5 Ways to Streamline Cross-border Transportation

40Seas global trade import supply chain rate cross-border

Global Logistics, Global Trade Daily, Imports/Exports

5 Ways to Streamline Cross-border Transportation

May 17th, 2024 Tony Esparza Leave a comment

Over $1 trillion in goods consistently cross the U.S.-Canada and U.S.-Mexico borders annually. And with nearly 30% of all U.S. trade in 2023 conducted with its neighbors to the north and south, streamlining cross-border transportation is crucial. Shippers doing business across North America must be prepared to navigate the complexity and challenges that come with cross-border trade.

Growth of North American Trade

The high volume of goods being moved across the northern and southern border is not new. U.S. imports from Canada have increased at an annualized rate of around 4.23% over the last 27 years and reached US $429.6 billion in 2023. Meanwhile, U.S. exports to Canada have increased at an annualized growth rate of 3.69% over that same period, reaching US $352.76 billion in 2023.

Likewise, the value of goods imported to the U.S. from Mexico rose to over US $475 billion in 2023 and imports from Mexico to the U.S. are expected to increase by 30-40% in the next 5 years, especially as interest in nearshoring continues to grow.

While increased trade between the U.S., Mexico and Canada will positively impact businesses and the economy, it brings with it a range of cross-border transportation challenges that shippers must navigate.

Cross-border Transportation Challenges: Customs & Border Procedures

Navigating the complexities of cross-border transportation presents a myriad of challenges for shippers. The first, and most important, are customs and border procedures. From documentation and security inspections to border clearance processes, customs and border crossing procedures can be labor-intensive and intricate for shippers and an intimidating aspect of supply chain operations.

Within this already complicated ecosystem of regulations, different border crossings require different customs procedures. As a result, shippers must know the different requirements and procedures for northbound versus southbound freight, as well as for individual origin terminals. Shippers should not assume the requirements and procedures for transporting goods from the U.S. into Canada are the same as going from Canada to the U.S.; otherwise, they risk having shipments held up at the border.

These complex procedures and requirements make it critical for shippers to have the necessary processes in place. For example, many required documents, such as commercial invoices and USMCA compliant certificate of origin, must be compiled and key shipment data such as the names of the exporter, importer and carrier, points of origin and destination, product weight and size, handling unit, container type for handling unit, piece count on the handling unit, container type for pieces and more must be submitted electronically several hours before a load gets to the border. Submitting pre-arrival information electronically using the Canada Border Services Agency’s (CBSA) eManifest Portal can help streamline the cross-border process but requires shippers and their carrier partners to have processes in place to compile and submit required data in advance.

Complicating matters further, these procedures present a moving target for shippers when they are updated or changed. One recent change to customs procedures impacting shippers is the CBSA’s Assessment and Revenue Management (CARM) project, a multi-year initiative intended to transform the collection of duties and taxes for goods imported into Canada. CARM requires importers to submit documents and make payments through a new system. This puts the onus on the importer to compile and submit the required data and paperwork in advance, which can add additional steps or complexity to shippers’ operations. Technical and integration issues have disrupted operations and caused delays for many shippers.

More Cross-border Transportation Challenges for Shippers

Regulatory Requirements and Differences: Differences in regulations related to documentation, safety and emission standards, taxes, product certifications, permits, driver hours-of-service and more between the U.S., Canada and Mexico create compliance challenges for shippers, transportation carriers and logistics providers. Goods must not only comply with the regulations and safety standards of the country of origin, but also of those of the receiving country.
Security Procedures: Strict security measures are in place to reduce the threat of terrorism, smuggling and other illegal activity when shipping goods across the border. This includes customs officials reviewing presented documents and checking any other mandated security requirements. For example, some countries, like the U.S., require security seals to be placed on trailers upon loading to prevent tampering during transit. While countries use random selection for inspections, factors such as suspicious goods, flagged countries of origin, new shippers, etc. can impact which shipments are selected. Depending on the risk assessment, physical inspections may be non-intrusive using X-ray systems or require containers to be opened and verified. These inspections can add obstacles to the shipping process and can cause delays.
Infrastructure Gaps: Efforts to improve the border crossing process are ongoing, but challenges remain. Varying infrastructure quality, outdated systems, limited staffing, and high traffic volumes at some border crossings create bottlenecks, contributing to delays. The need for better integration between transportation modes also contributes to wasted costs.

Steps to Streamline Cross-border Transportation

Effective cross-border transportation without delays relies on collaboration and coordination among importers, exporters, transportation providers, customs and border authorities, and other stakeholders. While a challenging process, there are steps shippers can take to set themselves up for success. By following these best practices, shippers can navigate the complexities of cross-border shipping and help ensure the smooth transportation of goods across North American borders.

1. Partner with a transportation provider with a proven track record. Choose reliable carriers with experience in cross-border shipping. Look for companies with technology and processes to streamline and simplify cross-border shipping, especially if you select a single provider for end-to-end service. Consider factors such as lanes, terminal locations, transit times, and customer service when selecting carriers.

Utilizing The Customs Self-Assessment Program (CSA) and C-TPAT-certified carriers and Commercial Driver Registration Program (CDRP), drivers can further streamline and reduce the risk of delays or compliance-related issues at the border. For example, carriers with terminals near the Canadian border can carry both CSA-approved and non-CSA approved freight and store freight until it’s cleared without affecting the freight that’s eligible to cross the border. Or if one importer on a trailer didn’t submit their paperwork in advance via the CARM portal, those goods can be stored at the terminal while the rest of the shipment can continue without delay. Additionally, bonded carriers are licensed to move freight through U.S. border crossings without having to pay duties or fees during that segment of transportation, helping further streamline cross-border shipping.

2. Automate the process. Utilizing transportation software and compliance solutions expedites the cross-border shipping process by automating documentation creation and submission while also reducing manual process time and errors. By automating the process, you avoid needing to compile documents from multiple sources. It also ensures all necessary documents, containing complete and accurate information, are available to all stakeholders, when and where they need them.

3. Have a secondary customs broker as a backup. Disruptions within the supply chain, whether due to software glitches, security breaches or transportation providers shutting down operations, can significantly impact a shipper’s business. Just as shippers are diversifying their carrier bases to create more resilient supply chains, having a secondary customs broker in place can help mitigate disruptions if there are issues with a primary broker.

4. Stay informed. Understand how the requirements and procedures for cross-border shipments differ from domestic shipments. Keep up to date with the customs regulations, documentation requirements and duties for both the exporting and importing countries. Confirm you have the proper processes in place to comply with these requirements to avoid costly delays and fines.

5. Ensure complete and accurate shipping documents. Verify all shipping documents, including commercial invoices, customs declarations, bills of lading, certificates of origin, and any necessary permits, are complete and accurate. Errors, discrepancies, or missing paperwork can cause delays and customs clearance problems. Also, make sure the proper shipment data is submitted electronically in advance and is ready for the driver.

Be Proactive with Approach to Cross-border Shipping

As trade between the U.S., Mexico and Canada continues to grow, the need for effective cross-border shipping processes becomes even more crucial. Even if only a small percentage of shipments go to or from Mexico or Canada, shippers must take steps to ensure they’re prepared and shipped properly to avoid disruptions to their supply chain.

Author Bio

Tony Esparza is vice president of strategic operations at Hercules, an award-winning, asset-based motor carrier and customs brokerage, specializing in US-to-Canada, cross-border to and from Mexico, and intra-US shipments.

Archives, Global Trade Daily, News, Trucking

Heavy-Duty Trucks Market: Top Key Trends Fostering the Industry Outlook through 2026

June 30th, 2021 Graphical Research Leave a comment

The heavy-duty trucks market size is poised to expand at substantial CAGR during the forecast period. With the incorporation of advanced technologies including IoT, AI, smart navigation systems, and accident prevention technologies, the heavy-duty trucks industry worldwide is sure to undergo expansion. Focus on emission reduction, environmental sustainability, and efficient engines is expected to drive the demand for these trucks over the forthcoming years.

The following ten major factors have been observed across the heavy-duty trucks industry outlook:

Government investments in infrastructural activities in the Asia Pacific

With the thriving construction and real estate sector of countries such as India, South Korea, and China, heavy-duty trucks are expected to see a greater deployment rate in the next few years. By 2026, the Asia Pacific market share should have gained substantially from the numerous government investments and initiatives toward the promotion of construction activities in the region.

This includes the allotment of a massive government expenditure toward digitalization, integration of artificial intelligence (AI), Internet of Things (IoT), 5G networks, and intercity transportation networks.

Scrappage policy to boost India’s expansion

As part of the focus on economic recovery, the Indian government has been intending to incentivize heavy-duty truck owners to purchase new heavy-duty trucks and other commercial vehicles, discouraging usage of old, polluting ones via its new scrappage policy in Budget 2021.

The move will not only ensure lower pollution rates but also encourage the advancement of the heavy-trucks segment of the commercial vehicle market, which has been witnessing a decline in the past two years across the nation. The Indian market is likely to gain considerable revenue, thanks to the proposal of the Ministry of Road Transport and Highways (MoRTH) to provide new heavy-duty trucks with a discount of road tax as well as a waiver of the registration fee.

Growing demand for diesel heavy-duty trucks

The diesel engine segment of the APAC heavy-duty trucks market is expected to witness a significant expansion through the projected timeline, by credit to the lower fuel consumption alongside the higher efficiency of these engines when compared with gasoline trucks. Integration with compression-ignition of these trucks ensures their fuel efficiency. The lower costs and easy availability of diesel are likely to boost the demand for diesel-powered heavy-duty trucks in the upcoming years across APAC.

Focus on product launches across the Asia Pacific

Several industry leaders in the APAC heavy-duty trucks industry have been seeking to expand their presence through product launches. For instance, in June 2020, Mahindra introduced its Blazo X, a commercial truck with optimized fuel efficiency, across India. Similarly, in January 2021, Daimler India Commercial Vehicles (DICV) launched its new heavy-duty specialized refrigerated truck for safely and efficiently transporting COVID-19 vaccines throughout India.

U.S. auto sector to flesh out higher gains

The heavy-duty trucks market in the U.S. has been exhibiting growth due to higher demand for transportation of cargo and goods, generating more revenue. The American Trucking Association (ATA) findings reveal that over 71% of the freight tonnage across the U.S. is transported using trucks. The thriving cross-border trade between the U.S. and neighboring countries is expected to boost the North American heavy-duty trucks market size.

Integration with ADAS technologies in North America

With technologically advanced heavy-duty trucks being developed by the leading manufacturers across the region, the market in North America is sure to soar. The focus on driver assistance and automation technologies has been a major trend defining the market’s progress. Recently, heavy-duty truck manufacturers have been prioritizing accident prevention and blind-spot monitoring through the adoption of ADAS systems in their product offerings.

Expanding demand for 4×2 axle heavy-duty trucks in Europe

Big trucks with multiple axles offer a better driving experience than single axle trucks. The demand for these vehicles has been spiraling across Europe’s heavy-duty trucks market. There is a growing utilization of 4×2 axle heavy-duty trucks, primarily triggered by the stringent regulatory policies of the European Commission. The EU has enforced permissible weight carriage as per the axle count of heavy-duty trucks.

300-400 horsepower trucks to gain traction across Europe

Owing to the advantages of 300-400 horsepower trucks, the demand for these vehicles has been witnessing an uptick. These trucks feature superior fuel efficiency alongside a lower engine weight. The segment is expected to surge at a high CAGR through the forecast years, due to their comparatively lower costs and enhanced abilities to haul heavy loads.

Hefty penalties for non-compliance with EU standards

Numerous heavy-duty truck manufacturers in Europe have been investing in the integration of innovative technologies aiming at achieving the zero-emission target from 2025 onward, in order to avoid payment of hefty penalties for non-compliance with EU standards. Recently, the EU has announced the adoption of carbon-neutrality targets and standards for heavy-duty trucks.

These include a 15% reduction from 2025, which will augment to 30% by 2030, attaining zero emissions by 2050. The implementation of such regulatory frameworks is certain to flesh out more demand for electrified trucks across the European region.

3pls, Archives, Global Logistics, Global Trade Daily

CROSS-BORDER CARGO TRANSPORTATION CHALLENGES AND SOLUTIONS

February 28th, 2021 Haylle Sok Leave a comment

Managing a streamlined supply chain for cross-border cargo transportation entails much more than identifying the fastest, most efficient method of getting cargo from point A to point B. Current market challenges have been amplified due to the pandemic and now go beyond ensuring cargo arrives at the final destination on time. The safety of transportation workers as a result of internal processes is now at the forefront of cross-border transportation. After all, if the truck driver is not healthy enough to deliver the products, the products do not move. In the new normal, worker safety is more important than ever.

“Some of the challenges out there are found more so in the area of the trucks that are crossing and the drivers,” says Michael Ford, vice president of Government and Industry Affairs at BDP. “If I was a trucking company, how do I ensure my driver’s safety? When that driver gets in the cab every day, do I know they are healthy?”

Ford continues, “Setting up those types of protocols internally, ensuring that I’m putting a safe driver on the road and that they’re able to perform those tasks as if there’s any type of cross border is critical, especially now. Coordinating, communicating, setting that up, and ensuring that everything is in play really becomes important.”

When driver safety has been established, coordination efforts are challenged once again depending on the region the cargo is crossing. Each region presents a unique set of roadblocks from customs to short and long-haul planning times. Cross-border transport from the U.S. to Canada is a much different process than what U.S. to Mexico transport requires for success.

Although these challenges are not new, they include more variables that require streamlined coordination from the very beginning. Trade lanes are now more open and traveler impact has shifted, presenting opportunities along with the challenges.

“In the past, we have seen much more congestion than we do currently,” Ford notes. “It has always been there between the U.S. and Mexico. But now, while there is less cargo and less traffic running back and forth, it has improved processing time. So, less cargo, less travel. If anything, it has improved and allows U.S. and Mexico customs to do what they need to do–which is all about security and ensuring the right cargo is coming through.”

Technology continues to play a critical role in ensuring worker safety and the efficient transport of cargo. The pandemic created an environment where technology is no longer simply an option but a requirement for the continuation of operations as it provides alternatives to paper-processes and close-contact for workers and customs agents.

“Previously when trucks cross, the driver pulls over, gets out of the cab, and hands paperwork over,” Ford says. “So, the question now is how do we achieve that full paperless experience on both sides in the U.S., Canada, and Mexico? When the driver pulls off, I need to know I have the driver, the driver’s ID, etc. and technology supports the keeping up with this information. It also keeps the driver in the cab and allows whatever information needed to be accessed.

“Advanced data has allowed a lot of that to take place. Being able to share and obtain better inter-agency cooperation goes a long way to helping the flow of cargo across the borders.”

Technology is a part of the bigger picture. Without technology, the constant exchange of information and obtaining updated data is slowed down. Without inter-agency communications along with customs collaborations, cross-border operations are at risk for further delay. Collaborations between customs agents are the key to making operations for cross-border providers more simplified and accelerated. This incorporates security and accuracy while verifying the right cargo continues to its final destination.

“U.S. Customs has been working with Mexico and vice versa to establish points inside of the other’s country and allowing personnel to set up there,” Ford says. “In the case of letting Mexican Customs come into U.S. territory and process the clearance, it allows that truck to go all the way through, eliminating the need for stopping at the border area. This makes a world of a difference and it speeds everything up. It requires the need for cooperation of the companies that want to improve their business flow. Changing to a brand-new environment for cross borders is big.”

Beyond reducing interactions, the overall reduction of paper processes and redundancies continues to be at the top of mind for companies engaging in cross-border operations. Along with its other supply chain disruptions, COVID-19 has pushed logistics players toward paperless and contactless operations, adding more pressure to the already complex market. For some, utilizing the technology toolbox (such as blockchain) could be the very thing that overcomes the hurdles presented by the pandemic.

“We hear a lot about blockchain, and there are applications inside of this cross-border sector where blockchain can be used as a piece of technology,” Ford says. “Instead of paper, using a blockchain technology to prove that your goods qualify under the USMCA agreement should be in play, for example.”

Regardless of whether the world is battling a pandemic, streamlined collaboration will ultimately pave the way for successful cross-border trade. This requires the latest data for every participant, thorough internal and external communications, and solid business relationships with a common goal to ensure products are received safely and accurately.

“Everybody needs to be involved,” Ford maintains. “It is everybody working together: the carrier, the custom-house broker, the government, and all others. It is also about forming that type of relationship where information is being shared and collected, and as much in advance as possible is part of the success that needs to happen.”

He concludes: “Things can’t just stay the way they have been. But on the other side of things, we need cargo security and the customs officers from the U.S. and Mexico need to be safe. We talk about COVID-19 and workers, but we are also asking those officers to be on the front lines. Keeping that in play becomes a big challenge.”

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Michael Ford is a career professional with more than 40 years of experience in international transportation, specializing in import/export documentation and regulatory compliance. Among his other affiliations, Mr. Ford is the co-chair for Trade on the Export Committee in the development of the new Customs ACE system and has served with Customs as a member of COAC (Commercial Operations Advisory Council), chair of the Mid-Atlantic District Export Council and the partner sector with the American Chemistry Council, Responsible Care Committee. He can be reached at michael.ford@bdpint.com.

This article was originally published in December 2020

Archives, Global Logistics, Global Shippers 101, Global Trade Daily

Supporting Global Supply Chain Strategy with Cross-Border Shipping

August 25th, 2020 Kyle Toombs Leave a comment

COVID-19 has shed light on the importance of shippers being prepared to work through unforeseen market conditions. This is especially true for cross-border shippers, whose businesses are reliant on multiple countries’ markets. To better prepare for these variations, businesses that rely on cross-border shipping should consider optimizing their supply chain strategies now by dedicating time to understand the cross-border options available to them. There are two primary choices: through-trailer and transloading.

What’s the difference?

Through-trailer shipping is the process of moving shipments in the origin trailer through border crossings. Whether exporting or importing, through-trailer shipments are handled on one side of the border with a carrier from the same country who has an interchange agreement. A different carrier from the other country handles the second part of the shipment.

To illustrate, a Mexico carrier with a trailer interchange agreement with a U.S. carrier picks up the freight. It’s taken to a secure yard where a border drayage driver transports the trailer across the border to the U.S. carrier’s yard for final delivery.

The shipment remains in the same trailer throughout the transport process, leading some shippers to believe the shipment seal is not broken. This is not necessarily true. U.S. and Mexico customs officials often break seals during border crossing inspections to verify product details.

Transloading is another option and is often considered more efficient. Transloading is the process of transferring shipments from one trailer to another at the border crossing. For example, a Mexico carrier picks up the freight and moves it to a secure yard at the border. A border drayage carrier moves the trailer across the border to a transloading facility. The facility then transfers the product to a U.S. carrier for final delivery.

The Benefits of Transloading

While both options have their pros and cons, transloading can offer some unique benefits that fall into three categories:

Additional Carrier Capacity: Transloading offers shippers additional carrier capacity because it enables them to access the full capacity of two independent carrier bases. Any U.S. carrier can pair with any Mexico carrier on a shipment, increasing available carrier options and granting additional flexibility. Through-trailer service only allows shippers to use carriers with an interchange agreement in place with a counterpart carrier on the other side of the border, limiting the capacity pool. With lessened demand not filling up truckloads, the ability to leverage the additional carrier capacity to identify which carriers’ trucks best match truckloads keeps products moving to meet consumer demand.

Lower Shipping Costs: Transloading grants access to additional capacity on both sides of the border, which means more, and potentially more efficient, carrier options. With transloading, shippers and logistics providers can identify carriers whose networks most closely align with theirs, resulting in more cost-effective rates. During a time when all departments are urged to cut costs where possible, the method with lower shipping costs benefits everyone involved.

Fewer Border Delays: The broad variety of carriers available to shippers makes it easier to source carriers on both sides of the border that best match the ideal pick-up and delivery time frames. Through-trailer shipments are dependent upon the limited capacity of the two carriers tied to an interchange agreement. In turn, this can lead to delays at borders and in overall shipments. Such delays are becoming more widespread because of the imbalance between northbound and southbound freight.

The Types of Freight to be Transloaded

Any specialized transloading facility located near a major border should have the ability to handle a variety of freight, although some types work better than others. Freight loaded on slip sheets or pallets typically fare best with transloading, especially consumer packaged goods, food and beverage, and raw materials. Transloading is also prevalent when shipping to warehouses with strict labeling and palletization requirements. Conversely, freight is better off using through-trailer shipping when it requires specialized loading, contains over-dimensional products, or includes flatbed shipments.

The needs of each shipper with a global supply chain strategy differ and come with unique challenges and requirements. It’s critical for each shipper to know their cross-border options and determine which will work best for their business. By being knowledgeable and prepared, shippers can more easily select which process to implement based on what is most important to their company at the time, whether that be price, shipping time, or carrier capacity.

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Kyle Toombs is the VP and Head of Mexico and Canada at Coyote Logistics

5 Ways to Streamline Cross-border Transportation

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