Uber Freight report says cross-border trucking showing continued resilience
While the road ahead stays rocky for many segments of the worldwide trucking sector, nearshoring of producing to Mexico will proceed to spice up cross-border freight flows in North America, in line with Uber Freight.
The digital freight brokerage service recently released its second-quarter update on global freight markets, which points to more exports from Mexico to the U.S. this yr.
“The opening of recent manufacturing firms within the country on account of nearshoring is anticipated to affect the market imbalance between northbound and southbound shipments,” the report said. “Mexican portions may face inflation again as demand for exports increases.”
Ben Enriquez, Uber Freight’s head of Mexico logistics and customs, said cross-border trucking can be stronger through the second quarter in comparison with domestic trucking within the U.S.
“Cross-border can be more resilient. There are a number of manufacturing firms [in Mexico] which can be shipping direct to U.S. distribution centers for consumers,” Enriquez told FreightWaves.
Within the U.S., manufacturing output shrank 1.1% yr over yr (y/y) in March. Manufacturing output, which has fallen over the past six months, shows no signs of accelerating through the second quarter, Uber Freight said. It expects the lower U.S. manufacturing output to translate into lower freight volumes.
Enriquez said while Uber Freight expects to see a slight decrease in exports from Mexico to the U.S. through the yr, the arrival of more manufacturing firms in Mexico is having a positive effect on freight movements.
Mexico has been experiencing a nearshoring boom and expansion of foreign firms available in the market, led by Texas-based automaker Tesla’s plan to construct a $5 billion electric vehicle factory near the Mexican city of Monterrey.
“We’re seeing decreasing volumes from a few of our old customers, but there are recent customers which can be also settling in Mexico, so we expect that’s helping trade,” Enriquez said.
One other key difference between the U.S. domestic market and cross-border trade is obtainable capability, in line with Uber Freight.
“The market stays oversupplied as freight capability stays resilient and demand falls,” the Uber Freight report said. “Despite a stronger-than-expected January, truckload demand continued its downward trend, and was 1% lower y/y in Q1, while supply was 7% higher as trucking employment remained strong.”
As compared, Enriquez said freight capability in Mexico could tighten down the road as more manufacturers ramp up production and want truck and intermodal service.
“There’s going to be some extent where customers which can be slower right away or have lower volume, while these recent customers are beginning to ramp up, when all of them start ramping up, then that’s when lack of apparatus goes to occur,” Enriquez said. “Shippers need to be ready with their carriers to provide all freight service they need, together with different modes of transportation and border crossing points, etc.”
Other aspects that may impact U.S.-Mexico trade this yr includes cargo theft and the enforcement of Mexico’s Carta Porte bill of lading complement for customs brokers, Enriquez said.
The Carta Porte complement is a digital tax document issued to shipments geared toward protecting the transfer of legitimate goods across Mexico. The complement went into effect in January 2022, however the Mexican government postponed enforcing fines and penalties due to errors within the document until August.
“I believe that carriers by this time must have had enough time to prepare for the Carta Porte, but there’s still going to be challenges,” Enriquez said.
Mexico also recorded greater than 10,000 cargo theft incidents through the third quarter of 2022, the Uber Freight report said.
“One in every of the massive challenges we’re seeing today in Mexico is the safety of the highways,” Enriquez said. “If we have a look at a lot of the theft that’s being done today, it’s happening in the inside of Mexico, between Mexico City, Puebla and Guanajuato.”
Enriquez said Mexican authorities should take cargo theft more seriously.
“We’re seeing that it’s increasing and arranged crime must be one way or the other controlled because cargo theft is increasing in lots of industries, especially consumer packaged goods and foods,” Enriquez said.
3PL secures $100M to expand network of cross-border warehouses
San Diego-based XB Success recently received $100 million in private equity funding, which it would use to speed up expansion of its logistics warehousing, in line with a news release.
The funding got here from Los Angeles-based Caprice Capital Partners LLC and follows an earlier 2021 funding round.
Founded in 2014, XB Success is a 3PL that services e-commerce platforms, providing achievement and warehousing services. XB Success enabled its customers to deliver over 22 million orders to their U.S. consumers last yr, the corporate said.
XB Success currently has 4 warehouses in Mexico and plans to make use of the brand new funding to expand its capability by 60% and broaden its geographical presence. The corporate didn’t specify what number of warehouses can be a part of the expansion or their locations.
Pepper puree manufacturer opens production hub in Recent Mexico
Recent Orleans-based Louisiana Pepper Exchange, a world chile pepper company, recently announced plans for a processing and distribution facility in Santa Teresa, Recent Mexico.
The brand new facility can be situated on a 10-acre site on the Ironhorse Industrial Park. The investment will include a 40,000-square-foot processing facility together with space for tank farms that may store 30 million kilos of pepper mash on the market and distribution throughout the U.S.
Officials for Louisiana Pepper Exchange cited Santa Teresa’s strategic transportation benefits in processing pepper imports from Mexico and Central America as one among the explanations for selecting the location.
“Santa Teresa is the proper location for Louisiana Pepper to thrive,” Zach Foster, the corporate’s chief financial officer, said in a news release. “It’s a rail-served industrial park with an obese truck zone that may support our supply chain out of Mexico.”
The corporate didn’t specify when the brand new facility will open. Louisiana Pepper Exchange produces pepper ingredients for industrial food manufacturers, restaurants and residential kitchens.
26 killed in crash involving tractor-trailer in Mexico
A collision between a freight truck and passenger van in northern Mexico left 26 people dead, in line with Reuters.
The accident occurred May 14 on a highway near Ciudad Victoria, which is situated within the Mexican state of Tamaulipas along the U.S.-Mexico border.
Mexican authorities said it’s unclear what caused the collision between the tractor-trailer and passenger van, nevertheless it began a fireplace that engulfed the van.
The tractor that had been pulling the freight trailer was not found on the scene. Authorities said they were investigating if the motive force uncoupled the trailer and fled the scene or if he was also killed within the accident.
Watch: How the brand new forecast affects large carriers.
Mexican government urges Texas to halt truck inspections at border
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