Cover Story
New growth , new networks
More efficient infrastructure needed as US-Mexico trade rises
By William B . Cassidy
Rapid growth in US-Mexico trade is forcing a maturation of cross-border supply chain networks that logistics executives say will be critical as freight volumes rise .
New warehouses and logistics facilities are opening almost weekly at freight crossings such as Laredo and El Paso , Texas . But those facilities are only the tip of the spear .
Behind them lie complicated communication and transportation lines linking those nodes that form cross-border supply chains . Those networks take more work to build than the nodes themselves . And the strength of those networks is becoming more critical .
The networks taking shape today are more diverse , transparent and intermodal than those in place before the COVID-19 pandemic , shippers and their logistics partners say .
Shippers that once relied on one or two border crossings now must consider multiple lanes and crossings as well as greater use of intermodal rail and other modes .
Despite the number of new logistics centers and warehouses going up , the number of border crossings is finite and difficult to expand . That makes more efficient networks , powered by technology , key to creating the capacity needed to keep up with trade .
“ Building and expanding networks drives scalability .”
From January through September , the value of US trade with Mexico reached $ 632.3 billion , 36.5 % higher than the same period in 2019 , according to US Census Bureau data .
The number of northbound trucks entering the US from Mexico is rising , too , climbing 18.1 % in the first nine months of 2024 compared with the same period in 2019 , according to data from the US
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Bureau of Transportation Statistics .
There are only 21 truck border crossings along the US-Mexico border . Efforts are underway to expand the number of lanes at some crossings , but construction takes time .
“ Building and expanding networks drives scalability ,” said Mike Burkhart , vice president for Mexico and Canada business at third-party logistics company C . H . Robinson Worldwide . And scalability is needed to keep up with increased cross-border freight demand .
“ However , it ’ s also important to build contingences in the event that a portion of your network changes ,” Burkhart told the Journal of Commerce .
Border crossings can be shut down or become congested quickly thanks to inspections or customs systems failures .
New partnerships
More action is taking place outside the warehouse walls . Global freight forwarder Gebrüder Weiss , for example , is partnering with Cargado , an invite-only cross-border load board . Its goal is to make cross-border shipping more interconnected and transparent .
A major difference between 2024 and the pre-pandemic era is the availability of better visibility tools , said Joe Aguirre , director of southern border solutions for Gebrüder Weiss in El Paso . “ We need to know if and when we might need another 300 trucks ,” Aguirre said .
Cargado will help provide that visibility and greater access to truckload capacity .
The need for greater supply-chain visibility extends beyond the US-Mexico border , said Aguirre . “ If it takes a vessel five days longer to reach a port than scheduled , that can dramatically affect a customer ’ s production at factories in Mexico ,” he said .
When container ships backed up in Long Beach and Los Angeles recently due to high volumes , Gebrüder Weiss diverted some cargo to the Mexican port
14 Journal of Commerce | November 18 , 2024 www . joc . com