Looking Forward: The Rise in Trade with Mexico and Canada
October 5, 2015 Transplace

Looking Forward: The Rise in Trade with Mexico and Canada

By: John Kelly, President of Transplace Canadian Division

Nearshoring and even re-shoring have become very real happenings in North America. Due to a number of factors, including increased production costs in China, a rise in shipping costs for ocean and air freight, congested ports and labor unrest, many companies have chosen to move product manufacturing or assembly to Mexico. This in turn has caused an increase in order volume for finished goods traveling from Mexico to Canada, particularly in the automotive and consumer electronics industries.

Third party logistics providers (3PLs) are now facing the task of balancing a mixture of these three economies in order to efficiently move product. Additionally, American-based carriers face bigger issues such as driver shortages, currency fluctuations and changing regulations – and these issues are drastically affecting all three North American economies. Transportation service providers must respond to the growing uptick in trade while also dealing with the common, yet significant issue of capacity imbalance.

Here are a few key insights that shippers can follow to get in front of the increasing freight volume moving between Canada and Mexico (and the U.S. in between):

  •  Data is king: Be data rich in freight and be sure to be tracking and tracing both inbound and outbound shipments.
  •  Become forward-looking: Look as far ahead as possible to accommodate future orders.
  • Communicate: Between shippers and carriers, communication is the number one key to success. Utilize your Electronic Data Interchange (EDI) to keep carriers in the loop.
  • Collaborate: Become more proactive and solutions-oriented by focusing on “what can be done” instead of worrying about what already occurred.

So, what can shippers look forward to in the near future? It will certainly be interesting to monitor the progress of trade as NAFTA has cleared the way for Mexican trucks to make their way across the border. Looking to the future in Canada, customers will rely on 3PLs to be forward-looking as well as add further value not just in cost, but in capacity and data.

To learn more about how shippers can adapt to the rise in trade in Canada and Mexico, check out the video below.

Which factors do you find most challenging in moving freight across North American borders?

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