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Any company considering operating in Mexico should be familiar with cross border trucking operations, regulations, and best practices. International shipping involves a measure of risk, and the process is quite complex.
To maintain trusted certifications and penalty-free cross border operations, it is best to have at least a basic understanding of how cross border trucking works between the US and Mexico, and what the major pitfalls are.
With cross border trade between the two North American country valued at over $1 billion USD per day, it’s no surprise that trade with Mexico is a highly lucrative option to leverage. However, these daily interactions run smoothly only because manufacturers understand the process and take proactive steps to understand best practices.
Manufacturers who import materials from the US and then truck products back into the States from Mexico face several key cost considerations and challenges if everything is not in order. Some of the more notable include:
Not every shipment is the same, and there may be some variation. But in general, the following documents are needed if you want our shipment to cross the border in a smooth and timely manner:
The BOL (called a “Pedimento” in Mexico) is a contract between the freight carrier and shipper. It is filled out by your customs broker and includes all the necessary details regarding descriptions of goods, contact info for involved parties, etc.
The CI contains key information that must not conflict with any details on the BOL, and assists the importer in passing customs. Some of the items it must contain include:
Called the SCAC (Standard Alpha Carrier Code) in the US and CAAT (Carrier’s Harmonized Alphanumeric Code) in Mexico, this document identifies the freight carriers to the customs broker.
Under the USMCA, the CO does not follow a prescribed format, but must identify the tariff classification for all items shipped to verify preferential tariff treatment.
The DODA is generated in the Mexican Tax Administration website by the customs broker on behalf of the carrier.
Prior to arriving at the US border, northbound truckers are required to submit an e-Manifest declaring all cargo.
As you may have noticed, retaining qualified customs brokers is paramount and required by law in the cross border trucking process.
Mexico requires a licensed customs broker domiciled in Mexico (MCB) to act as your agent and negotiate the crossings with perfect compliance. Likewise, the US requires a licensed customs broker domiciled in the United States (USCB) to act as your agent on the US side of the border.
The exporter of record employs a Mexican broker when importing from Mexico to clear the shipment, and the importer of record employs a US broker to clear the shipment. These two brokers coordinate together as your legal representatives.
Southbound cross border trucking shipments must first complete a three-step process before crossing the border. First, import documents must be submitted to Mexican customs. Second, payment must be submitted for all duties. Third, these payments must be verified by a Mexican bank.
Then, the truck is free to cross the border and immediately undergo primary inspection. Occasionally, a truck is selected at random for a secondary inspection. But typically, the less-involved first inspection is all that is required.
After clearing inspections, customs officials verify all necessary paperwork. Then the truck may proceed past the 21-kilometer “border zone” if needed.
The northbound border crossing is only slightly different. Prior to approaching the US border, export documents must be submitted and verified by the Mexican exporter. Commercial and cargo data must be submitted through ABI (the Automated Broker Interface).
After this, the truck proceeds north of the border and is subject to primary inspection, which usually includes K-9 checks, and on occasion, a more detailed secondary inspection is called for. There are sometimes special programs that allow pre-approved shipments to pass through inspections at a much faster rate than typical. During the inspection phase, customs officials verify all compliance issues for both driver and shipment.
While the above information will help give a general idea of the process, these rules are subject to change. The recent global health crisis affected border crossings, so check with customs officials for the most current requirements.
Likewise, there are many specific forms associated with each of these steps. So, working with qualified customs brokers is helpful. But this option does not relieve the importer or exporter from liability. Brokers are authorized to act on your behalf, and are usually quite knowledgeable in negotiating the crossing. However, there are alternatives.
Probably the safest and most convenient way to handle cross border trucking is through a shelter company. Not only will a shelter service walk you through the steps of establishing and running a Mexican import/export manufacturing operation, they also handle all import/export aspects of your business. This includes every step of cross border trucking, for raw materials, equipment, and finished goods.