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Journal of Commerce: “Rising Mexican Container Trade Squeezes Truck Capacity at U.S. Border”

May 27, 2016

Rising Mexican Container Trade Squeezes Truck Capacity at U.S. Border

The arrival of more trans-Pacific freight at Mexican ports is contributing to a growing imbalance in truck capacity on the U.S.-Mexican border. That in turn is fueling growth in transloading at Laredo, the largest U.S.-Mexican truck border crossing, logistics executives say.

As cross-border trade grows, finding and positioning equipment is becoming a challenge for some shippers in Mexico, whether ocean containers or 53-foot trailers.

Shippers that want to move full trailerloads from Mexico direct to U.S. destinations with just an exchange of tractors at the border are going to have a harder time finding scarce U.S. equipment in Mexico and increasingly pay a premium for “throughput” service. “

Almost all shippers of large northbound volumes are being forced to pay to relocate empty equipment to Mexico to keep the supply-chain moving,” Jordan Dewart, who was named president of Yusen Logistics Mexico earlier this month, said. “If you refuse to transload your cargo at the border, you will start to pay a premium of 25, 30 or 50 percent over everyone else. The difference is huge.”

The pool of U.S. equipment available in Mexico for northbound shipments is “evaporating,” said Troy Ryley, managing director of Transplace Mexico. That means more business for Mexican truckers, who also benefit from the strength of the U.S. dollar compared with the Mexican peso.

Read more here.