to the border and a truck on the other side takes goods to destination. A third truck must be used for the actual border crossing. "Neither Mexican nor U.S. trucking companies wants their line-haul drivers tied up at that border, which is very congested," he says. Sometimes a trailer moves intact between the U.S. and Mexico, but even a lot of that freight is cross-docked at the border because neither Mexican nor U.S. carriers want their trailer going into the other country. "Ideally, trailers would move freely across the border, but that's usually not the case, so we have warehousing and cross-dock space in Laredo."

Having three different trucks and customs clearance makes cross-border moves "very complicated," says Sanderson. "It takes a lot of knowledge about what happens on both sides of the border as well as commodity knowledge for dealing with customs."

Transplace has had no significant security issues with cross-border freight, though it does take precautions, such as technology to track some trailers and to sense if the trailer door is opened. "As long as we are wise in the way we vet and select the trucking companies we do business with, I don't think we’ll have much of a problem," he says.

To view the video in its entirety, click here