Mexico Border Crossings Demand Knowledge & Resources: Do You Really Need a 3PL?

Implications: Operating cross border shipments is not as complicated or troublesome as some would suggest. What's needed is knowledge of US and Mexico Customs laws, a commitment to compliance, and understanding the distance specialized truckers like/want to travel. The question is: are you up for it or do your infrastructure constraints dictate handing it off?

Analysis: Getting through customs is not the headache the uninformed believes it may be. Sure technology capabilities, printed versus electronic documentation, and the inspection process may be polarized among the two countries in certain areas. But the first step is knowing you'll be delivering to, or receiving from, your own corporate family member, or, if you'll be transacting as buyer or seller with another entity. If the latter, specify terms of sale on your side of the border and you've avoided border logistics. But if you are a US company that owns a Mexico corporation, and you'll be exchanging raw materials and finished product, your choice of production site and Mexico tax status will dictate the amount of resources needed to comply with both US and Mexico Customs law, something best displayed by a mix of any or all of outsourced, contracted, or in-house staff and data systems.
 
Whether locating near the border as a bonded maquilladora (typically within the frontier range of about an hours drive) or deeper in-country operating with tax-deferred status (challenging but obtainable, something analogous to foreign trade zone status) compliance is not an option: do it or face losing your tax status, heavy fines, and worse case, maybe prison time for your in-country representatives. And while these scary facts are not for the faint of heart, rest assured that the process is designed for those willing to staff, support, and comply in exchange for the economics and favorable tax benefits associated with operating inside our neighbor to the south.

As for transportation, recognize that although Washington would like you to believe that team drivers can operate nonstop from Mexico City to Montreal, courts and government agencies are still sorting this out. So, while the subject of thru-trucking continues to emerge, today you can tender your freight to a number of carriers that have partnerships with those on the other side. Map out your end to end point pairs and understand the carriers' internal handling process from driver to driver.

Typically the move may pass from your originating carrier to within a few miles of the border where, once compliant with Customs on both sides, perhaps encountering crossdock inspection and trailer switch, a second carrier will take it into the receiving country and park it a short distance from the boarder. Then, a third driver will continue on to destination. While the perceived loss of control and handoffs are unsettling to those use to single carrier / single driver departure and arrival, this process continues to work as it has for many years.
 
But what makes this operation successful is the completeness and accuracy of your documents presented to both sides of Customs every time you perform a crossing. For that you need sufficient staffing to create and present documents, which is why many rely on the presence of a border broker. And don't forget about being registered with C-TPAT, a voluntary program of US Homeland Security that enables you to be a "known" US importer. It could mean the difference between a 4 or 5 hour line waiting for clearance versus under an hour or so depending on the nature of your product and time of day.

Within this environment it's easy to see why so many companies have handed this work over to a Third Party Logistics (3PL) provider. However, an understanding of requirements supported by unwavering process discipline will help make cross border operations routine. And if you do decide to outsource to a 3PL, remember that compliance to Customs laws remains with you and, specifically, the individual assigned to overseeing Customs declarations and payment of duty and taxes. This obligation does not shift to your 3PL: it remains yours so long as you operate your Mexico company.