I’ve been thinking about Mexico lately, and, no, not as a spring break destination either. Instead, my thoughts have been driven by news a few weeks ago that the U.S. and Mexico are working to end the nearly 20-year dispute over cross-border trucking.
As reported by the Wall Street Journal, the deal seeks to end the long-standing ban on Mexican trucks crossing the U.S. border, a violation of the North American Free Trade Agreement that subjected $2.4 billion of U.S. goods annually to punitive tariffs by Mexico. Half of the tariffs will be suspended when the deal is signed by both nations, expected in about another 30 days. The remainder will be lifted when the first Mexican hauler complies with a series of U.S. certification requirements, including English-language, drug and safety tests.
The result of that dispute, says Aric Newhouse, senior vice president for Policy and Government Relations, NAM, in a statement released to the press, is that American manufacturers have lost market share to other nations, and billions of dollars of U.S. exports to Mexico. Tens of thousands of manufacturing jobs have been negatively impacted as well, Newhouse says.
Now, following on the heels of that news, DHL announced last week that it’s introducing its “Logistics Without Borders” solution, an end-to-end, integrated cross-border supply chain solution intended to eliminate the complexities and minimize risks inherent in U.S.-Mexico border crossings. According to DHL, the solution, which connects suppliers, carriers and end-users on both sides of the border, leverages DHL’s Global Forwarding and Supply Chain divisions’ capabilities to provide companies shipping across the U.S.-Mexico border with one-stop access to the tools, expertise and services necessary to simplify the process and ensure that shipments reach their destinations securely and on time.
What’s interesting, is what actually comprises Logistics Without Borders. The DHL solution includes a wide range of services in transportation, U.S. and Mexico customs and brokerage, bonded warehousing, transport management and cross-docking, and systems and document management. Furthermore, intra-country extended services, such as in-plant services, vendor managed inventory, and supply chain analysis and design may also be bundled into a seamless solution.
The solution also addresses the supply chain fragmentation that can occur at the border when handoffs are made to multiple providers without holistic oversight of the process, says Luis A. Coppel, regional vice president of the southern border and a licensed customs broker for DHL Global Forwarding. The Logistics Without Borders network of warehousing, information systems, transportation and customs brokerage services are backed by an integrated IT platform that offers a single chain of custody and delivers complete visibility of every item in the supply chain. The result is expected to be greater shipment reliability, which ensures product security, on-time delivery, smaller safety stock, lower inventory, and better support for just-in-time and lean manufacturing processes.
I’m interested in these developments on many levels. On the one hand, I’m curious how DHL’s service will be accepted. However, I’m also interested in how cross-border shipping will play out on a larger scale—whether it’s through use of an offering such as DHL’s or by companies’ own initiatives. More importantly, I’ll be following developments to see the impact on the supply chain in general.