Nearshoring: What Carriers Need to Know About Transporting Freight Across the Mexican Border, Ease of Crossing and Cargo Theft Prevention

NMFTA - January 15, 2025

The United States’ number one trading partner is Mexico, even with the changes in Administration we know Mexico will play a critical role in our supply. Transporting freight across the Mexican border often involves coordinating multiple carriers, customs brokers, and transloading facilities.

For carriers tasked with transporting goods to and from Mexico, understanding border dynamics and on-the-ground realities is essential for success. That starts with an understanding of legal requirements, particularly the Standard Carrier Alpha Code (SCAC) assigned to the industry by NMFTA. SCAC identifies carriers transporting freight on each side of the border. Mexico has its own equivalent known as the Carrier’s Harmonized Alphanumeric Code. It is critical that carriers of all sizes have a SCAC for border crossing with their goods.

Additionally, the Free and Secure Trade Program (FAST) allows expedited processing for commercial carriers if they can pass security and background checks. Its purpose is to make it quicker and simpler for low-risk shipments to cross the borders between the U.S. and Canada and the U.S. and Mexico. You need a commercial driver’s license (CDL) from one of the three countries to get a FAST pass.

“Drivers with a FAST pass are most preferred,” said Danny Xu Wenayo, North America product team lead for CrimsonLogic. “Other documents like commercial invoices, eManifest coversheets and other documents related to the cargo are essential.”

Partners are Paramount. Experienced professionals who know the situation say U.S. carriers— especially those who are new at venturing into and out of Mexico—must form a strategic partnership with a Mexico-based carrier.

“They’ll have to create a formal interchange agreement with a Mexican carrier,” said Gabriel Guajardo, southern border director for Echo Global Logistics. “That carrier will take the dry van in Laredo, TX and take it into Mexico under a temporary bond. The carrier will then procure northbound freight, fill up that dry van and move it up into the United States to work in conjunction with the carriers.”

Why shouldn’t U.S.-based carriers just take the freight across the border into Mexico and pick up northbound cargo themselves?

“It’s just a lot more complicated,” Guajardo said. “First, the alternative would be that you’re running a U.S. tractor into Mexico. I don’t think that’s particularly a good idea. You’d have to find U.S. drivers who want to travel into Mexico, which is not very practical. The normal mode is that the U.S. carrier brings it to Laredo, TX, drops off the trailer and then the Mexican carrier picks it up.”

For U.S. carriers looking to identify a Mexican partner, Guajardo urged extensive due diligence.

“Run their credit reports, go through all the proper channels—Dun reports, look at the history on their MC,” Guajardo said. “And the most important requirement would be to see if they’re participating in the C-TPAT program, which would give you another level of validation to ensure you’re dealing with serious carriers.”

C-TPAT stands for Customs-Trade Partnership Against Terrorism, a supply-chain security program led by U.S. Customs and Border Protection (CBP). Companies who achieve C-TPAT certification must have a documented process for determining and alleviating risk.

Holly Pearce, director of logistics and warehousing for Otis Elevator Co., has extensive experience navigating Mexican border issues from the shipper’s perspective. This experience has provided valuable insights into how carriers should approach building partnerships with Mexican counterparts.

“They have to be in it for the long haul, because there are great Mexican trucking companies that are already established, and you can partner with them as a carrier to do that kind of cross-border agency,” Pearce said. “But as shippers—as a manufacturer having worked in retail—I’m looking for the longevity, the ability for a partner to help us grow our business.”

Pearce also explained that the impact of nearshoring has not been as quick as many expected.

“You have to build equipment to manufacture in Mexico,” she said. “You must establish your warehousing and your DC supply chain. People thought that, with COVID, that would be instant.”

Progress is being made on these fronts, including infrastructure improvements like the expansion of the main bridge at the Laredo crossing from eight to 16 lanes. Laredo remains the most popular of the 48 U.S./Mexico border crossings, thanks to its strategic proximity to key Mexican cities such as Mexico City, Monterrey, and Guadalajara. But if cross-border trade between the U.S. and Mexico continues to grow as many believe, more infrastructure investment will be necessary.

“It’s going to grow considerably,” Guajardo said. “There will be a need to expand the infrastructure, and that relates to warehouses on the U.S. side and buildings on the U.S. side.

Laredo is steadily expanding, with approximately 3.8 million square feet of warehousing—an increase of 28 percent—and more growth on the horizon. As infrastructure develops, Holly Pearce sees significant opportunities emerging for U.S.-based carriers.

“There are opportunities at Laredo specifically,” Pearce said. “About 60 percent of all northbound and southbound freight volume goes through Laredo, so that’s where any carrier looking to establish themselves should focus. There are lanes, there are drivers, and there’s a big pie to share—in addition to the infrastructure.”

To learn more about SCAC, or to ask our customer service team questions regarding your SCAC, contact customerservice@nmfta.org.

NMFTA
NMFTA

The National Motor Freight Traffic Association promotes, advances, and improves the welfare and interests of the motor carrier industry and less than truckload carriers operating in commerce, both domestically and/or internationally.