How to manage cross-border logistics challenges
Today, 41 percent of consumers expect their online purchases to arrive in less than 24 hours. As projections for delivery times gradually shorten, and international trade increases in popularity, manufacturers and distributors are adjusting their cross-border logistics strategies to ensure that timely delivery is a top priority. Concurrently, systemic supply chain disruptions, lack of proper infrastructure, and regulatory obstacles all contribute to the complexity of managing cross-border freight transportation.
In order to move goods efficiently, remain agile through unforeseen circumstances, and maintain strong relationships with customers across borders, businesses are turning to experienced third party logistics (3PL) providers for help. A 3PL services provider will help shippers deliver consistent and predictable performances by providing the framework and resources for a successful cross border logistics operation.
Here are three ways partnering with a 3PL provider can optimize cross-border distribution:
Given the constant flow of trade across borders, avoiding traffic congestion can be a considerable challenge without the insight of a seasoned multimodal cross-border logistics expert. Taking a data-centric approach, 3PL partners can combat these issues by identifying and scheduling the right service across a variety of modes. By reviewing historic distribution and performance data, the business can begin to unveil pain points, gain a clear understanding of their needs and limitations, and implement process improvements.
E-commerce sales accounted for 22 percent of total global sales in 2022. As a result, e-commerce retailers with a high frequency of small order volumes must utilize less-than-truckload (LTL) consolidation to navigate the challenge of delivering pallets, half pallets, or parcels in a short window of time. To do so, businesses need access to a large network of consolidation points, including cross-docking, transloading, and short- or long term warehousing.
Additionally, though over-the-road transportation is most common for cross-border shipments, relying on a single route solution does not provide supply chain flexibility and agility. To keep goods flowing through unexpected downtime, 3PL providers who also offer international shipping services can factor in intermodal and ocean solutions as cost- and time-efficient alternatives.
Robust geographic network
Although labour is cheaper in other parts of the world than Mexico and Canada, global supply chain shortages have proven the importance of staying close to end customers. Subsequently, many businesses have shifted their manufacturing locations to Mexico to provide customers with a localized experience along with gaining duty-free benefits under the United States-Mexico-Canada Agreement (USMCA).
Mexico is currently one of the top trading partners of the US, which is why it’s important to have connections and clear communication with a variety of port locations across either side of the border. An established 3PL services provider can connect businesses with brokerages, warehouses, consolidation points, and deconsolidation points all across the US, Mexico, and Canada.
Laredo, Texas, for example, is home to the busiest port between the US and Mexico. More than half of all US-Mexico trade passes through this point of entry, so having a skilled bilingual staff to communicate quickly and effectively is crucial for time sensitive, high pressure logistics situations.
Address visibility challenges
Maintaining real-time shipping status enables actionable insight and a smooth delivery process. However, shipment traceability tends to decline once cargo crosses the border, which can lead drivers into very dangerous situations. In the first half of 2022, robberies and hijacking accounted for 87.2 percent of cargo lost to theft in Mexico.
Experienced 3PL partners prioritize keeping a network of Customs Trade Partnership Against Terrorism (CTPAT) certified carriers. These carriers are trained to strengthen the supply chain, improve border security, and mitigate risks by identifying security gaps, implementing best practices and measures, and addressing challenges through action plans. In addition to alleviating the vulnerability of driving through unknown territory, CTPAT drivers benefit from reduced Customs and Border Protections (CBP) exams, access to Free and Secure Trade (FAST) lanes, shorter wait times at the border, and more.
The landscape of Mexican freight transportation is evolving, and industry leaders are working towards cross-border logistics technology that will provide the 360 view businesses desire. Until then, it’s important to keep the flow of goods and services moving by connecting with trained carriers who can address a broad range of security risks and avoid cross border logistics disruptions.
Having an efficient cross-border strategy in place is key to ongoing transportation success. Today, establishing a global footprint is not only favored by business owners with expansion in mind, but necessary to remain competitive through the future of unlimited market options.
Navigating the complexities of the supply chain, managing unforeseen circumstances, and delivering the expedited shipping experience consumers crave calls for an experienced 3PL provider. By leveraging the knowledge and resources 3PL partners offer, businesses ensure they are selecting the right carriers and services, maintaining real-time insight, and keeping cargo safe and secure.
Andrew Welling is the director of cross-border services at TA Services.