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Is Cross Border Logistics The Right Choice for Your Company?
Is Cross Border Logistics The Right Choice for Your Company?
Is Cross Border Logistics The Right Choice for Your Company?
Is Cross Border Logistics The Right Choice for Your Company?
Is Cross Border Logistics The Right Choice for Your Company?

Is Cross Border Logistics The Right Choice for Your Company?

July 7, 2023
Under the Section 321 statute, companies can ship orders valued at $800 or less from Mexico or Canada to the U.S. duty-free, resulting in millions of dollars in cost savings.

Cross border interactions between the US, Canada and Mexico increased by 19.1% across all modes of transport, as compared to 2021, according to the Bureau of Transportation statisitics:

Other statistics are as followed for the period comparing July 2022, to July 2021:.

  • Total transborder freight moved by all modes of tranporation totaled: $132.6 billion/ 
  • Freight between the U.S. and Canada totaled $67.4 billion, up 21.0% from July 2021
  • Freight between the U.S. and Mexico totaled $65.2 billion, up 17.2% from July 2021
  • Trucks moved $77.5 billion of freight, up 12.9% compared to July 2021
  • Railways moved $17.5 billion of freight, up 11.3% compared to July 2021 

When determining if a company should expand its logistics in Mexico or Canada, many factors come into play. In a  blog, Tompkins Solutions reviews some of those factors:

Product Values and Types: How much does a customer typically spend per order? Under the Section 321 statute, companies can ship orders valued at $800 or less from Mexico or Canada to the U.S. duty-free, resulting in millions of dollars in cost savings.

In addition to order values,it’s also important to consider the types of products you’re shipping. For example, food and beverage items may lose quality when exposed to varying temperatures and are also one of the top targets for cargo theft, which can create additional challenges when shipping across borders.

Service-Level Agreements (SLAs): While both Mexico and Canada share long land borders with the U.S., going through customs can add an extra day to transit times, so companies that have strict 2-day delivery guarantees may not be able to meet customer expectations.

Additionally, crossing the border out of Mexico typically takes longer than it does from Canada due to less entry points, more congestion and a higher number of drivers and/or trailers involved in each shipment.

Real Estate and Labor Rates and Availability: Acquiring and affording warehouse space and labor continue to create challenges for logistics operations in the U.S., with experts predicting ongoing shortages and rising costs to remain through 2024.

While these trends are also occurring across North America, lower labor rates and increased investments in industrial developments could create opportunities for companies looking to expand fulfillment operations into Mexico.

To view more factors click here. 

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