5 Ways To Successfully Manage Cross-Border Freight

As various forms of uncertainty and supply chain congestion continue to disrupt trade flows, the specialized logistics skills and infrastructure required to manage cross-border freight continue to be tested as never before.

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These disruptions experienced by many shippers are incredibly challenging — but they also provide some valuable insights into improving the efficiency of freight operations at the border.

This article looks at the unique demands of cross-border freight management and what companies can learn from the upheavals of this time in the supply chain.

Takeaways for the Future of Managing Cross-Border Freight

The U.S. Department of Transportation estimates that $1.57 trillion of transborder freight moved by all transportation modes in . The lion's share, $996.4 billion, was shipped by truck. Of this total, $435.7 billion and $560.6 billion crossed the U.S.-Canada and U.S.-Mexico borders, respectively.

Aside from the logistics of moving such massive volumes of goods, shippers must navigate jurisdictional differences between the national legal and freight systems involved. In , these demands were spotlighted by the phasing in of the United States-Mexico-Canada Agreement (USMCA), which replaces the NAFTA agreement. The biggest disruptor of all — and one that will reverberate for years to come — was the COVID-19 pandemic, which changed freight flows on multiple fronts.

But change also brings opportunity, and shippers can derive some crucial lessons from the above experiences that will help them manage their cross-border freight operations better. Here are five examples.

1. Agility and flexibility are vital attributes

Many of the changes that buffet freight networks are amplified at border crossings. For example, the COVID-19 pandemic upended product demand patterns, and measures to control outbreaks of the virus such as lockdowns hampered — and continue to hamper — manufacturing operations. Companies had to adjust the movement of raw materials, components, and finished goods across borders in response to these disruptions. Inventory levels fluctuated as companies battled to maintain steady supplies to manufacturing facilities without tying up too much cash in safety stock. The ability to make decisions on the fly is at a premium in these situations.

"Penske is well established at the borders, and this presence combined with our inventory management systems enabled us to help shipper clients flex up and down as needed," says Tracy Urbanski, senior vice president of operations for Penske Logistics.

2. Flexibility also means mix-and-match logistics choices

Just as cross-border logistics need to be flexible, so does the choice of logistics services required to support freight movements across borders. Some shippers need a complete management package covering every base, including documentation, cross-docking, inland ports, transportation and warehousing. Others may already cover one or more of these components and need expertise in specific areas such as working with customs brokers. Look for third-party logistics providers with the versatility and resources to tailor their services to individual shippers.

4. Local presence is non-negotiable

Given the number of parties and jurisdictions involved when shipping goods across national borders, having eyes and ears on the ground is a must, not a luxury. Moreover, these local connections need to be well established and strategically located.

Consider, for example, a management solution Penske has created for a shipper in the auto industry. It includes load tendering, track and trace, and carrier management for all U.S., Canadian and Mexican plants/containers, including Mexico/U.S. and Canada/U.S. cross-border movements. Some 116 associates at Penske locations in the U.S. as well as in Nuevo Laredo and Saltillo, Mexico, support the operation. Penske chose these locations to ensure that staffing is available where and when needed.

Local representation is especially important when dealing with unexpected disruptions.

"If a plant suddenly shuts down, we have to quickly figure out how to hold parts in transit, when to push the pause button and when to restart. It is difficult to do that without having personnel on the ground," says Urbanski.

5. Cross-border is forward-looking

Physical borders are static, but the freight traffic that flows through them, as well as the entities that manage this traffic and the rules that regulate it, are dynamic. In this ever-changing environment, planning ahead is essential.

For instance, "We work with many stakeholders including customers, carriers, and suppliers to get advance shipment notifications and prepare the documentation around shipments," says Urbanski. Penske uses a unique workflow tool to bring all the components needed to smooth the way for shipments together on a single platform.

Certainties Amid the Uncertainty

Many of the transborder-related changes wrought by the COVID-19 pandemic are permanent, while others will continue to play out over the foreseeable future. Also, freight management is evolving toward a digital transformation and will always be subject to various types of disruptions and regulatory changes.

However, one thing is sure: comprehensive infrastructure and technical capabilities, trusted working relationships, and flexible support services will continue to be integral to efficient cross-border freight operations.

For many companies, trade within North America presents a terrific opportunity for expanding their business to these vibrant markets. Underlying that is a dynamic, complex world of cross-border logistics that empowers such trade. It’s an intricate, involved dance of carriers, trucks, and trains — and a wide cast of supporting characters.

Of the nearly $11 trillion in trade that crosses U.S. borders annually, according to Customs and Border Protection (CBP), $2.1 trillion goes to buyers in Canada and Mexico. Our largest trading partners also represent the U.S.’s biggest export markets, at 17.5% and 15.8% of the total, respectively.

Trade and investment have grown across North America since The United States-Mexico-Canada Agreement (USMCA) was signed in June . As of , according to the Brookings Institution, trade volume with Canada and Mexico was 44% higher than with China, with whom the U.S. has a delicate and difficult relationship. The U.S.-China trade deficit remains significant, although it was slightly smaller than projected in November , the last month for which figures are available.  

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Behind the sheer scale of North American trade is the considerable block-and-tackle work each company needs to either embrace or hand off to facilitate cross-border logistics. This includes booking freight with a carrier, tracking a shipment’s progress – and sharing data for operations and inventory management – managing customs clearance, and coordinating handoffs between modes.

Companies often lack the internal resources or experience to handle the nuances of cross-border trade efficiently, leading many to seek an expert partner. Wicker Park Logistics, a services provider well-versed in all aspects of facilitating cross-border transportation, helps simplify the complex process for shippers.

The Maze of Customs – A Simplified Path Forward

Navigating customs paperwork for cross-border shipping is highly complex and one of the main challenges companies face. It involves preparing and submitting a host of necessary documents for carriers, partners, and customs officials, as well as managing compliance with each country’s regulatory requirements.

Errors or inconsistencies in customs documentation can lead to delays, fines, or even the seizure of goods by customs officials. Ensuring that all necessary paperwork is accurate and complete is vital.

Specifically, when exporting to Canada, it’s helpful for companies to apply for Non-Resident Importer (NRI) status to help expedite the cross-border process. They also must complete a Canada Customs Invoice (CCI) for each shipment detailing shipper and consignee info and merchandise value.  

For exporting to Mexico, the required documents include a bill of lading and a complementary document providing additional information, a Document of Operations for Customs Clearance (DODA), a commercial invoice, a carrier code, and a certificate of origin.

Import and export declarations include information about the goods being shipped, their value, origin, classification, and intended use. Proper classification based on the Harmonized System (HS), a standardized code for identifying goods in international commerce, is required for customs officials to accurately determine valuation and properly assess duties and taxes.

Import tariffs vary depending on the product type and the nature of the trade agreement between countries. It’s critical that customs paperwork accurately assigns a tariff classification for customs officials to assess the tariff fee.

Different countries have their own specific regulations governing cross-border trade. These include health and safety standards, environmental regulations, intellectual property rights, and trade sanctions. Ensuring regulatory compliance requires a deep understanding of the specific requirements for each type of product in each country.

Wicker Park Logistics provides both a “map” and a “compass” to help shippers navigate through this maze of customs clearance and paperwork. AI/ML-enabled customs clearance capabilities from Wicker Park streamline and optimize cross-border shipping, creating a more efficient customs process.

Speaking the Global Language of Shipping

Understanding the range of international taxes, duties, and taxes involved in cross-border logistics is a labyrinthine challenge for any shipper.  

These charges vary widely from country to country, each with its own laws and regulations. Making sense of this web calls for in-depth knowledge of the rules and procedures. While the USMCA has greatly reduced trade barriers within North America, customs, duties, and tax regulations are updated, and diligent monitoring is required.

Wicker Park Logistics acts as your “universal translator,” ensuring clear communication with North American customs officials and transmission of all required paperwork. This significantly reduces the risk of overpayment on cross-border fees or being cited for penalties and costs due to non-compliance.

Visibility in the Voyage

Supply chain visibility continues to be one of the most important aspects of cross-border freight logistics and the most challenging to accomplish. Without real-time data on a shipment’s location and status, companies have difficulty keeping commitments with B2B and B2C customers and managing inventory and order flow.

Advanced technology tools from Wicker Park Logistics update shippers on their cargo's cross-border journey. Its innovative transportation control tower system offers end-to-end visibility from door to door. Customized portals with full carrier integration provide companies with a dashboard view of all shipments, including updated delivery times, and the ability to optimize carrier capacity and improve spend efficiency.

Beyond that, Wicker Park Logistics provides personalized service and attention to detail across every aspect of cross-border logistics, from freight booking through documentation and customs clearance to final delivery and beyond.

A Great Business Expansion Opportunity, Made Simpler

Especially with the USMCA in place, the timing has never been better for companies to pursue business growth opportunities in Canada and Mexico. According to the Brookings Institute’s analysis, the agreement “is key to building a more competitive, sustainable, and inclusive North American economy.” However, having a trusted cross-border logistics partner is vital to success.

Wicker Park Logistics combines deep expertise with a technology platform that connects via API with your data sources, applications, and trading partners. Cross-border transportation is managed across a range of modes, including LTL and FTL, expedited, reefer, flatbed, dry van, intermodal, and warehousing and distribution services are available as well. Speak to an expert today.

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