So, it’s not surprising that Canada, Mexico, and the United States are among each other’s top trade partners. Canada and Mexico have been one of the top three merchandise export markets for 49 states in the United States, the U.S. Chamber of Commerce reports.

“Cross-border trade with respect to Mexico, the United States, and Canada is more relevant than it ever has been. We have a stable geopolitical environment, free trade, and half a billion people between the three countries,” says David Cox, chief executive officer of Polaris Transportation Group, a provider of less-than-truckload (LTL) service between Canada and the United States, and other services. Each of the countries also boasts an educated workforce, making cross-border trade even more efficient, Cox says.

The focus on business opportunities within North America has grown over the past few years. “After 2008, we saw a lot of companies open up shop across the world, but predominantly Asia,” says Andreea Crisan, president and chief executive officer with ANDY, a provider of transportation and supply chain solutions, based in St-Laurent, Quebec.

For example, annual foreign direct investment (FDI) into China grew from around $40 billion in 2000 to $124 billion in 2011, and then growth rates dropped. In 2022, FDI into China hit about $189 billion—a massive number, but up just 4.5% from the previous year.

Rising costs for shipping, labor, and other expenses, along with the push for sustainability, have prompted companies to consider a wider range of countries when locating operations. Many organizations based in North America are assessing opportunities closer to home.

“It’s a natural transition, given all that’s going on, to come back on to the North American continent,” says Crisan. It’s also good for the planet to manufacture closer to the market for a company’s products, cutting the distance items have to be transported, she adds.

A growing number of U.S. companies are turning to nearshoring, typically in Mexico, for greater visibility, shorter delivery times, and a greater ability to influence the quality of their products, says Jose Minarro, managing director with Sunset Transportation’s Cross-Border Operations.

Mexico’s proximity to the United States, its availability of skilled labor, competitive labor costs, favorable trade conditions, and tax exemptions make it attractive for manufacturing, he adds.

The shorter transportation times are especially significant for products that are seasonal and/or time sensitive, like fashion items, says Jerry Haar, professor of international business at Florida International University. In addition, by shifting some operations from other parts of the world to Mexico, companies diversify their supply chains, lowering risk, he adds.

Boosting Nearshoring Benefits

Trade agreements between Canada, Mexico, and the United States further boost the benefits of nearshoring and cross-border trade. The most prominent, the United States Mexico-Canada Agreement (USMCA) went into effect July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). The USMCA contributes significantly to stability in rules and norms, reducing the risk to trading and investing across North America, Haar says.

The USMCA allows for a wide variety of duty-free items that can be exchanged among the United States and Mexico, Minarro says. An added benefit: Many manufacturing companies that set up shop in Mexico end up selling a portion of their production into the domestic market of approximately 130 million people, he says.

Surging Trade

“Since the inception of USMCA, trade throughout North America has experienced a surge, accompanied by a substantial uptick in investment within industries capitalizing on this opportunity,” says Rachel Honbarger, project manager with Tompkins Solutions, a provider of supply chain solutions.

In 2022, exports of U.S. goods with the USMCA were $680.8 billion, up 16% from 2021 and a 34% jump from 2012, according to the Office of the United States Trade Representative. Imports of goods through the USMCA also grew, rising 20.5% between 2021 and 2022, to total $891.3 billion.

Cross-border trade and nearshoring within North America offers companies based in Canada, Mexico, and the United States greater opportunity for profit and growth. At the same time, companies need to consider potential risks.

One is potential changes to trade agreements or policies. Even minor adjustments can profoundly affect the functionality or expenses associated with operating such a supply chain.

An example is recent efforts by some policymakers to amend aspects of Section 321, which allows many imported items to enter the United States free of duties and taxes, so long as the aggregate retail value of the products imported in one day and exempted from the payment doesn’t top $800. A slight modification to the scope of duty-free exemptions could lead to substantial shipping expenses, making nearshore distribution economically unviable, Honbarger says.

In addition, locating manufacturing operations across the border from distribution networks increases transportation expenses due to tariffs, longer travel distances, and a rise in shipment volumes to compensate for extended travel times.

Pulling Off Cross-Border Operations

Executing a cross-border operation requires complex technological integration to ensure seamless oversight and control of the entire supply chain process.

Without this, businesses face potential product loss, challenges in restocking distribution centers or meeting customer demands, and expenses stemming from inadequate visibility into operations.

Achieving the benefits of cross-border trade and nearshoring within North America—including increased profit and accelerated growth—demands an in-depth knowledge of the relevant regulations and documentation requirements to minimize the risk that shipments are held up by the authorities.

Working with a logistics provider with expertise and a commitment to this trade area is essential. “We’re in a 24-hour industry,” Cox says. Partnering with a quality broker that can support its clients around the clock cuts the chance of border mistakes and delays, he adds.

These providers can help shippers navigate trade across North America.

ANDY: High Standards and Customized Services

Supply chain solutions provider ANDY is well equipped to manage cross-border shipments, relying on its experience and expertise on the processes and requirements.

From its start with a single, burgundy-colored delivery truck, ANDY has grown into one of the 250 largest fleets in North America, as well as one of the fastest growing companies in Canada.

It also holds the distinction of being one of a handful of women-owned companies in the supply chain and transportation sector. “We try to empower women and place them in pivotal roles where they’re decision makers,” Crisan says.

At the same time, the men who are part of ANDY also contribute to its success. “Great men work here as well,” Crisan says. “It’s a diverse place. Our success boils down to our company culture.”

The culture has helped fuel ANDY’s tremendous growth since its start in 2001. That’s when Crisan and her father, Ilie Crisan, emigrated from Romania to Canada. A former bus driver, the older Crisan tried to find a job as a truck driver in Canada but was unable to. With savings running low, he purchased his own truck and got to work. “That’s how it started,” Crisan says.

Then 11 years old, Andreea Crisan has been key to ANDY’s growth. Among other responsibilities, she helped her father translate documents. “I grew in parallel with the company and so did my responsibilities,” she says.

ANDY now operates out of 15 locations across Canada, including eight terminals that are CTPAT and PIP certified, as well as a fleet of about 300 trucks and 800 trailers.

Its clients range from industrial and natural resource firms to retailers and manufacturers, and they can choose from drayage, transportation, logistics, distribution, and warehousing, and other transportation and logistics services.

Shippers also can choose from flatbeds, less-than-truckload and full truckload, and dedicated transport, among other options, as well as brokerage, warehousing, cross-docking, and other services. “We can act like a one-stop shop,” Crisan says. All trucks are outfitted with live tracking technology, providing clients with visibility into the movement of their shipments. They also can assess performance through reporting and analysis.

Building Cross-border Expertise

Since its earliest days as a company, ANDY has been handling cross-border shipments. “We’re experts on the processes and requirements, and well equipped to manage cross-border shipments, so there are no delays,” she says.

Because of its commitment and responsiveness to its clients, ANDY earned all the transportation business of one of its clients, in a dedicated contract arrangement. “We’ve become this company’s outsourced, dedicated private fleet,” Crisan says. For this company, ANDY provides planning, cross-docking, and daily deliveries and other services.

It’s an important and challenging role, and ANDY is more than up to the task. Because the client ships every day, its customers can place orders until late afternoon, and be confident their products will be shipped the next day.

“That’s our client’s promise to its customers, and our partnership makes us a very integral part of that promise,” Crisan says. Through the dedicated contract arrangement, the client gains quality service, predictability, and cost savings, she adds.

To achieve these benefits, ANDY worked with the company to truly understand its needs, and then tailored its services to meet them. “It’s a true partnership, and we’re working together to provide the services that can help our client achieve its objectives,” Crisan says.

Polaris Transportation Group: Customer-Focused Logistics Specialists

Along with its cross-border service, Polaris Transportation Group offers third-party logistics, warehousing, distribution, and supply chain management services.

Over the past three decades Polaris, one of the largest privately held Canadian LTL carriers, has moved 6 million shipments between Canada and the United States. “At Polaris, our principal activity is quick, transparent, cross-border transportation,” Cox says.

To ensure it can continue providing this, Polaris has cultivated an in-depth understanding of customs regulations, as well as strong relationships with customs and border protection agencies in both Canada and the United States, Cox says.

He and his team also have been very deliberate in investing in technologies that enable Polaris’ clients to work in a digitally transparent fashion.

Polaris ships a range of commodities, with a specialization in dry goods and high-value products. It also works in all transport modes. Along with its cross-border service, Polaris offers third-party logistics, warehousing, distribution, and supply chain management services.

Customers come in all sizes. “Smaller companies may move a handful of shipments a month, but those shipments impact their business, their well-being, and their reputation. I am equally in love with those businesses as much as I am the larger ones,” Cox says.

Four companies make up Polaris; three are Polaris Transport, Polaris Global Logistics, and Polaris Commercial Warehousing. In 2019, with the launch of NorthStar Digital Solutions—the fourth Polaris company—the head office housed a state-of-the-art digital lab. Among other initiatives, NorthStar Digital Solutions has explored artificial intelligence and machine learning, enabling it to continue searching for efficiencies within its processes.

Making Strategic Investments in Technology and Workforce

Polaris has also invested in robotic processing automation, artificial intelligence, and blockchain. By deploying a mobile driver application (FR8Focus) and integrating it into their TMS, clients can check the location of their freight through the customer portal in real-time.

“Everyone wants to know where their shipments are. This needs to be transparent,” Cox says. That holds true even when Polaris is working with supply chain partners, such as other carriers. “It’s seamless, transparent, and digital,” Cox says.

The use of systems like intelligent document workflow for order entry, accounts payables, and other functions, offers a “wealth of insight that enables the Polaris team to focus on managing complex situations,” Cox says.

Polaris operates a consolidation program for several U.S.-based clients that are shipping products to Canada from various regions within the United States. For this program, Polaris directs the companies’ shipments to a hub in the central United States, and then transports the cargo across the border on a single trailer.

“Shippers gain savings and certainty,” Cox says. They can be confident of the date their inventory or merchandise will arrive in Canada. This is harder to predict when products move in a piecemeal fashion.

Along with technology, Cox has been deliberate about searching for top employees, implementing best-in-class processes, and making sustainability a foundation of Polaris. “Whether it’s the environment or the social issues that affect business and the communities we’re working within—these are important to me as a business owner,” he says.

Sunset Transportation: Family Roots and Global Reach

Sunset Transportation offers all the services shippers need to conduct cross-border trade, from import/export transportation management to warehousing and transloading services.

The employee roster at Sunset Transportation includes a farmer, an Emmy winner, an Arabic speaker, a hometown pageant queen, and an amateur tractor pull competitor, along with several military veterans. The range of interests and experience among Sunsetters, as the employees are known, mirrors the broad roster of transportation and logistics services Sunset offers.

Sunset Transportation was founded in 1989 by Jim Williams. However, Sunset traces its start to 1861, when Jim Williams’ grandfather opened Williams Paper Company, which remains in operation today. Williams Paper Co. expanded its operations in 1970, when Jim Williams began managing the business’s fleet of trucks and established a thriving backhaul program.

In 1989, Sunset Transportation launched. In 2022, Sunset joined Armada Supply Chain Solutions, a food and restaurant logistics company.

For companies looking to do business between the United States and Canada, Sunset offers transportation services in all 10 Canadian provinces. It also provides import/export transportation management, truckload and LTL service, international export and import management, customs filing and management, financial support of goods and services tax (GST), and warehousing and transloading services. “We offer everything you need for cross-border trade,” Minarro says.

Working Between Mexico and the United States

Sunset also provides expertise and services for companies looking to trade between Mexico and the United States.

To help clients streamline their supply chains, Sunset takes a strategic approach to mapping their flows for inbound and outbound shipments, analyzing historical shipping data to identify sustainable opportunities to optimize freight, enhance service, save money, and improve technology. Using this insight, the Sunset team then presents a cross-border logistics solution that incorporates all the services needed for a streamlined supply chain.

In 2019, Sunset added a branch office in Laredo, Texas, offering cross-border logistics and border warehouse solutions. This was bolstered in 2021 with the opening of a cross-border office in Querétaro, Mexico, which includes an airport customs office, as well as a sales office.

Today, Sunset Transportation offers a range of services, including expedited freight, cross-border and customs solutions, international logistics, logistics management, and domestic, Mexico, and drayage carrier solutions. It also provides a comprehensive line of customs, warehouse, and freight brokers.

As important, Sunset internally handles every link of its supply chain services. “We don’t outsource customs and compliance functions,” Minarro says.

With CTPAT-certified warehouses in Laredo and Nuevo Laredo, Sunset can offer shippers solutions that keep them CTPAT-compliant from a warehousing and transloading perspective.

Sunset Transportation continues to innovate and adapt. Over the past three years, the company has collaborated with companies from Europe, Asia, and North America that are looking to establish new operations in Mexico. “Different industries, but all have the same goal: choose the best location within Mexico to manufacture a finished product or sub assembly that will be shipped into the United States,” Minarro says.

The Sunset team interacts with the customers from the planning stage onward and takes a holistic approach with every engagement.

“The deliverable at the end of the process is to provide suggestions on how to set up the logistics strategy, incorporating import and exports flows, technological requirements, and process automation,” Minarro says. “We listen to our customers and their needs, in addition to listening to the market, so we can provide the best, most efficient, and tailored solutions for our customers.”

RFS Document Defined

The Received for Shipment (RFS) document in ocean shipping indicates that a carrier has received the cargo at the port but still needs to load it onto a vessel. It’s a pre-printed bill of lading, formalizing other packages’ receipts before loading, and is crucial in transactions involving Letters of Credit. 

The RFS document confirms receipt but doesn’t guarantee shipment loading, making it different from an onboard bill of lading. This distinction is vital for freight logistics and payment processes in international trade​​​​.

How An RFS Shipment Works

In an RFS shipment, in this shipment status, the shipping line issues a bill of lading indicating cargo receipt at the port, yet to load onto a vessel. This facilitates tracking and confirms receipt for buyers and banks, especially in LC transactions. However, it doesn’t guarantee subsequent loading onto the ship​​​​.

RFS and Bill Of Lading Status

When cargo is confirmed as loaded and shipped, the RFS notification changes to an onboard bill of lading, typically showing a shipped-on-board date. This transition is crucial for banks and financial institutions involved in Letter of Credit transactions, as it provides the necessary assurance about the shipment of goods.

Details On A Received For Shipment

The document issued includes the carrier’s acknowledgment of cargo receipt, detailed cargo description and quantity, terms and conditions of the bill of lading, and relevant information for customs and tracking. 

It often accompanies a packing list commercial invoice and the certificate of origin, which are essential for customs clearance and shipment management​​​​​​.

RFS Bill Of Lading Vs. On Board Bill Of Lading

In international shipping, the dynamic between the Received for Shipment (RFS) Bill of Lading and the On Board (SOB) Bill of Lading is vital for efficient cargo management and adherence to trade finance protocols.

RFS Bill of Lading

This document is issued initially when the carrier receives the cargo at the port. It serves as a preliminary acknowledgment of cargo receipt without confirming its loading onto the vessel. The RFS Bill of Lading is crucial in the initial documentation, facilitating planning and logistical arrangements for the upcoming shipping process.

SOB Bill of Lading

Following the RFS Bill, the SOB Bill of Lading comes into play once the cargo is loaded onto the named vessel. This document confirms the loading of the shipment, thereby advancing the cargo’s status in the shipping cycle.

Entities Involved

The interplay between these two bills of lading ensures a transparent and systematic progression of the cargo shipment. It involves multiple stakeholders, including shipping carriers, shippers, consignees, and financial institutions like banks. 

Each entity relies on the accurate and timely issuance of these documents to track the shipment’s journey and fulfill various contractual and financial obligations.

Trade Finance Compliance

The transition from RFS to SOB Bill of Lading is a procedural and compliance step. It aligns with international trade finance requirements, providing necessary assurances to involved parties, particularly in transactions involving Letters of Credit.

Importance for Stakeholders

These documents provide crucial information about the cargo’s status and location for shippers and consignees, aiding in logistics planning and management. Banks and financial institutions offer assurance about the cargo’s journey, mitigating risks associated with international trade financing.

Global Shipping Operations

RFS and SOB Bills of Lading are standard practices in global shipping operations, ensuring that cargo movements are documented and managed effectively from the point of receipt at the port to the final loading onto the vessel.

Moreover, the RFS and SOB Bills of Lading work in unison to ensure a smooth cargo transition through various stages of international shipping, maintaining transparency, compliance, and assurance for all involved parties.

FAQs

Here are some common FAQs about the received for shipment.

What Does Received For Shipment Mean?

Received for shipment is a notation on a bill of lading that indicates the carrier has received the cargo at the port for loading onto a specific vessel or voyage.

What Is Received For Shipment Bill Of Lading?

A shipment bill of lading receipt acknowledges the cargo receipt by the carrier at the port facility for loading onto a specific vessel or voyage. It indicates the cargo has been accepted but has yet to be loaded on the vessel.

What Is The Difference Between SOB And RFS?

The difference between them is RFS indicates that the cargo has been accepted by the carrier at the port for loading, but it doesn’t guarantee that the shipment has been loaded on the vessel. Conversely, SOB confirms that the shipment has been loaded and shipped on a vessel.

Summary Of Received For Shipment

In conclusion, understanding the concept of ‘Received for Shipment’ is important in the shipping industry. This notation indicates that the carrier has received the cargo at the port facility for loading onto a specific vessel or voyage.

It’s important to note that “Received for Shipment” doesn’t mean the cargo has been shipped on board yet. This notation and other notations like “Shipped on Board” and “Clean on Board” help satisfy the buyer or banks that the cargo has been received or delivered. 

Visit inbound logistics to research warehouses, factories, and catch up on important logistics insights.

The ongoing conflict between Russia and Ukraine is emblematic of an increasingly volatile geopolitical moment—the kind of global environment that suggests risks around every corner and few things that can be considered truly stable.

This is the world that logistics managers must navigate. Businesses are increasingly global—their suppliers especially so. This leaves them even more susceptible to the risks of data security, privacy, and fraud.

This is in part because a more sprawling global network of suppliers requires more efficient and detailed management processes at that scale, but also because regulations vary from country to country and region to region, and staying in line with them all is an incredibly complex task.

Those regulations are not done being implemented, either. Just look at the Uyghur Forced Labor Prevention Act, the German Supply Chain Due Diligence Act, and the EU’s Corporate Sustainability Reporting Directive. Each of these, and many more, are currently or will soon require companies to take steps to limit ESG—environmental, social, and governance—risks and document these efforts.

These aim to reduce carbon emissions, increase sustainability, and eliminate modern slavery around the world by prohibiting trade with those who are engaged in or selling products made from forced labor.

Compliance Issues on the Rise

The likelihood of compliance issues for unprepared companies is rapidly increasing, whether or not they are global in nature. There can be incredibly damaging consequences for businesses that don’t know how to navigate the rapidly shifting regulatory landscape; one act of noncompliance averages about $14 million between fines, penalties, and other costs.

Companies that are taking steps to build out their supply chain management tools, particularly with regard to vendor-facing technologies, will have an advantage when it comes to adapting to new global regulations.

This is because compliance risk is just the latest in a long string of risks that are best mitigated by visibility into suppliers, easier integration between tools and communication among parties, and the ability for data to be easily and securely accessed across a network of systems.

Supply chain managers are turning to automation that allows for full data capture during onboarding and visibility into vendors at a glance. This can allow for quick checks on which suppliers are subject to a given regulation, show if they’ve provided the required data the company needs to report, and prompt them with a timely reminder to provide this information when they fall behind.

If vendors don’t do their part, it will be easy for supply chain managers to see what they need to become compliant or drop them in time to avoid penalties.

Properly monitoring for regulatory changes in any region a company does business in is more important than ever. Building the capability to swiftly adapt to changes in that environment is a competitive edge that only companies committed to compliance will enjoy.

Polaris Transportation is one of the largest privately held asset-based cross border LTL carriers with daily departures between CAN & the USA. They specialize in shipping dry goods and offer industry-leading transit times to and from all points in the USA, including next-day LTL deliveries to select cities.

Polaris Global Logistics (PGL) boasts a seasoned team of logistics professionals and a hand-picked partner carrier network delivering tailored supply chain solutions including transportation, warehousing & distribution, reverse logistics and more across North America and worldwide.

Polaris Commercial Warehousing operates facilities in Toronto, ON where they manage incoming shipments and distribute throughout CAN & the USA. They offer a full menu of services from pick & pack, sorting, display assembly, co-packing for e-commerce to fulfillment and distribution by courier, LTL or truckload carriers. Their specialists handle diverse commodities such as CPG, bulk, medical devices, industrial and commercial products.

NorthStar Digital Solutions (NDS) is infusing the digital experience into transportation and supply chain industries through powerful, efficient and seamless technology platforms. Known as systems integrators, they provide unified end-to-end solutions and offer direct connectivity streams to associated partners, carriers, shippers, brokers and consumers. They recently launched FR8Focus, which is designed to solve real-world challenges in the LTL & TL market with visual digitization. Utilizing automated processing, real-time fleet monitoring and more, FR8Focus is connecting the road to the back office. For more information, visit northstardigital.solutions.

Polaris Transportation Group
7099 Torbram Road,
Mississauga, ON
Canada L4T 1G7
1-800-409-2269
polaristransport.com
customercare@polaristransport.com

Canada, Mexico, and China are the United States’ top three trading partners. Measured by logistics alone, however, the American relationship with Canada enjoys a status all its own.

“Canada and the United States share the longest land border in the world,” Canadian Prime Minister Justin Trudeau said in remarks following Biden’s address to Parliament. “We share three oceans and the Great Lakes.”

Intertwined and Inseparable

Those geographical links and the longstanding friendship between the two countries translate into a uniquely cooperative experience in border crossings—for both freight and people. Just ask vacationing Americans who cross from Niagara Falls, New York, to Niagara Falls, Ontario, and back again with ease.

Likewise, logistics providers on both sides of the Canada-U.S. border attest to the relatively seamless nature of the customs procedure as products move between the countries.

Logistics companies and shippers that have experience with, and knowledge of, the rules and regulations governing the process are routinely on top of any changes and adjustments in real time.

No wonder. The two countries are more than mere neighbors and friends. President Biden puts it this way: “Our destinies are intertwined and they’re inseparable.”

All indications point to a bond that is not going to change anytime soon. Trudeau puts it this way: “Whether it’s protecting our shared waters, including in the Arctic, conserving biodiversity, or building strong net-zero economies, Canada and the United States will continue to work together as partners.”

The partnership between the two countries is especially strong in commerce and trade. Biden has said the United States has no closer friend or ally than Canada. Nearly $2.6 billion in goods and services crossed the shared border every day in 2022, an almost 20% increase over the previous year.

This trade is vital to the economies of both countries, supporting millions of jobs on both sides of the border.

Keys to Strengthening the Partnership

Both countries strive to keep border crossings as smooth and efficient as possible. To that end, both governments established the U.S.-Canada Supply Chain Working Group to support the “Roadmap for a Renewed U.S.-Canada Partnership,” a blueprint created in 2021 to strengthen U.S.-Canada supply chain security and to “reinforce the deeply interconnected and mutually beneficial economic relationship between our two countries.”

In a joint statement, Biden and Trudeau explained: “It creates a partnership on climate change, advances global health security, bolsters cooperation on defense and security, and reaffirms a shared commitment to diversity, equity, and justice. Bound by history and geography, the partnership between the United States and Canada endures because we invest in each other’s success.”

The Supply Chain Working Group focuses on enhancing cooperation in key areas, including trade, with the objective of reaching greater alignment and identifying potential vulnerabilities.

The Working Group has initiated a Joint Economic Analysis to map supply chains and explore issues such as skills development and regulatory cooperation.

In 2021, the White House announced the creation of the Supply Chain Disruptions Task Force to address pandemic-era road and rail bottlenecks around borders and major ports. Among other things, the task force has worked to increase digital information flow between private companies operating logistics supply chains.

Meanwhile, Canada established its own Supply Chain Task Force to solicit recommendations regarding short- and long-term solutions to supply chain challenges from industry experts, businesses, and workers.

The result of all this has been the establishment and, when necessary, adjustment of requirements that enable manufacturers and shippers to comply with regulations free of undue stress—so long as the companies making the actual crossings are sufficiently prepared.

U.S.- and Canada-based logistics providers with rich experience in border crossings, such as FLS Transportation and Polaris Transportation Group, stand ready to provide those services.

Polaris Transportation Group has been known for its scheduled LTL service between Canada and the United States since 1994. The company now offers complete supply chain management for shippers, from transportation services to warehousing to digital solutions.

Forging Ahead

The pandemic served to underline, strengthen, and illuminate the mutually beneficial trade relationship between the United States and Canada. And in the aftermath of the pandemic, that relationship is more important than ever.

“We’ve seen a lot more business repatriated to North America,” explains Dave Cox, president of Polaris Transportation Group, a Toronto area-based industry leader in transit to and from the United States.

While driving on a business trip from Polaris headquarters just outside Toronto in Mississauga, Ontario, to the Cleveland suburb of Mentor, Ohio, Cox reflects on how the bonds between the North American neighbors grow year after year, through all challenges and changes.

“To me, as an entrepreneur and a business owner, these are exciting times,” he says. “These past three years have reinforced our ability to manage in a way that drives the Polaris culture of close connections with our teams. The pandemic caused us to strengthen our relationships through deeper conversations with our customers and partners.”

Pandemic-induced supply chain disruptions prompted collaborative efforts—always a hallmark of North American cross-border trade relationships—to increase, Cox notes.

“Carriers need strong relations with manufacturers and distributors,” he says. “These conversations are important. If I were a shipper, I would want to know I have a friend out there. We want shippers and distributors to think of us as good friends.”

Communication takes place at all levels, from sales to the C-suite, because Canada is mindful that as much as the United States depends on Canada, the reverse is likewise true. “We’re a trading nation,” he says of Canada. “Our standard of living depends on close ties to the United States.”

A Digital Passport for Freight

The heightened interdependence of the border-sharing neighbors presents an opportunity to build on their physical connections, Cox notes.

“I would like to see stronger efforts to streamline trade between Canada, the United States, and Mexico,” he says, adding he envisions a “trade union” where goods flow freely among the North American nations, as they do in the European Union.

“We have a fantastic opportunity,” he says. “Why not a digital passport for freight?”

As he sees it, a “digital passport” would function as something of a freight counterpart to the TSA PreCheck for airline passengers. Prior clearance through government oversight departments on both sides of the border—such as the Canada Border Services Agency in Canada and the Food and Drug Administration and Department of Agriculture in the United States—would serve to make the process of border crossings for freight more efficient and stress-free.

“At Polaris, we make it a point to know those agencies,” he says. “Wouldn’t it be wonderful if we had complete compliance already established? We know what we have to do on a daily basis and we’re very good at it.”

While recognizing and appreciating the relative speed and proficiency of border crossings handled by experienced logistics providers like Polaris, Cox says he believes there is always room for improvement.

“Business is coming back to North America,” he says. “So let’s make trade easy.”

FLS Transportation maximizes the benefits of cross-border trade between the United States and Canada by leveraging advanced technology and artificial intelligence systems. The team uses tracking and visibility tools to offer real-time shipping updates and enhance collaboration.

Knowledge Is Power

Giles Moore, the director of strategic accounts for FLS Transportation, also shares insights on the state of post-pandemic cross-border shipping.

While shipping volumes have remained strong, they have also stayed stagnant, he notes. Moore attributes this to the expected geographic differences between the two countries, leading to an imbalance between north and southbound volumes.

FLS Transportation, based in Atlanta, Georgia, with 17 offices throughout North America, specializes in cross-border third-party logistics (3PL) services. In addition to its expertise in over-the-road transport, the company offers customizable contract logistics functions such as warehousing, cross-docking, project logistics, and freight management.

Moore highlights the demand for Canada-specific providers due to the unique challenges of the Canadian market. Cross-border prices are more volatile compared to the domestic market, he notes.

Despite the challenges, the post-pandemic market has experienced double-digit growth, he states.

The recent scene of container ships waiting at major ports has emphasized North America’s reliance on Asian imports. As a result, many top companies have brought their operations and supply chain volumes back onshore, leading to an increased role for Mexico in the USMCA relationship.

Processes have returned to normal, but the availability of capacity has not increased significantly in the past decade, Moore acknowledges when asked about the return of pre-pandemic processes and supply chain disruptions. This has allowed shippers to recover some of the cost overages experienced during the pandemic, making cost a primary focus.

Moore emphasizes the importance of relationships in the logistics sector. While the close relationship between Canada and the United States provides an advantage for cross-border shippers, he also highlights the significance of strong relationships within transportation providers’ networks.

Maintaining a list of dedicated and satisfied partners should be a priority, as capacity is expected to tighten in the third quarter of 2023, he says.

Leveraging Advanced Technology

FLS Transportation maximizes the benefits of cross-border trade between the United States and Canada by leveraging advanced technology and AI systems. Their tracking and visibility tools offer real-time shipping updates, enhancing transparency, communication, and collaboration among the FLS team, carriers, and customers. This ultimately improves overall supply chain efficiency.

With their deep understanding of cross-border logistics, FLS provides comprehensive solutions tailored to the specific requirements of cross-border shipping. Their services cover freight forwarding, customs brokerage, compliance assistance, and transportation management across trucking, rail, air, and ocean services.

Although crossing processes between Canada and the United States are relatively smooth, FLS recognizes the importance of knowledge and familiarity. Their experienced professionals are well-versed in cross-border regulations, documentation requirements, and compliance procedures, ensuring smooth customs clearance and minimizing potential delays.

Enhancing Supply Chain Performance

The U.S. Department of Transportation and Transport Canada continue to work together to identify key data and metrics to assess the flexibility, travel time, and cost effectiveness of supply chain performance, notes a U.S.-Canada Supply Chains progress report issued by the White House in 2022.

The agencies aim to develop “a common approach to supply chain logistics data” that would allow them to build shared contingency plans to address any future supply chain disruptions.

“Over the past decade, the U.S.-Canada Regulatory Cooperation Council (RCC) has worked to support the alignment of regulations to reduce barriers to trade,” the report notes. “Continuing work should help support greater policy alignment between Canada and the United States in key areas of potential joint action, such as medical devices, critical minerals, electric vehicles and batteries, and solar energy, and strengthen supply chain resiliency between the two countries.”

In its final report, Canada’s National Supply Chain Force likewise stressed supply chain resiliency, especially in relation to the United States:

“In 2021, at the height of the COVID supply chain shutdowns, trade still accounted for 61% of Canada’s GDP. In 2021, Canada’s international merchandise trade amounted to approximately $1.24 trillion, a 16.8% increase from 2020—and the highest annual value of total trade on record,” the report states.

“In 2021 the United States accounted for $774 billion in total trade, comprising 62% of all Canadian trade that year. This trade would not occur without the backbone of the transportation supply chain.”

Charting a Clear Path

Canadian wildfires may have sent a haze of smoke over U.S. cities caught in their wind flow, but the skies remain clear and bright for continued cooperation in U.S.-Canada border crossings. For example, the RCC has worked with numerous Canadian and U.S. departments and agencies to develop successful regulatory work plans in transportation and other sectors.

As evidenced by President Biden and Prime Minister Trudeau’s statements, both countries understand international regulatory cooperation enhances economic competitiveness while maintaining high standards of health, safety, and environmental protection.

That’s good news for shippers and logistics service providers that contribute to a healthy bottom line for countries that are jointly mapping a path to progress.

Understanding how each market determines dangerous goods is not something any brand should be expected to know. Fortunately, there are solutions to avoid shipping shortcomings.

First, brands must have awareness, down to ingredient level, of what is and isn’t allowed into each country. But how can they do this with so many markets and shifting barriers to keep track of?

Regulations change constantly, so periodically reviewing how exporters and importers modify codes should, at the minimum, be a daily routine when it comes to internal logistics.

Another way for brands to stay on top of changes is by partnering with a company that takes on the back-end logistics work, such as a merchant of record.

Innovation is another modern solution that brands should tap into—as tech evolves and new solutions become available, potential new benefits to help back-end operations emerge.

Technology and Innovation

AI and blockchain are well worth the investment, as both can speed processes by eliminating manual work and increasing transparency in the entire supply chain. Early detection means that brands can easily mitigate previously unforeseen issues to prevent volatility.

While technology helps optimize logistics and reduce the overall complexity behind selling, new innovation capabilities can act as a double-edge sword. More visibility into the global supply chain is available for consumers as well, and today’s shopper has high expectations of the turnaround time from purchase to delivery. To cater to a customer base of heightened impatience, businesses are turning to onshore outsourcing to localize logistics.

By repurposing empty physical retail stores as fulfillment hubs, or moving inventory to onshore fulfillment centers, brands are able to position inventory as close to the purchaser as possible, accelerating delivery time.

This also means a shift in national consumer protection, including isolation policies and data privacy. While consumers want easy and quick access to products, having brands knowledgeable about where the majority of their customers are based—in order to relocate major aspects of their logistics operations—comes with some concern.

Governmental pressures to reduce trade with certain markets will dictate how easily brands localize to better serve shoppers. Those that are unable to provide onshore options may look toward sustainability to improve logistics.

While ultimately the customer decides on whether sustainability—and therefore longer delivery time—is preferred, brands should always embed the option into their logistics practice, as it is an aspect of cross-border commerce that is here to stay.

What is a Commercial Invoice?

Commercial invoices are customs-required, international trade legal documents that:

• Help customs officials quickly determine the tariffs, duties, and taxes that apply to a specific product or products
• Serve as a contract and proof of sale between a seller and buyer located in different countries

To attain clearance for an import or export, a commercial invoice is presented to customs officials, who then assess the amount due in taxes. In a busy customs office, where thousands of parcels come through daily, the quicker officials can determine the details that pertain to a product, the smoother the system runs. To streamline filling out commercial invoices correctly, templates are available to help capture all the required information about a package or product.

A commercial invoice follows a proforma invoice. A proforma invoice is not an invoice but an estimate of what a product or package will cost and when a buyer can expect a shipment.

How to Fill in a Commercial Invoice

To create a compliant commercial invoice, most international shipping companies use commercial invoice templates that request specific information:

• Date of purchase order
• Contact details of each party (company or individuals,) including an address for both the exporter and importer
• Quantity of goods, gross weight, and unit cost or value of goods sold
• The correct amount of monies they buyer is paying in the agreed-upon currency
• Specified conditions of payment and delivery terms
• VAT identification number and order reference number (this is a legal requirement)
• Applied tariffs or import duties
• Origin of included products and goods
• Type of transportation and shipping method utilized
• Seller’s signature (if required)

A commercial invoice is one of the most important documents in the import-export sales process. Logistical and legal ramifications are associated with an improperly filled-out commercial invoice template. A document that is missing information can result in a shipment delay. In most cases, the exporter, or seller, is held accountable for correcting the invoice.

Commercial Invoice vs. CN22 or CN23 Form

While the idea between the two documents (Commercial Invoice and CN22/CN23 forms) is the same, the CN series forms require the seller to fill out more information about the contents of a shipment. The purpose is to help officials determine if the contents are allowed in the destination country and what company is accountable for tax, tariff, and duty payment.

Commercial Invoice Terms to Know

These are terms commonly used regarding international trade, commercial invoices, and import and export requirements.

Intermediate Consignee

The Intermediate Consignee is the contact in a foreign country that serves as a delivery facilitator to the final purchasing party. This party could be a retailer or a designee by the purchaser authorized to pick up a shipped product.

Invoice Number 

The invoice number is the internal number on a template that helps tie the product to the shipping company.

Customer Purchase Order Number 

The customer Purchase Order (PO) Number is for internal tracking by the buyer. A PO number is usually numeric or alpha-numeric and helps the buyer track the shipped products and product batches.

Currency Used

Currency Used is the payment currency used in the final cost of the product, including tax, tariff, and duty, if applicable. The transaction would not go through if a buyer tried to use an unapproved currency. Specifying the currency ensures that both buyer and seller get what they are paying to receive in terms of units, quality and value.

Country of Origin

The Country of Origin is where the product originated. The Country of Origin designation does not have to be where the product was produced or manufactured. 

Reason for Export

The Reason for Export section on a commercial invoice covers why the product is shipping to the buyer (Repair, Gift, Sample, Personal Effects, Return, etc.) It is important because different classifications get processed under different procedures and protocols.

B/L/AWB Number

B/L/AWB stands for Bill of Lading and Air Waybill for tracking the purchased product on a commercial invoice template.

Final Destination

The Final Destination is the location where the products will ultimately ship.

Export Route/Carrier

The Export Route/Carrier section of the commercial invoice template lists the official corporate name of the company shipping the goods.

Terms of Sale 

Terms of Sale, or Incoterms, on a commercial invoice contain any billing stipulations or requirements associated with the deal. The Terms section covers which party pays shipping costs, insurance amounts, import tax, duty charges, or, when applicable, tariffs.

Terms of Payment 

The Terms of Payment section addresses how the shipment will be paid for, by whom, what amount, and the currency of the invoiced amount. The designated payer is not responsible for additional charges, although failure to pay might delay the order’s delivery.

Terms of Freight 

The Terms of Freight on the invoice template indicate what party pays and the point of purchase status (prepaid or collect.)

Number of Packages

This section covers the number of units included in the delivery of goods.

Comments 

The comments area of the template lets the seller add any other information about billing, payment, and proper delivery handling.

Contents

The Contents section on the template indicates specifically what is in the packaging.

HS Code 

This code is a number that helps to classify a product.

Value

The value of a parcel indicates how much a unit costs, regardless of the sale price.

Net Quantity

The Net Quantity is the total official amount of units in a parcel.

Weight kg 

The Weight kg is the weight of the package in kilograms.

Freight 

Freight is any unit or product that is shipped domestically or internationally.

Insurance

This part of the template indicates how the shipment is insured. 

Final Thoughts

The commercial invoice helps facilitate the delivery of an international package. It helps the buyer and seller and the people processing tax and shipping stipulations.

Near-sourcing, also referred to as near-shoring, occurs when a business works with a manufacturer that is located in foreign countries that are relatively close to end users.

Today, the two concepts have gained importance due to geopolitical events—such as the pandemic or rocky relations with China—that make global sourcing much harder to accomplish.

Does it Make Sense?

As the supply chain becomes increasingly unstable for many businesses, companies (and in some specialized cases, such as semiconductors, the U.S. government) are re-evaluating previously outsourced processes and materials as candidates for in-sourcing and near-sourcing.

However, are strategies such as in-sourcing or near-sourcing realistic? From an economic perspective, do they provide a real alternative? Today’s global supply chain is complex, and therefore, the answer also is complex.

Companies need to find points in the supply chain where they can reduce risk and find core competencies and economies of scale. They also must consider trade-offs such as lower inventory carrying costs, better quality, and higher service levels compared to potentially higher materials costs.

More specifically, before deciding to in-source or near-source, companies should take these steps:

• Examine key suppliers to better understand current and potential issues.
• Seek out secondary partners for critical needs.
• Explore in-sourcing some parts or elements to increase self-sufficiency.
• Review risks when considering bottom-line costs.
• Look at shifts in customer trends to guide production.

The benefits of near-sourcing include the opportunity to visit the manufacturing site more frequently, gain better control of intellectual property, operate in a more convenient time zone, enable quicker transit from manufacturer to customer and greater speed to market, and improve quality control and supply chain efficiency.

For example, to increase speed and agility, fashion retailer Zara has been moving production from Asia to Morocco and Turkey. And footwear manufacturer Nike has moved some production from China to Mexico.

Is it Feasible?

Some firms may find that in-sourcing, outsourcing domestically, or near-sourcing are not feasible for reasons that include cost, delivery speed, reliability, and control.

Near-sourcing also has its limitations, such as high labor, supplies, and tax costs, a restricted talent pool, training workers for production changeovers, decreased process monitoring, and increased security threats.

While off-shoring to low-cost sites in faraway places may still make sense, other criteria such as agility and flexibility have become more important when making sourcing decisions in these volatile times.

For instance, 88% of respondents to a 2022 Capterra survey of supply chain professionals at small and mid-sized companies say they plan to switch at least some of their sourcing to suppliers closer to the United States, while 45% say they plan to switch all of their suppliers.

Some firms open factories or strike deals with vendors in the United States, Mexico, or elsewhere near home. Others seek alternatives to China in South or Southeast Asia. And some, like one client of Washington, D.C.-based FTI Consulting, plan to source from different regions to support different markets.

“The company is looking at India, Vietnam, and other places to support the EMEA [Europe, Middle East, and Africa] market,” says Ron Scalzo, senior managing director with FTI’s Corporate Finance and Restructuring section. “They are also looking at Mexico, or possibly onshoring in the United States, to support the U.S. market.”

Outsourcing to countries other than China is nothing new; Mexican maquiladoras have served U.S. brand owners since the 1960s. But for companies that rely on China’s prodigious manufacturing ecosystem, several recent factors are prompting a fresh look at other parts of the world.

Tariffs, COVID, and Conflict

One factor is the trade war that revved up in 2018, when the United States imposed hefty new tariffs on Chinese imports. One document, known as List 3, named about $200 billion worth of goods from China that would incur additional tariffs.

“When that list came out, business contacts started asking me to look for alternative manufacturing sources for them,” says Erik Brigham, who at the time ran an export business in Thailand. Observing a demand for Thai suppliers, Brigham launched a new enterprise to fill the need, Bangkok-based Thailand Sourcing.

Then came the pandemic and China’s Zero COVID policy.

“The pandemic introduced risk into supply chains like we’ve never seen before,” says Rosemary Coates, a supply chain consultant and executive director and chair of the Reshoring Institute, a nonprofit that helps U.S. firms start manufacturing in the United States.

“Companies couldn’t get product out of China,” Coates says. “They had real difficulties with the factories opening and closing. That’s still happening today.”

Along with production delays in recent years, port congestion and high shipping rates have also made some companies rethink long supply chains rooted in China. Consider the U.S. fashion industry.

“When there was port congestion coming out of China, some U.S. buyers responded to the long lead times by buying and storing larger quantities,” says Raine Mahdi, founder and CEO of Zipfox, an online sourcing marketplace with an initial focus on Mexico. “But that means more cash tied up for longer.”

With much shorter lead times on orders from Mexico, clothing brands can buy in smaller increments.

Other factors turning U.S. companies away from China include ongoing geopolitical tensions, concern about intellectual property, and—for some —the desire to label their products Made in the USA.

“There has always been a subset of consumers who might want to buy American,” says Scalzo. “That subset is growing.”

Breaking Up is Hard to Do

Whatever its reasons for moving away, a U.S. company entrenched in China might face a tough transition. First, cutting old ties can be tricky. “For example, if you have shipped a mold or tool to China to assist with production, you’re never getting that back,” Coates says.

Also, departure can turn a supplier into a competitor. After you’ve taught a manufacturer where to source materials and how to make your product according to your standards, when you leave, that knowledge stays behind. “They’re going to continue to manufacture your product and label it differently,” she warns.

For a company that owns a factory in China, multi-year employment contracts can also complicate an exit. “You have to pay out to the end of that contract,” Coates says. In a plant with thousands of workers, that’s a big expense.

The search for non-Chinese suppliers or contract manufacturers can also prove challenging.

“When you enter China, there’s a massive city that has 2,000 factories, of which 100 will meet with you,” says Kevin McGaffey, founder of Bangkok-based MOTOA Group, a sourcing company that specializes in finding alternatives to China. “You have time for 10. Five or six will say ‘yes,’ and four will be competitive.

“Try that same thing in Gujarat, India, Haiphong, Vietnam, or Samut Prakan, Thailand, and you will have a very different experience,” he adds.

Even when you locate a capable supplier, you won’t find the same supportive infrastructure that China provides.

“It’s not just where your plant is, but where your raw materials and components are coming from,” Scalzo says. Those sources tend to be in China or other parts of Asia. “How do you begin to shift the entire supply chain going upstream?” he asks.

A firm that moves out of China must also learn to navigate a new business culture.

For instance, in Latin America, personal relationships are crucial.

“You can’t just e-mail or text a supplier and say, ‘Can you make this product?’” explains Amy Wees, founder of Amazing at Home, an Austin-based consultancy for e-commerce merchants and co-founder of the EvoLatam Expo, an annual trade show in Mexico that introduces e-commerce brand owners to Latin American suppliers.

“You need to go in person and build those relationships to get things done,” she says.

Also, suppliers in Mexico aren’t always well-versed in the nuts and bolts of contract manufacturing. “It’s not that Mexico doesn’t have those capabilities,” Wees says. “It just requires more of a partnership and conversation.”

Companies migrating from China to another Asian country could get a shock when it comes time to negotiate a business deal. “I’ve visited 80-plus executive teams and owners, and they’ll say, ‘I don’t understand why this is difficult and why these terms aren’t what I want,” says McGaffey.

Chinese suppliers can rely on their government to finance production, but their counterparts in other countries look to their buyers for that money, he adds.

Brigham agrees that buyers will need to get used to different purchasing terms.

“If you’ve been getting net 90 days out of China for 20 years and then you move to Thailand, don’t be surprised if they want 30/70 FOB [30% deposit/70% due upon transfer of the bill of lading],” Brigham says. “They want skin in the game. Even if they don’t need the money, to them it’s an important part of building trust.”

Steps for Success

If you’re looking for alternatives to China, one important early step is to establish which criteria you’ll use to choose the new country and new suppliers.

“The criteria is a little different for everybody,” Scalzo says. “The basics are available labor, access to raw materials and components, and infrastructure.”

Along with what’s available now, keep in mind how the infrastructure is likely to improve in the coming years. Take Mexico, for example.

“The infrastructure for trans-border Mexico to U.S. support is not nearly what it needs to be,” says Scalzo. But we’re likely to see new investment, particularly in rail facilities, to support more cross-border trade, he says.

For companies trying to decide whether to reshore to the United States, the key might lie in how much labor their processes involve.

“If the process involves sewing, high labor content, and high-touch labor, then look for a low-cost country if you’re going to move out of China,” Coates advises. “If you are highly automated, or plan to be, the economics shift significantly.” Then it’s possible to make the case for domestic production.

Some further advice from the experts on sourcing from a country other than China:

Do the homework. “Go through the same steps you would when vetting any new supplier: Get quotes from a few different people, ask for samples, start with a prototype or small order first, test the relationship, work out the kinks,” says Mahdi.

Meet in person. Before Wees started leading sourcing trips to Mexico, she once asked a supplier there to give her a quote for a product she wanted for her own e-commerce business. “Their quote was higher than I sell that product for at retail,” she says.

Then Wees made a visit. Face-to-face discussions revealed that many Mexican suppliers thought Americans wanted to buy their existing products at wholesale rates. Once Wees explained that she was a brand owner, developing her own products and looking for a contract manufacturing relationship, she received more palatable quotes.

Consider the total cost. The cost per unit to produce an item in Mexico is generally higher than in China. “However, once you take into consideration that you’re not paying tariffs, in many cases you will realize a savings,” Wees says.

Be flexible. When approaching a potential supplier, don’t get hung up on the way you operate in China. “You have to manage your expectations and realize that it’s like a first date with a person from a different culture whom you’ve never met,” McGaffey says.

Don’t delay. While Mexico has enough production capacity today, that could change. “Some factories are already saying they can’t take any new business because they’re inundated with orders,” says Mahdi.

Now is the time to start making connections. “Make the decision to at least start testing manufacturers in Latin America and start establishing relationships, even if at a small scale, keeping somebody in your pocket as a backup supplier,” he advises.

The same goes for other parts of the world. “If you are able to get a quote from Thailand specifically, and you’re working with someone you trust, take it very seriously,” Brigham says. “And think about what it would mean in the long term to have a diverse supply chain for this specific product, even if it costs a little more up front.”

If, for your purposes, you think of China as a sinking Titanic, and countries such as Vietnam and India as potential lifeboats, make sure to secure your place while capacity remains. “If it’s Southeast Asia you want to go to, it’s filling up fast,” Brigham says.

Tomorrow’s Regional Trade Growth Leaders

World Regions 2021-2026:
Predicted Export Volume Growth Rates

Trade growth is spread across a wider variety of countries, according to DHL’s Trade Growth Atlas 2022. China accounted for 25% of trade growth in recent years and is predicted to continue to have the largest growth, but its share is likely to fall by half, to 13%.

Vietnam, India, and the Philippines stand out in terms of both speed and scale of projected trade growth through 2026. All three have potential to benefit from efforts to diversify China-centric strategies. While emerging economies increased their shares of world trade from 24% to 40% between 2000 and 2012, with half the increase driven by China alone, these shares have barely changed over the past decade.

Emerging economies continue to race forward on measures of connectivity, innovation, and leading companies. They are becoming more important exporters of sophisticated manufactured products, and increasingly compete not only on low costs, but also on innovation and quality.

New Tools For Sourcing From Latin America

Raine Mahdi founded the Zipfox online sourcing marketplace to give buyers an alternative to platforms such as China-based Alibaba and Global Sources. Those platforms pose risks, Mahdi says, because they sign on as many suppliers as possible. That leaves buyers to search through a field of listings with no clue about which vendors offer good value.

“If you’re looking for T-shirts or phone cases, do you need 500 options?” Mahdi asks. “Or would you rather have 25 high-quality options, maybe with different sizes and different minimum order quantities?”

Zipfox launched in 2022 as a place to find Mexican suppliers, which Mahdi says his company vets carefully before letting them join the platform. Eventually, Zipfox aims to become a global marketplace, with plans to expand into Central and South America in early 2023. “We’ve put feelers out in Egypt, South Africa, and India, just to test the markets,” he adds.

In the long run, Zipfox will probably even add Chinese suppliers. “But now is not the time,” Mahdi says.

For buyers—especially e-commerce brand owners—who want to make in-person contacts in Mexico and beyond, the EvoLatam Expo offers a chance to check out suppliers in many different categories.

“Most of us don’t just sell things made of wood, or just household goods,” says Amy Wees, an online merchant, e-commerce consultant, and co-founder of EvoLatam. “We’re used to going to trade shows like the Canton Fair in China, ASD in Las Vegas, or Global Sources in Hong Kong.”

When Wees and her business partner started to lead sourcing trips to Mexico, they found trade shows for single categories, such as ceramics. “But there was nothing that would help an e-commerce brand owner source from multiple categories at once,” she says.

They founded EvoLatam to fill that need. “If we were going to evolve e-commerce into sourcing in Latin America, this was an absolute requirement,” Wees says.

The Challenges of Cross-Border Logistics

Shipping across borders requires a unique set of considerations. Warehouses, cross-docking facilities, and distribution centers in the United States must account for potential delays caused by inspection agencies when navigating the complexities of shipping between Canada and Mexico.

In fact, recent changes from the Department of Homeland Security are now requiring 100% of all vehicles coming from Mexico to be screened with Customs and Border Protection (CBP), raising concerns about further exacerbating border congestion. While transit over the U.S.-Canadian border is significantly quicker than its southern counterpart, maneuvering freight across the northern border can still be tricky business. 

While there are considerable challenges to cross-border logistics, it is still significantly more efficient, in many cases, than overseas shipping, which continues to face unprecedented delays and supply chain disruptions.

Furthermore, companies nearshoring their supply chains need not navigate these complexities by themselves. To take full advantage of the benefits associated with nearshoring without the difficulty of learning cross-border logistics from scratch, companies often turn to third-party logistics (3PL) providers.

Cross-Border 3PLs: Three Considerations

By partnering with a 3PL, businesses are able to focus on their core competencies without throwing transportation management and cross-border logistics into the mix. The right 3PL partner will bring decades of experience and relationships to the partnership, helping businesses navigate the complexities of cross-border logistics, ensuring their shipments arrive on time, every time.

While many 3PLs offer cross-border logistics services, their quality ranges widely. Here are three key considerations when evaluating the cross-border services of a 3PL:

1) Prioritize Strategic Geography

Homeowners know that when it comes to real estate, location is everything. The same is true for logistics companies. When considering a 3PL partner for cross-border services, it is important to ask about their presence in three places:

• At the border
• On the Canada/Mexico side of the border
• On the U.S. side of the border

The CBP recognizes 328 ports of entry throughout the United States. Having warehousing or cross-docking options near those points is crucial to executing smooth and timely cross-border shipments. Despite the fact that many 3PLs may offer cross-border services, some of them do not have trained staff at or near the border.

When problems arise and logistics experts are not nearby, solving these time-critical problems can be much more difficult. By prioritizing a 3PL partner that has strategic locations along the U.S. border, companies ensure that knowledgeable personnel will be present where most needed: the border crossing.

Additionally, it’s important that 3PLs have strategic locations further inland of the border on either side. Having cross-border logistics experts present at the border should be a minimum requirement for considering a 3PL provider with cross-border services. But it’s also important to choose a 3PL partner with personnel present on both sides of the border. A 3PL company with trained staff in the United States as well as Mexico and Canada can take advantage of a more robust infrastructure of locations and offer higher-quality service grounded in deep relationships with carriers and customs brokers.

2) Utilize LTL for an Efficient Hub and Spoke Style Distribution Model

Flexibility is key to logistics, and utilizing less-than-truckload (LTL) shipping provides more flexible shipping options for distributors with faster transit times and lower costs. However, coordinating LTL shipments is complicated. It requires sophisticated management, and to get the most out of it, a 3PL company must have a large network of consolidation points. This network should include sites for cross-docking, transloading, as well as short-term and long-term warehousing.

While some 3PLs offer customer consolidation, which places responsibility and liability on the customer, others offer true LTL consolidation for cross-border shipments which maximizes trailer utilization, reduces mileage, and reduces handling—all of which result in lower prices. After all, cross-border logistics isn’t just about filing paperwork to get shipments across the border. It’s ultimately about getting products to their final destination on time, on budget, and damage free.

3) Look for Highly Trained, Bilingual Staff

When companies nearshore operations to Mexico, one new challenge is the language barrier. Given the complications of cross-border logistics and the possibility for changes at a moment’s notice, clear communication between all parties involved is critical. To remain competitive and ensure that shipments are made efficiently, 3PLs must have highly trained personnel ready to do business in various languages. 

Relying on translators for skilled staff can result in vastly different customer service for shippers depending on their location. When skilled staff are available to do business in both languages, customers on both sides of the border receive the same level of quality, and shipments are handled with the same level of care.

Rolling into a Successful Future

As concerns over an economic recession loom large, many companies are looking to nearshoring as a way to become more adaptable to consumer changes. In uncertain times, shippers can’t afford the 60-to-90-day lead time for products sourced from Asia. The future for many companies will involve diversified supply chains to mitigate risk and adapt quickly to changing environments, whether from pandemics, inflation, or whatever may come next.

Cross-border shipping will always have unique nuances depending on the global political environment, changing government-mandated compliance standards, and unforeseen events. However, with innovative strategies for operations and a 3PL provider that can share valuable insights, operations can roll smoothly for years to come.

Andrew Welling is the director of cross-border services at TA Services. With more than a decade of transportation management experience including shipping, transloading, consolidation, 3PL, and international logistics, Welling brings a diverse background to customers. He earned his graduate degree in business administration, finance and his undergraduate degree in supply chain management, marketing, and international Studies.