From implementing technology solutions to understanding tax implications of cross-border movements
Shippers need a seamless process when moving goods between the United States and Mexico, and the handoff is critical. Historically, a black hole existed at the border, which is especially challenging given the many parties involved in a crossing.
Even on a typical day, a full North American solution requires transparency and integration to ensure all documentation and movements are completed properly and goods stay in motion. Weather, political events, cyberattacks, violence and supply chain challenges all have the potential to create unexpected border disruptions.
Cross-border shipments are complex with multiple partners involved, including the shipper, the carrier picking it up, the carrier delivering it to the border, the carrier taking it across the border, the handler at the border, U.S. Customs and Mexico Customs. “Each party needs to know what the party before them did,” said Bob Black, managing director, Mexico, for Penske Logistics.
A key component of being tactically agile is understanding future needs, Black said. That could mean having the ability to move from a planned crossing point to another, which requires pre-established customs broker relationships. “You have to have a customs broker at the port, and you have to go through steps to get that assigned. We can do that ahead of time to create flexibility,” Black said. “A crisis happens with short notice.”
It is also helpful to have a drayage carrier familiar with a particular area. "We have relationships with numerous drayage carriers. They'll be able to service us on short notice," Black said. “Finding carriers with capacity is critical.”
The key to creating a reliable contingency plan is to understand who needs to be involved in attacking the issue so that they can get involved quickly, Black said. “When the unknown occurs, we have the experience, drive and dedication to find those solutions, and the linkage of our team is imperative.”
When the big freeze in Texas hit in 2021, it extended into the border region. Power outages were common, but Penske has invested in on-site power generation and was able to keep its Los Indios location operating. "The challenge was fuel. None of the local vendors had it, but we could get it through the Penske Truck Leasing side of the business," Black said. "They could refuel us so we could execute operations."
The pandemic and related supply chain disruptions have also emphasized the need to remain agile. “Penske played a valuable role in making accommodating changes,” Black said, adding that many shippers are uncertain about the future. “One comment we’ve heard is, ‘I’ve spent 25 years to lean out my supply chain. Now I’m being told to find space.’”
The Need to Nearshore
Black anticipates seeing growth in Mexico, especially as shippers shift from lean and just-in-time inventories. Many shippers are also investigating the benefit of nearshoring as they evaluate their supply chains.
Penske supports customers at various locations along the border, including El Paso, Los Indios and Laredo, which is the largest inland port in North America. “If you visit it, some people describe it as one large truck stop because there are so many trucks going back and forth,” Black said. “One of our differentiators is longevity in the major crossing port of Laredo.”
For both new and existing customers, Penske works with shippers to determine their needs, which can range from implementing technology solutions and handling bonded freight to managing drayage and understanding tax implications of cross-border movements. Penske is also launching a new workflow technology to draw all parties together and increase visibility.
To learn more about Penske cross-border offerings, contact us today.