Logistics providers increase focus on Mexico

Possible Mexican sourcing boom and continued snags on the U.S.-Mexico border lead logistics firms to beef up services in the region

By Dave Hannon -- Purchasing, 8/22/2007 7:34:00 AM

Logistics providers are expanding their services in Mexico, possibly anticipating a renewed interest in sourcing products from Mexico. Or it might just be that the existing process for getting products across the border from Mexico to the U.S. is so difficult, shippers need more 3PL-type services in the regions.

“It’s like the Middle Ages,” Celadon Group’s CEO Steve Russell told Reuters about the U.S.-Mexico border’s current state. U.S.-licensed trucks may not enter Mexico and Mexican trucks may not enter the U.S. "This makes no sense in an age of globalized trade," Russell said.

At the same time, some supply chain experts are hinting that in the wake of the China sourcing scares and increasing logistics costs, Mexican suppliers may be seeing more business in the near future.

In either case, logistics providers are making clear efforts to step up their offerings around the U.S.-Mexico border. In July DHL introduced a new cross-border service based out of Harlingen, Texas, capable of handling triple the volume of its previous offering as well as heavier palletized freight and non-conveyable material to meet the growing logistics needs in the Rio Grande Valley and Northern Mexico regions.

"Harlingen's strategic location on the U.S.-Mexico trade corridor has significantly contributed to the city's development as a distribution, shipping and industrial center for international trade," said Lindsay Birley, executive vice president of international products and services for DHL.

Con-way Freight in mid-July acquired truckload carrier CFI, saying “combining CFI's network, experience and expertise with Con-way Freight's Mexico network and Menlo's in-country and border-based logistics operations significantly improves the combined company's presence and capabilities in Mexico.”

On Monday, Averitt Express opened a new supply chain solutions facility in Pharr/McAllen, Texas only four miles from the U.S./Mexico border. Because the new facility is so close to the border, Averitt can begin processing their customers’ freight and transloading goods for nationwide distribution faster than ever before.

Most recently, FedEx has expanded its FedEx Transborder Distribution service for cross-border trade between Mexico and the U.S. by opening new facilities in Ciudad Juarez, Mexico and El Paso, Texas to help facilitate the flow of goods. 

"With this expanded cross-border solution, FedEx looks to simplify the supply chain process by managing the transportation, brokerage and distribution of shipments that cross the Mexico-U.S. border on a regular basis," said Ed Clark, CEO of FedEx Trade Networks. "The vision is to create a single point of contact to facilitate the efficiency of the entire process."

See also: Mexican trucks won't enter U.S. until U.S. trucks enter Mexico

See also: Sourcing in Mexico gets easier