Cross-border LTL: How it’s different from domestic freight and how to succeed at the border
Authored by SMC³ on May 17, 2022
Transporting freight across national borders comes with considerations many LTL carriers might not be familiar with. Customs broker Federico “Kiko” Zuniga listed a few of them in a recent SMC³ LTL202 educational session: new and evolving trade agreements, constant sanctions, changing embargoes – “on and on and on,” he said.
Even so, truck freight across the U.S.’s international borders is higher than ever. In 2021, about $828 billion in freight crossed the Canada and Mexico borders on trucks – the highest single year on record – making up for the 10% dip caused by the COVID-19 pandemic. American nearshoring (where manufacturers move their manufacturing from distant countries to closer regions to conserve resources) from China to Mexico has been in flux for the past couple of years, laying ground for manufacturers to have more nuanced conversations around where they manufacture and send their goods.
As shippers continue to tap these cross-border markets, carriers who want to accept that freight need to be ready for everything that carrying cross-border freight entails. In “LTL202: Navigating the Complexities of LTL Cross-Border Trade,” industry professionals discussed some of the biggest hurdles and how LTL carriers can overcome them.
How cross-border LTL differs from domestic LTL
Carriers who bring freight across borders might be surprised at the formalities involved in transportation. Compared to carrying within the U.S., there are many more factors to consider, roles to account for and boxes to check to successfully transport freight across an international border such as:
- Documentation: Cross-border freight requires more documentation than U.S. domestic transportation. Some of the additional materials required can include a Certificate of Origin, Bill of Lading and Commercial Invoice.
- Customs: The extra documentation you need at the border is often to satisfy the customs requirements of the country to which you’re moving freight. They let customs agents know the exact nature of the goods you’re carrying across the border, ensuring you’re not carrying any restricted items (as determined by the country you’re carrying to).
- Drayage: Drayage is the process of moving cargo from one side of a border to the other. Usually, it’s carrying the freight a short distance from one carrier to another (including intermodal shipments). There are companies at the U.S. and Canada borders that offer this niche-but-crucial service to cross-border carriers.
Cross-border freight transportation is also subject to border politics, which professionals say can add more strain to an already tough process.
Olga Salinas, SVP Business Development at Redwood Logistics Mexico, said that American immigration policy changes, like the removal of Title 42 in early 2022, create a “perfect storm” for cross-border transportation between the U.S. and Mexico. Between capacity constraints, driver shortages, customs staff shortages, rising transportation and fuel costs, slumping productivity levels and increasing demand for international trade, even simple border crossings can take hours. “It creates a huge bottleneck,” Salinas added.
How to successfully carry freight across borders
Even though the mechanisms of cross-border transport are different from domestic freight, the principle of ‘point A to point B’ still applies at the border – and so do the factors that drive value. “Cost, timing and visibility are top priorities in the cross-border supply chain,” said Salinas.
To help ensure seamless service that is mutually beneficial to both sides of that supply chain, carriers need to line up their documentation and know the transportation company on the other side of the border. Often, that means working with a customs broker.
Just like in domestic LTL, building relationships with the groups you work with is key to success at any land border. “Everyone in the chain needs to understand what’s required,” Zuniga said. “It’s important to have a good working relationship with your partners.”
- Carrier + carrier: Know the supplier who will be carrying the freight you’re taking across the border. Do they have experience in cross-border transportation? What’s their track record with customs? For Mexico-bound cargo, Salinas advised having “boots on the ground in Mexico” – contacts who can understand the complexities and roadblocks to freight movement within Mexico.
- Carrier + shipper: Make sure your customer knows the factors that could affect their shipment costs and timing. Give them information on anything that could affect the movement of their goods, from changing regulations and port issues to surges in business or pricing. Most customers will understand if they’re given context, but no shipper wants to be left in the dark.
- Carrier + customs broker: Accurate information makes things move, but Zuniga said good carrier/customs relationships grease the wheels: even if they’ve worked with the same carrier in the past, “Mexico brokers want to validate everything until they have a relationship.”
SMC³ Bid$ense makes it easy for carriers to find the right cross-border freight and help shippers find carriers for their cross-border shipments. Find out more here.