The US - Mexico border is open for business. With the transition from NAFTA to the USMCA (United States-Mexico-Canada-Agreement) in 2018, cross-border commerce, and logistics activities were improved and reinsured for years to come. The main points of the agreement center around IP protection, digital trade, tax thresholds, labor, and environmental obligations. With the structure for trade here in North America reinvigorated and the global political environment less stable, businesses are shortening their supply chains and choosing Mexico for manufacturing.
This increase in activity requires US 3PLs to expand into Mexico if they are to grow with their International and American customers. With the cross-border trade value at $577 billion (about $1,800 per person in the US) annually and over 20,000 3PL companies in the US, there is more than enough opportunity for US manufacturers and shippers to leverage Mexico to drive supply chain stability and grow profitability.
Despite the opportunity, US 3PLs have reservations about Mexico. There is a broad consensus that “Mexico is Complex.” When unpacking that a bit, 3PLs tell us three items make the US to Mexico coordination difficult for them:
- The Language Barrier
- Access to Trusted Mexican Carrier/Capacity
- Tedious Customs Process
G4 Logistics International has over 30% of its business with other 3PL providers. The complexity other 3PLs find is exactly where G4 Logistics excels. With operating entities in the US and Mexico, G4 Logistics can get goods door to door with firm upfront rates, lessening headaches for our 3PL customers for years.
Language Barrier
For US-based 3PLs, finding Spanish speakers that have managed international supply chain operations can be trying. Finding those skill sets coupled with a bi-cultural understanding of both markets can seem impossible. Both of G4’s operation centers in the US and Mexico have worked hard to build out bilingual and bicultural teams that appreciate the differences and can effectively anticipate customer needs with freight and manufacturing going both directions across the border.
Access to Trusted Mexican Carrier / Capacity
We have discovered we can add the most value to US-based 3PLs by removing the risk many have found trying to source Mexican carriers. Our Mexico City HQ coupled with a team that has over 30 years' of operating in the Mexican market, creates tremendous value for our 3PL customers and their end customers.
Tedious Customs Process
The 3PLs we work with find the customs process at the border difficult for three reasons beyond the language barrier.
- Understanding the requirements for the “Importer-of-Record" status of the consignee in Mexico is oftentimes overlooked.
- The VAT (IVA) application is often a surprise for US-based 3PLs that can add an unexpected expense to a door-to-door shipment southbound to Mexico
- Pricing that changes beyond the initial quote due to unforeseen or misunderstood accessorial charges (transfer fees, detention, etc.) is what we hear about the most when speaking with 3PLs and manufacturers
At G4 Logistics International we are purpose-driven to provide our customers with phenomenal service no matter where they are. We have operated in the US-Mexico market consistently for 30 years. Our ability to make Mexico simple for other 3PLs while remaining behind the scenes has created significant value for all involved. We look forward to continuing to grow our white-labeled cross-border customer base by delivering consistent and reliable freight solutions where needed.