The cross-border transportation and logistics industry faced unprecedented disruption in 2020 due to the COVID-19 pandemic, as well as changes brought on by the United States-Mexico-Canada Agreement (USMCA).
Following are some observations from brokers, trade analysts and freight-tech providers relating to cross-border operations moving into the new year.
Deepak Chhugani, founder and CEO of Nuvocargo: “Mexico is now the U.S.’ No. 1 trade partner. The China-U.S. trade war, as well as the COVID-19 pandemic, are driving more U.S. companies to establish new supply chains and we anticipate explosive growth as Mexico becomes the new China. Companies are nearshoring and moving their U.S. supply chains closer to home in favor of Latin America and more specifically Mexico. The automakers especially should continue to see a big boom and reliance on Mexico as it favors homegrown manufacturing. The auto industry will continue to see a shift, in particular the Bajio region of Mexico, which is flush with trucking capacity.”
Troy Ryley, president of Redwood Mexico at Redwood Logistics: “Outlook for 2021 is that market conditions will remain challenging. The cross-border disruptions that have been prevalent this year will bleed into next year. Freight volumes will rise as shippers are expected to bring production levels back to 100% driving increase in transportation rates. The fourth quarter of this year has proven to be very busy for cross-border operations. Laredo has been one of the hottest markets in the entire U.S. in recent weeks. Market conditions remain extremely challenging as we close out the year and they are anticipated to remain the same through much of 2021.”
Steven Hirsch, regional manager at Nolan Transportation Group (NTG): “There is a wide variety of freight moving between Mexico-U.S., but NTG’s cross-border business has primarily been auto parts, produce, and canned/dry foods. There are still so many questions regarding what 2021 will look like. COVID-19 has had such an impact all over the world, so whether demand will surge or flatten out is still unknown. The one thing we anticipate is there will be a lot of volatility, especially in the first and second quarter of 2021. We will continue to see shipments from Mexico to the U.S.; the big issue is the return routes and getting these drivers back. Over the next couple years, you will see the steady increase in outbound shipments from Mexico.”
Ed Habe, vice president of Mexico sales, Averitt Express: “With the new USMCA, all indications are that freight levels will surge between the U.S., Mexico and Canada. Cross-border trade has always been dominated by automotive-related products. We are seeing more consumer goods flowing into Mexico from the U.S. and finished products coming out of Mexico. Aeronautic industries have sprouted up in different areas of Mexico, such as Chihuahua and Queretaro. Appliances, including washing machines and refrigerators, are also coming out of Mexico to the U.S. We have already seen freight shipment levels bounce back from the negative effect of COVID-19 on trade when all of the automotive plants shut down in April. I am confident we will continue to see trade grow into and throughout 2021.”
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