ippingU.S.-Mexico
Shipping Options
White Paper

In brief
Understanding what can happen at the U.S.-Mexico border with your truckload shipments could impact the decisions you make—and whether or not you will actually get what you pay for. By reviewing the process and your options, you will be able to develop better, more efficient strategies to help minimize costs and risk.

Contents
Cross-Border Shipping: A Primer
1. Carrier restrictions
2. Cargo inspections
3. Cargo insurance
4. Equipment availability
Northbound Shipments, Step by Step
Southbound Shipments, Step by Step
7 Tips for Choosing a Cross-Border Provider

C.H. Robinson | U.S.-Mexico Cross-Border Services

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If you’re not already shipping products via truckload across the U.S.-Mexican border, it’s probably only a matter of time, considering that Mexico is the United
States’ third-largest trading partner.1 More than
18,000 companies with U.S. investment already have operations in Mexico,2 and many others ship their products across the border. This white paper will better prepare you to join them.
There are two distinct methods of truck transportation across the border: transloading and direct service. In transloading, product is transferred from one trailer or container to another at a warehouse or terminal before crossing the border and being taken to
FIGURE 1 Main land-border the final delivery. In direct service, a trailer or container crossings (U.S.-Mexico) crosses the border on the same trailer or container from origin to destination.
San
Diego

Tijuana

ARIZONA

ORIGIN/DESTINATION
El Paso
Ciudad
Juarez

TEXAS

Laredo
Nuevo Laredo

McAllen
Reynosa

ORIGIN/DESTINATION

When choosing between direct shipment and transloading, remember that:
•  ustoms requirements for both the U.S. and Mexico
C
are exactly the same for direct and transloaded shipments. •  here are two brokers of record involved with both
T
types of shipments, one for U.S. Customs and one for
Mexican Customs.
•  hippers often select their preferred shipping method
S
because of insurance, capacity, cost, cargo handling, and security considerations.

Most cross-border freight goes through the point of entry in Laredo, Texas.

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U.S. Embassy, U.S. Department of State. http://mexico.usembassy.gov/eng/eatataglance_trade.html
U.S. Department of State. http://www.state.gov/r/pa/ei/bgn/35749.htm#relations.

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Cross-Border Shipping: A Primer
These four factors affect almost every cross-border shipment.
ARIZONA

Mexicali
Nogales

FIGURE 2 CARRIER TOUCHPOINTS
ORIGIN/DESTINATION
TEXAS

U.S.

Laredo/Nuevo Laredo

1. Carrier restrictions create the need for three carriers on almost every load. By Mexican law, a U.S. carrier’s tractor can only travel 26 km inside the
Mexican border (the distance varies slightly, depending on the point of entry).
Mexican carriers face similar restrictions in the U.S. As a result, U.S. carriers pick up and deliver on U.S. soil, and Mexican carriers pick up and deliver within
Mexico. Both Mexican and U.S. dray carriers (sometimes called border transfer carriers) are allowed to haul freight within 26 km on either side of the border.

DRAY

MEX

2. Any cross-border shipment can be stopped and inspected multiple times. Mexican and U.S. Customs approach inspections differently, based on each country’s issues and goals.
N
 orthbound. Most imports into the U.S. from Mexico are duty free and the U.S.

ORIGIN/DESTINATION
Whether you ship direct or transload, virtually all of your shipments involve a U.S. carrier, a dray/ border transfer carrier, and a Mexican carrier.

ARIZONA

Mexicali
Nogales

FIGURE 3 Inspection POINTS
ORIGIN/DESTINATION
TEXAS

Laredo/Nuevo Laredo

ORIGIN/DESTINATION
You may choose direct service thinking that your freight won’t be handled again until delivery, and will therefore be less susceptible to damage. But direct and transloaded shipments can be equally subject to handling and inspection.

collects very little money at the bridge crossing for northbound shipments from
Mexico. Trucks are seldom physically unloaded and inspected on northbound moves; the U.S. tends to x-ray shipments and uses dogs to check for drugs, smuggled goods, and people. Then the freight is released into the U.S.
Southbound. Mexico collects a VAT on definitive imports. Because the VAT is a

large revenue source for the country, Mexican Customs is especially vigilant about inspecting southbound shipments from the U.S. into Mexico.
F
 or southbound imports, both the Mexican customs broker and the Mexican importer of record are legally responsible for compliance with Mexican Customs regulations. Only the Mexican importer of record can empower a Mexican customs broker to file an importation or exportation on their behalf. Failure to comply can result in fines, delays, and ultimately, revocation of importers’ licenses.
• To protect their business interests and minimize risk to the importer and

customs broker on southbound moves, the Mexican customs broker often removes the cargo from both transloaded and direct trailers to count and classify the freight. The cargo is then reloaded, either onto a Mexican trailer
(if transloaded) or is reloaded back onto the same trailer (if direct service). The trailer is resealed and drayed across the border into Mexico.
• On southbound moves, U.S. Exit Customs especially watches for contraband

and undeclared cash being smuggled into Mexico.
•  t Mexican Entry Customs, the driver receives either a green light or a red light
A
at Mexican inspections. If it is red, the truck must pull over for inspection. The
Customs authority can unload as much or as little of the freight as they wish.
• After the first formal inspection, the driver undergoes a second red-light green-light process. If the driver gets a second red light, they go to a second inspection dock where the freight is partially or completely unloaded again. This inspection is conducted by an external third party hired by the government to audit the first inspections.

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• Trucks that are cleared proceed to a drop yard in Mexico where the drayman

drops it. Then the Mexican linehaul carrier picks up the trailer and drives it to the checkpoint at 26 km inside the Mexican border. At this site, the freight may be inspected again, but is seldom taken out of the truck at this point.
• Once the truck is cleared to continue, it can be stopped and unloaded

anywhere by the army or police agencies, all the way to destination.

ARIZONA

3. Carriers are not obligated to carry cargo insurance in Mexico. Carriers in the U.S. are required by law to carry cargo insurance; Mexican carriers are not. In order to cover the value of freight while it’s in Mexico, many shippers add a separate endorsement on their global insurance policy for cargo insurance.
Such policies can include exclusions (e.g., coverage will be made for team drivers only, private toll roads only, etc.). The best practice is to carefully review your policy to understand any exclusions from coverage.

FIGURE 4 MITIGATING RISK

Mexicali

DESTINATION
TEXAS

Nogales

U.S.
Warehouse

Laredo/Nuevo Laredo
Mexico Warehouse

ORIGIN
To maintain the validity of U.S. cargo insurance on a northbound move, the transload company should verify the cargo’s condition at the U.S. warehouse. Under the eyes of a closed-circuit video camera, the warehouse provider can: break the seal take digital photos inside the trailer document the freight’s condition before the trailer is unloaded and reloaded into a U.S. trailer

What this means on northbound shipments:
• Direct. Shortages within pallets, missing pallets, and damages can remain hidden until the product is unloaded at its destination. There is usually no way to prove where overages, shortages, or damages (OS&Ds) occurred. The burden of proving whether the incident occurred in the U.S. or in Mexico falls on the claimant, and is required to collect on a claim.
• Transload. The company performing the transloading should verify the condition of the cargo as soon as it enters the U.S. If there is OS&D, documentation of transloading can help the shipper prove the damages occurred in Mexico before the trailer crossed into the U.S., maintaining the validity of the U.S. cargo insurance.
4. Equipment availability varies widely for direct and transloaded shipments. Direct service is often considered a premium cost service, best used for large, heavy freight like machinery, equipment that requires specialized equipment for unloading, or fragile cargo. In direct service, the same trailer will be used from origin to destination; only the tractor unit changes. U.S. carriers that offer direct service will negotiate interchange agreements with Mexican interline carriers, assigning responsibility for their trailers. Only the linehaul carriers who have an interchange agreement with the trailer owner can haul the trailer. The result of this relationship means that there are a limited number of direct trailer providers and a limited amount of direct equipment available.
Transloads leverage Mexico and U.S. backhaul carrier opportunities. With transloading service, the U.S. carrier and Mexican carrier are selected independent of any relationship between the two. Tens of thousands of U.S. domestic and Mexico domestic carriers could be matched together to offer transloading service. As a result, there are more combinations of U.S. domestic and Mexican domestic carriers and a correspondingly larger pool of available capacity.

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Cross-border shipping is complex. There are good reasons to use direct shipping, and good reasons to use transloading service. Review these step by step processes for northbound and southbound shipments. When you understand how cross-border business works, you can make informed decisions and reap the rewards: a more efficient supply chain with greater potential of minimized risk.

Northbound Truckload Shipments, Step by Step
TRANSLOAD

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DIRECT

Mexican linehaul truck loads a Mexican trailer at Mexican origin.

Mexican tractor picks up at Mexican origin typically in a U.S. trailer.

•  hipper emails documents to U.S. and Mexican
S
brokers.

•  hipper emails documents to U.S. and Mexican
S
brokers.

Mexican trailer is dropped in the
Mexican carrier’s yard in Mexican border city.

American trailer is dropped in Mexican carrier’s yard in Mexican border city.

•  .S. broker files U.S. Entry.
U

•  exican broker files and pays Mexican exit
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(Pedimento).

•  exican broker files and pays Mexican exit
M
(Pedimento).

•  .S. broker files U.S. Entry.
U

Mexican broker dispatches a drayman to pick up the trailer from the yard in
Mexican border city.

Mexican broker dispatches a drayman to pick up the trailer from the yard in
Mexican border city.

•  rayman files e-manifest.
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•  rayman files e-manifest.
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Mexican drayman hauls the trailer through Mexican Exit Customs, across the bridge into the U.S.

Mexican drayman hauls the trailer through Mexican Exit Customs, across the bridge into the U.S.

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Mexican drayman drives through U.S.
Customs and delivers the trailer to a crossdock in the U.S. border city.

Mexican drayman drives through U.S.
Customs and delivers the trailer to U.S. carrier’s yard in the U.S. border city.

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Cargo is transloaded from the Mexican to an American trailer. A new BOL is created. U.S. tractor picks up the trailer from
American yard.

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U.S. linehaul carrier makes the delivery at final destination.

U.S. linehaul carrier makes the delivery at final destination.

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Southbound Truckload Shipments, Step by Step
TRANSLOAD

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U.S. carrier loads U.S. trailer at
U.S. origin.

U.S. carrier loads U.S. trailer at
U.S. origin.

•  hipper emails documents to the Mexican
S
customs broker.

•  hipper emails documents to the Mexican
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customs broker.

U.S. carrier live unloads U.S. trailer at the Mexican broker’s warehouse in a
U.S. border city.

U.S. carrier drops U.S. trailer at the
Mexican broker’s warehouse/yard in
U.S. border city.

Mexican broker inspects and documents the cargo and reloads it in a Mexican trailer.

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DIRECT

Mexican broker inspects and documents the cargo and may potentially unload and reload it back onto the same trailer for proper inspection. •  exican broker applies Mexican customs
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seal issued by the Mexican customs broker’s association. •  reates and files U.S. shipper’s Export
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Declaration.
•  exican broker files and pays Mexican entry
M
(Pedimento).

•  exican broker applies Mexican customs
M
seal issued by the Mexican customs broker’s association. •  reates and files U.S. shipper’s Export
C
Declaration.
•  exican broker files and pays Mexican entry
M
(Pedimento).

Mexican dray carrier hauls the Mexican trailer from the warehouse through U.S.
Exit Customs and across the border.

Mexican dray carrier hauls the
American trailer from the warehouse through U.S. Exit Customs and across the border.

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Mexican dray carrier goes through inspection process at Mexican Entry
Customs and drops the trailer at the
Mexican carrier’s yard in the Mexican border city.

Mexican dray carrier goes through inspection process at Mexican Entry
Customs and drops the trailer at the
Mexican carrier’s yard in the Mexican border city.

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Mexican linehaul carrier picks up the
Mexican trailer and makes final delivery in Mexico.

One of the U.S. carrier’s interline partners in Mexico picks up the trailer and hauls it to delivery.

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TIPS for
CHOOSING A

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CROSS-BORDER


TRUCKLOAD

PROVIDER

Flexibility. When a provider offers both direct and transloading services,

they’re able to meet service requirements for a larger spectrum of shipper needs.

2 Bundled Services. Providers who bundle customs brokerage services

with transportation offer single-source accountability for all of your crossborder shipments.
About Us
C.H. Robinson helps companies simplify their global supply chains and understand their landed costs. To help build smarter, more competitive supply chains, skilled supply chain engineers and logistics employees combine a deep knowledge of market conditions, practical experience, and proven processes. From local truck transportation to global supply chain management systems, from produce sourcing to consulting based on practical experience and logistics outsourcing,
C.H. Robinson supplies a competitive advantage to companies of all sizes.
Integrated technology helps companies manage their supply chain spend. This technology gathers data from across the supply chain and provides global supply chain visibility.
For more information, please visit www. chrobinson.com or our Transportfolio® blog at www.blog.chrobinson.com.

3 Capacity. The best providers have developed working relationships with

many carriers on both sides of the border to boost your buying power and provide equipment with ease.

4 Cross-Border Locations. When difficulties arise, a large, reputable, and

experienced provider with employees and offices located on both sides of the border will be located at the heart of the action to represent your interests.

5 Improved Security Processes. Idle freight runs the risk of being

tampered with. A good cross-border provider will offer measures and processes to decrease idle time and improve freight security, including stringent examination processes and secure drop lots/drop trailers.
They can track freight, require that drivers only refuel at approved locations, investigate any unexpected delays, and offer freight escorts.

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nformation and Collaboration. Expect your provider to be on your side in continuous improvement, delivering information and reports about every cross-border transaction.

7 Consolidation. Your LTL shipments can be combined with other shippers’

partial loads to create full truckloads at the border and produce savings.

14701 Charlson Road, Eden Prairie, MN 55347 | 800.323.7587 | www.chrobinson.com
Originally published in May 2010. © 2013 C.H. Robinson Worldwide, Inc. All Rights Reserved.

C.H. Robinson | U.S.-Mexico Cross-Border Services

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