Cross-border 🇺🇸🇲🇽Market Update 

September 2024, Vol. XIII

Monthly cross-border updates curated with insights from our experts. 

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At Nuvocargo, we simplify U.S./MX cross-border trade, shining a light into the black box at the border for greater control and visibility. In this edition, we recap August's highlights, including Laredo’s new payment rules and Mexico strengthening its position as the U.S.'s top trading partner. Looking ahead, September brings challenges and opportunities like peak shipping volumes and critical labor negotiations at East Coast ports. Plus, we analyze key developments in the trucking industry and highlight the importance of communication in achieving supply chain success.

Read on for some of the top trends and insights on cross-border trade, curated and analyzed by Nuvocargo’s team of experts.
Enjoy!

A look back: What happened in August?

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We are also happy to meet with you in Laredo and explain how we are bringing a new standard of service at the border.

Cross- Border 

Market Updates

The city of Laredo introduced a new policy requiring carriers using the World Trade Bridge to maintain a minimum $100 account balance. This initiative is designed to streamline toll payments and minimize delays at one of the busiest U.S.-Mexico border crossings. Carriers must now ensure they have sufficient funds in their accounts before crossing, which could impact logistics operations, adding an extra layer of financial planning to their cross-border activities.

Despite its significance, the trucking industry faces workforce challenges and demographic shifts. The sector is predominantly male (over 90%), though women now represent about 10% of drivers, up from 7.8% in 2018. The average driver age is 55, highlighting the need to attract younger drivers. Ethnic diversity is on the rise, particularly among Hispanic drivers, which is crucial for communication in diverse markets.
However, the industry is grappling with a significant driver shortage, estimated at 80,000 in 2021. This shortage, coupled with the demanding nature of the job and health challenges, has prompted efforts to improve work-life balance, enforce regulations on rest breaks, and explore technological advancements like Automated Driving Systems. These innovations could reduce the physical demands on drivers and attract younger, tech-savvy workers, ensuring the industry's continued contribution to the U.S. economy.
As the trucking industry evolves, its role in powering the economy remains more essential than ever.

Looking forward: What to expect in September?

Food for Thought: Inside the US-Mexico Trade Lane

Laredo Enforces New Payment Rule for Border Carriers

September typically marks a seasonal peak in shipping volumes as retailers prepare for the upcoming holiday season. This increase in demand for consumer goods leads to a surge in cross-border freight movements, especially in sectors like electronics, apparel, and automotive parts. The heightened demand can strain logistics networks, requiring efficient coordination between shippers, carriers, and customs brokers to ensure timely deliveries.

In the first half of 2024, Mexico has firmly established itself as the United States' top trading partner, with bilateral trade totaling $415.4 billion. Key Mexican exports include computers, passenger vehicles, and commercial vehicles, underscoring the country's growing influence in these sectors. Analysts predict that Mexico will continue to capture a larger share of U.S. imports from China throughout the year, driven by historical trends and current market dynamics.

Mexico Strengthens Its Role as the U.S.'s Leading Trade Partner

Diesel prices across the United States continued to decline for the second consecutive month, with the national average dropping to $3.70 per gallon as of mid-August, marking a decrease of over 5 cents from the previous week and nearly 7 cents year-over-year. All regions saw price reductions, with the Gulf Coast experiencing the most significant drop and the Rocky Mountain region the smallest.

By the Numbers: The Critical Role of Trucking in the U.S. Economy

In our latest expert's take, we spoke with Emily Honor Hubbard, founder of Empathic Engineering, about the crucial role of communication and culture in supply chain success, particularly between the US and Mexico. Emily shared, "Technology can streamline processes, but without understanding the cultural nuances, true efficiency is hard to achieve." Her insights align closely with Nuvocargo's mission to simplify cross-border logistics, especially in the context of the growing nearshoring and AI trends.

To learn how empathy, effective communication, and innovative solutions can transform your supply chain operations, watch the full interview above or read more on our blog.

Expert’s take: Streamlining Operations: The Role of Communication and Culture in Supply Chain Success

Continued Decline in U.S. Diesel Prices Across All Regions

The U.S. and Mexico continued to navigate disputes related to agricultural biotechnology under the USMCA framework. The U.S. raised concerns over Mexico's measures regarding genetically modified corn, especially those not intended for human consumption. A final report from a dispute settlement panel is expected later in the year, which could impact future agricultural trade relations.

Biotechnology Concerns and Agricultural Trade

East Coast Port Labor Negotiations

Seasonal Peak in Shipping Volumes

September marks the critical deadline for the contract negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), one of the largest expiring labor agreements this year. A strike would have a massive economic impact, potentially costing billions of dollars per day. Such a disruption at East and Gulf Coast ports could significantly affect the flow of goods, particularly those involved in US-Mexico trade. This would intensify the challenges posed by the seasonal peak in shipping volumes, leading to delays and escalating transportation costs as companies scramble to find alternative logistics solutions.

Truck Driver Appreciation Week 

This year, Truck Driver Appreciation Week will take place between the 15 and 21 of September, providing a crucial opportunity for the industry to focus on the challenges and contributions of truck drivers, particularly in the context of rising operational costs and driver shortages. During this time, companies may introduce initiatives to improve driver retention and highlight the importance of drivers in maintaining the supply chain's integrity, especially as freight volumes peak.

With Truck Driver Appreciation Week around the corner, it's the perfect time to recognize the vital contributions truck drivers make to the U.S. economy. Trucking is the backbone of our nation's freight movement and drivers are at the heart of it. Handling the majority of the nation's goods by weight and generating substantial revenue, the trucking industry is indispensable to keeping America moving. Here are some key figures that highlight the importance of this essential industry.