Cross-border 🇺🇸🇲🇽Market Update 

March 2024, Vol. VIII

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

Happy Shipping!

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 month's edition, we look at the expansion of Port Laredo since 2023; Josefina Blanco, our Head of Legal & Compliance, explains CCP 3.0, a detailed analysis of what the produce season does to freight by our data team, an interview of our CEO Deepak Chhugani and Head of Strategic Accounts Danny Gordon by Thomas Wasson from Freightwaves about nearshoring logistics, and how companies are investing in AI models to ease the load of their supply chains.

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

Highlight Trend of the Month

To learn more on our offering please click here. 

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

According to the U.S. Census Bureau, the land port of Laredo was the No. 1 busiest port (i.e., containers) in the United States of America in 2023, topping USD 300 Billion, a record for the value of goods imported and exported at this port- also putting Laredo in third position for US ports in terms of value. Surprisingly, global trade was down 4% in general, but Laredo was up 8%, a massive difference from international trends. In another report, the Inter-American Development Bank projects an increase of USD 30 Billion in the coming years in trade between the US and MX due to nearshoring, with an estimated 40% of that number passing through Laredo.

With over 450 nearshoring initiatives set to launch in Mexico, encompassing both the expansion of current companies and the introduction of new entrants in the next couple of years, Laredo is gearing up for an expected surge in demand. This preparation includes enhancing existing infrastructure, such as the Fast Lanes at the World Trade Bridge, significant highway improvements by the states of Texas and Nuevo Leon, and the expansion of the Colombia Bridge west of Laredo. As a result, Laredo will continue to reap the rewards of the United States' most substantial trading partnership.

• According to the Energy Information Administration (EIA), diesel prices dipped .157 cents per gallon on average nationwide in March compared to last year.
• Dry van linehaul rates are $0.14/mile lower than last year. Based on the volume of loads moved DAT’s Top 50 lanes averaged $1.84/mile the previous week, which is $0.26/mile above the national average.
• Back in the growth column for the 6th time in 7 months, the Logistics Manager’s Index rose to 56.5 in February, followed by a 2nd month of growth in every sub-category. 
• According to the Bureau of Transportation Statistics, the value of goods traded between the U.S. and Mexico increased 2.3% in January 2024 compared to the previous year, an eight-month continuous growth streak. 

Produce season has officially kicked off. Nuvocargo’s data team analyzed how this season impacts the US economy and its relationship with its trading partners, based on the most recent report by the US Department of Transportation from 2019.
• The seasonal produce cycles significantly contribute to the U.S. GDP, with agriculture and related sectors generating $992 billion in 2015, comprising 5.5% of the nation's GDP.
• These industries also provide over 21.6 million jobs, constituting 11% of total U.S. employment.
• The ebb and flow of produce seasons impact trade dynamics, with exports totaling $140 billion in 2018 and imports totaling $129 billion.
• The trade relationship with North American neighbors (Mexico and Canada) has quadrupled since 1994.
In addition, we analyzed the FAF. For context, the Freight Analysis Framework (FAF) is a pivotal resource, offering a comprehensive overview of freight movement within the United States. Orchestrated by the Bureau of Transportation Statistics (BTS) and supported by the Federal Highway Administration (FHWA), the FAF database delivers invaluable insights for state-level and metropolitan area analyses, facilitating a robust understanding of the nation's freight dynamics.
Our analysis focused on a dataset that encapsulates a comprehensive array of transported goods from 2017 to 2023, covering a spectrum of agricultural commodities and food, notably transported via trucks.

Facts and Figures

Produce Season by the Numbers.

Nearshoring Beat

In February 2024, Mexico hit a new high in foreign direct investment, fueled by nearshoring trends and the pandemic’s exposure to supply chain vulnerabilities. This boost is partly due to the increasing importance of US-Mexico logistics, highlighting the growing partnership, which saw a 38% rise in cross-border traffic in 2023. The full impact of these investments, particularly operational benefits and challenges, will be more visible starting in 2025.

Operating in Mexico comes with challenges, including reliance on lower-tech solutions and informal communication, factors that businesses are planning for. Thomas Wasson from Freightwaves interviewed our CEO, Deepak Chhugani, and Head of Strategic Accounts, Danny Gordon, to illuminate strategies to navigate these operational challenges effectively.

“Nuvocargo is pairing technology with singular expertise in this trade lane to disrupt the status quo. Gordon explains that many legacy providers approach the cross-border market like they would a traditional U.S. market where cold calling and brute force carrier discovery can create market share. Operating at a higher level requires additional considerations, like the documents required, the languages required for a specific facility to book appointments, or even routing considerations within Mexico that take into account infrastructure and safety requirements.” - Danny Gordon.

You can read the rest of this interview on the Logistics of nearshoring: navigating U.S.-MX border complexities here.

Editors Picks

Innovation Hub 

Throughout 2024, companies from different industries are exploring regenerative AI models to create more resilient supply chains, generate savings, and reduce manual workflows that directly affect their logistic operations. However, the use of these models remains limited, according to Matthias Winkenbach, director of research for the Massachusetts Institute of Technology’s Center for Transportation and Logistics.

He explains that these tools operate to minimize risk; if something goes wrong during these trials, it won't affect the entire supply chain, allowing other parts to continue functioning smoothly.

There's a general belief that these technologies and models could be applied to more extensive tasks such as managing orders, monitoring suppliers, and conducting price comparisons.

Laredo’s Remarkable Expansion

Economic and Logistical Insights:

Keep an eye out for more Nuvocargo cross-border market updates, coming soon. And if you want to receive more insightful content from Nuvocargo, click the button to join our newsletter. 

1. A broad range of commodities signifies the multifaceted nature of produce transportation, highlighting the logistic sector's diversity of accommodations, from perishable items to bulk grains. This diversity not only underscores the logistical flexibility required for the freight industry but also mirrors the complexity of supply chain management.
2. The annual changes in transport volume and value could reveal critical economic trends, including fluctuations in demand, shifts in agricultural productivity, or variations in consumer behavior. Further investigation of these trends is instrumental in informing stakeholders about different commodity sectors' economic health and trajectory.
3. The following "domestic mode" data refers to information about different ways goods are transported within a country, and this data specifically looks at transportation by truck. This information helps us understand how effective, environmentally friendly, and cost-efficient different transportation methods are. It also shows us the bigger picture of how well our transportation strategies and infrastructure are working.

New Chamber Report Highlights Enormous Nearshoring Opportunities for Latin America and the Caribbean by US Chamber of Commerce.
Global Warehousing and Industrial Rent Growth by Prologis.

Expert’s Take

Complemento Carta Porte 3.0 Explained 

With the Complemento Carta Porte implemented at the beginning of 2024, carriers and shippers face further complexity in the already intricate process for cross-border shipments between the US and Mexico. To help explain this new requirement, we asked Josefina Blanco, Nuvocargo’s Head of Legal & Compliance, some critical questions about CCP 3.0. 

“Ensuring smooth compliance and operation with CCP requires a multifaceted strategy, where staying current on constantly evolving regulations is critical. This involves diligent monitoring of updates from the SAT and customs authorities and leveraging official guides to understand compliance nuances. Additionally, harnessing technology through software solutions that automate and validate CCP documentation can significantly reduce errors and streamline processes. Effective communication also plays a critical role internally among teams responsible for supply chain operations, finance, and compliance, as well as externally with logistics partners and industry experts.” - Josefina Blanco, Head of Legal @ Nuvocargo. 

You can read her thoughts here.