They say the grass is greener on the other side of the fence, but in terms of shipping, this is definitely not the case for goods bound for Mexico. Cross-border shipping carries inherent risks that often can’t be avoided. From differing rules and regulations to theft, it’s best to equip your business with partners who know the ins and outs of shipping on both sides of the border.
Mark Vickers, Reliance Partners’ executive vice president of international logistics, teamed up with Troy Ryley, president of Redwood Mexico, to share best practices for improving cross-border trade and risk management.
The latter should be addressed first when considering operating on the other side of the U.S. Southern border. It goes without saying that safety remains the top concern for carriers in Mexico, especially in its central and western regions.
Over 5,000 cargo thefts were reported in Mexico during the first half of 2021 alone. According to Mexico’s National Public Security System, the items most often stolen include food and beverage items, clothing and footwear, auto parts, steel, tires, and alcoholic beverages.
This poses safety risks directly to the carriers, but the shippers themselves can equally suffer — financially, at least. Vickers has discussed this in previous articles with FreightWaves, comparing Mexico’s freight insurance requirements to the “Wild West.”
Keep in mind that carrier liability in Mexico is nearly nonexistent, as carriers aren’t required to provide coverage for shipments, leaving shippers on the hook for damages. Consider this: U.S.-based motor carriers can be liable for up to $1 million in cargo loss, while Canada-based carriers have a maximum liability of $2 per pound of freight. In contrast, Mexico only requires carriers to be liable for $0.025 for every pound transported.
It’s for these reasons that Ryley urges shippers to utilize cross-border insurance to mitigate risks south of the border. Although beneficial, preventative measures like carrier vetting, trailer-tracking technology and increased security at facilities are only effective to an extent.
“The bad guys are smart,” Ryley said. “They have jamming units; we’ve seen jamming units that’ll actually jam the signal for any kind of tracking device, whether it be inside or outside the vehicle.”
He reasoned that transferring risk away from theft is hard when it’s rampant across the country. Moreover, Ryley said it can be very difficult to recover stolen assets.
“Reliance Partners has been a fantastic partner, providing us with quick, accurate, timely and responsive quotes,” Ryley said. “We feel very comfortable recommending them to major clients of ours, to Fortune 500 companies when we need that type of coverage.”
Borderless Coverage powered by Reliance Partners provides cross-border cargo insurance for the price of only a fraction of the load value. Not only is it relatively inexpensive, but the coverage extends to both domestic and international shipments of all varieties.
U.S. shippers have found it incredibly easy to deploy each of their loads to Mexico using Borderless Coverage’s shipper’s interest usage-based insurance because of its ability to provide all-risk full or partial value coverage for their products in Mexico and around the world.
“We created Borderless Coverage specifically for shippers, brokers and carriers that needed Mexican cargo insurance; however, we built it on an international platform, so you can get coverage from pickup to delivery anywhere in the world,” Vickers said. “Our number one use case just happens to be Mexico because of all of the uncertainties that Ryley has discussed.”
With the right coverage in place, shippers can enter the Mexican market with confidence, which allows them more time to improve their cross-border operations. The growing need for even greater digital logistics has, in turn, led many shippers and carriers to Redwood.
The border affects shipping in many ways other than safety. Discrepancies in regulations and business practices, not to mention language and culture, often induce headaches for shippers.
“I have called it a black hole for years,” Ryley said. “The problem is that you’ve got so many points of contact, including both U.S. and Mexican carriers, processing agents, U.S. and Mexican customs brokers, Mexican forwarders, and shippers at the origin point, all of which nobody’s been able to bring together. That’s what we’re doing at Redwood.”
Redwood’s technology suite provides users with trucking visibility into U.S. and Mexican carrier operations. This suite includes LoadRunner TMS and its intuitive Logistics Platform as a Service (LPaaS), which offers plug-and-play logistics technology and freight services to fit your cross-border needs.
“We can connect anyone to anything,” Ryley said, describing its open logistics ecosystem, which offers both real-time, API-lead digital logistics and 3PL services, as well as platform services to implement and integrate your data supply chain.
“We’re incorporated in both Mexico and the U.S. and are fully functional as a cross-border truck brokerage business,” Ryley said. “Redwood also handles U.S.-Mexican customs brokerage as part of our operations, warehousing distribution, along with a slew of other services, including technology solutions.”
Vickers stated that the best way for global shippers to access all-risk, shippers’ interest cargo insurance in Mexico is through their top freight brokers like Redwood. “It’s great to have a partner like Redwood who understands the technology associated with visibility and the technology now associated with cargo insurance.”
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