Every day, some $1.4 billion is exchanged in commercial trade between the U.S. and Mexico, according to UPS. In fact, the U.S. is Mexico’s largest trading partner, and Mexico is the United States second-largest export market (after Canada) and its third-largest trading partner.
Growth in manufacturing and the middle class in Mexico, increases in e-commerce shipments, and the rise in intermodal cross-border shipments between the U.S. and Mexico drove UPS’s renewed focus on the trade lane.
In 2014, UPS established a center of excellence for U.S.-Mexico trade. A team of experts evaluated and improved offerings, focusing on shippers’ needs. Then early last year, UPS announced it had strengthened those cross-border services.
“UPS has seen nearly a 20% increase in customer requests for U.S.-Mexico cross-border movements,” says Carlos Cubias, vice president of the UPS center of excellence. “We reengineered and aligned our capabilities for more flexibility, reliability, visibility and simplicity. Shippers now have the same service options – express, expedited or standard – for all shipments regardless of size. In addition, UPS is the only carrier with delivery guarantees for LTL and package shipments when we are the customs broker.”
Automotive, manufacturing, aerospace and high-tech are the priority industries UPS serves out of Mexico. U.S.-to-Mexico trade includes the same industries, and growth of the Mexican middle class means in the future more volume will go from the U.S. to Mexico from the healthcare and retail industries.
Familiar with that automotive freight is Darryl Barber, automotive segment marketing manager for UPS. He points out that the automotive industry has been expanding beyond the typical Detroit and rust belt states, both to southern states such as Alabama and Kentucky, as well as across the southern border to Mexico.
“You’ll see the same parts kind of crisscrossing the border multiple times,” he explains. A component may be made in Mexico, comes north where it goes into a larger assembly, then that assembly may cross the border again for final assembly in Mexico before the product heads back north of the border for sale.
“We look at how we expedite the clearing process to get products from Mexico to America to go into an assembly plant or vice versa,” Barber says.
In order to do that, UPS looks at its cross-border business as a single entity, rather than what normally would be four or five separate business units.
This “center of excellence” team is cross-functional, he explains, combining freight, small package, forwarding for air and ocean, brokerage, etc. “We have a team that looks at that as one geographic unit rather than five business units,” Barber explains. “It allows us to look at the needs of the customers around that particular area. It more comprehensively looks at our broad portfolio of services, and how can we meet those needs and complications that arise from doing cross-border.”