Executive Briefings

Researching Cross-Border Logistics

Lack of visibility continues to be a problem on shipments moving into the U.S. from Mexico, making it difficult for supply-chain managers to plan and respond, says Arnold Maltz, associate professor of supply chain at Arizona State University. He has launched a research project at the school, along with several partners, to identify causes and possible solutions.

"I have been living near the border for 20 years and everyone complains about how difficult cross-border commerce is," says Maltz. If an importer is receiving goods from Mexico, it is hard to know when the freight will be delivered, he says. "You hope for three days, but it might be four days or, in some cases, two weeks."

Today managers typically guess how much extra inventory and/or extra lead time they need to put in their planning models, Maltz says. "If we can resolve this issue, people will be able to manage their inventory much more tightly, which should mean lower cost for customers as well better control of manufacturing operations."

Companies often blame Customs for unexplained delays, Maltz says, "but it is pretty difficult to verify that." There is no question that Customs' inspections can cause delays, but there also clearly are situations where companies themselves cause problems through poor paperwork or simply not understanding what is required of them, he says. This is true of the U.S. border with Canada as well as Mexico. While the problem is less severe on the Canadian side, the study will look at delays at both borders.

Getting the information needed to do this research won't be easy. Customs has some of the information, but it is not much interested in sharing, Maltz says. "Customs' role has become much more about security in recent years and they don't want to people to know too much about their operations," says Maltz. For most of the information, Maltz is relying on importers and forwarders, who keep very good records, he says. "We also are putting people on the ground observing traffic as it goes through border points," he notes.

Maltz hopes to have initial results of this research in the spring, with a final report in the summer.

To view video in its entirety, click here

Lack of visibility continues to be a problem on shipments moving into the U.S. from Mexico, making it difficult for supply-chain managers to plan and respond, says Arnold Maltz, associate professor of supply chain at Arizona State University. He has launched a research project at the school, along with several partners, to identify causes and possible solutions.

"I have been living near the border for 20 years and everyone complains about how difficult cross-border commerce is," says Maltz. If an importer is receiving goods from Mexico, it is hard to know when the freight will be delivered, he says. "You hope for three days, but it might be four days or, in some cases, two weeks."

Today managers typically guess how much extra inventory and/or extra lead time they need to put in their planning models, Maltz says. "If we can resolve this issue, people will be able to manage their inventory much more tightly, which should mean lower cost for customers as well better control of manufacturing operations."

Companies often blame Customs for unexplained delays, Maltz says, "but it is pretty difficult to verify that." There is no question that Customs' inspections can cause delays, but there also clearly are situations where companies themselves cause problems through poor paperwork or simply not understanding what is required of them, he says. This is true of the U.S. border with Canada as well as Mexico. While the problem is less severe on the Canadian side, the study will look at delays at both borders.

Getting the information needed to do this research won't be easy. Customs has some of the information, but it is not much interested in sharing, Maltz says. "Customs' role has become much more about security in recent years and they don't want to people to know too much about their operations," says Maltz. For most of the information, Maltz is relying on importers and forwarders, who keep very good records, he says. "We also are putting people on the ground observing traffic as it goes through border points," he notes.

Maltz hopes to have initial results of this research in the spring, with a final report in the summer.

To view video in its entirety, click here