Asian air exports shipped to Mexico — by truck

Fewer direct, all-cargo flights from China to Mexico and more ocean shipping delays during the pandemic have boosted interest in logistics service that packages an air leg to the U.S. with cross-border trucking at a substantial price saving.

Mexpress Transportation’s expedited road feeder service to and from Mexico has more than doubled in volume and revenue during the past two years, executives say. The air-road option is available to domestic and international forwarders, airlines and customs brokers.

“Since our cargo is not cleared at the border, it basically slingshots the cargo across the border, avoiding all the delays, costs and shortages of customs officers,” President Carolos Duron said in an email.

Dimerco, a Taiwan-based international freight forwarder, recently began offering the multimodal option to suppliers shipping high-value components to manufacturing plants in Mexico after a successful project supporting 15 automotive vendors in late 2021. 

The new Air + Road service enables businesses to ship door to door in six to eight days as a substitute for very limited direct freighter service. 

Transshipping Asian exports in the U.S. increases transit time by two or three days compared to direct flights to Mexico but is 30% to 40% cheaper than air only, according to Dimerco. 

Passenger service from southern China to Mexico has been very limited since the COVID crisis disrupted international travel. More recently, scheduled freighter services disappeared. The passenger flights are unable to load the largest pallets or heavy, over-dimensional shipments and have limited space for freight. 

Motor carrier mimics an airline

Flying factory components to major U.S. gateways and trucking them to Mexican manufacturing facilities has increased in the past year because Cathay Pacific and Qatar Airways discontinued service to Mexico, logistics professionals say.

Cathay Pacific was forced to suspend more than 80% of its freighter operations this year because it didn’t have enough pilots after the government of Hong Kong upped the quarantine period to seven days for locally based crews returning from international trips. Freighter flights to the Americas remain limited. 

“While Asia-U.S. capacity is still constrained, the absence of [freighter] flights from Asia to Mexico makes flying cargo to LAX and trucking it into Mexico one of the few viable options available,” said Brandon Fried, executive director of the Airforwarders Association. 

Mexpress Transportation, headquartered in Santa Clarita, California, operates like an airline across the U.S. Southern border because airfreight capacity to Mexico is scarce and truck pricing is more competitive. It is the primary carrier with special permission to bypass the Mexican border clearance process and and carry less-than-truckload freight to airports.

Other smaller, or different, companies provide similar service. Union Pacific provides a Mexico Direct service where southbound shipments don’t stop at the border for clearance, but at a destination in Mexico. And Mexamerica offers direct truck service from San Diego to Tijuana manufacturers.

Normal trucking companies can’t mix loads from two forwarders/customs brokers on the same truck and cross into Mexico. Under the complex and inefficient system at the border, truck shipments have to be transferred to a Mexican customs broker who verifies the contents and reloads the freight on a local shuttle truck, a process that can add three to five days to the journey.

It took Mexpress more than three years to get the special authority in 1998. 

“We went to the Mexican government and said your truck service is too slow for clearance at the border and airfreight is too expensive. They needed something in the middle,” Gamel said in an interview.

The trend toward air-road service picked up four years ago as manufacturers shifted more production to Mexico in response to Trump administration tariffs on China-made goods, Alexandra Kleinschmidt, vice president of customs brokerage and trade advisory services at Houston-based Crane Worldwide Logistics, said.

Logistics companies take advantage of customs rules on both sides of the border to maximize transshipment benefits. Mexico, for example, has an option to clear the cargo as air cargo even if it crosses the border by road. Here’s how the system works: 

• Inbound shipments from Asia are recovered by Mexico-bound trucks or temporarily stored in a bonded warehouse within a free trade zone, which allows the customer to avoid U.S. duties and taxes since the freight isn’t entering domestic commerce. 
• Cargo is trucked to the border under a bond that allows it to move without Customs clearance at the U.S. port of entry or land crossing. 
• Carrier takes the shipment to an international airport closest to the consignee, where it is treated by Mexican Customs as an airport-to-airport shipment. 
• When the shipment clears, the forwarder puts it on a standard truck for local delivery to the end user.

The process speeds up transit time and decreases physical handling of the goods because no further border inspections or customs verifications are required.

Most of the cross-border airfreight transported by Mexpress is for foreign-owned export manufacturing facilities in the Golden Triangle, a large tri-state area in western and central Mexico, not close to the border. 

It runs consolidated loads from the Dallas-Fort Worth and Houston airports to Queretaro, Mexico City, Guadalajara and Monterrey multiple times per week, with overnight next-afternoon or second morning delivery. LTL service from Los Angeles to Guadalajara is three times per week and to Mexico City every Friday.  Truckload service is available with 24 hours notice to 14 airports in Mexico.. 

The motor carrier also moves a large amount of e-commerce from China to Mexico City where it is handed over to small package carriers designated by the customer, said Duron.

Comprehensive security measures

The complexity of complying with Mexican requirements, Gamel said,  has kept other motor carriers from copying the Mexpress mode.

The security measures alone are daunting. 

Loads are moved with team drivers for speed and to minimize the risk of theft at rest. Mexpress trucks have steel, instead of wood,  floors to prevent unauthorized access. They are sealed with Mexican airport seals that can’t be broken en route, even by police or the military. The doors have their  pins welded in place so thieves can’t use a forklift to remove the doors with the seal intact and put them back after taking everything inside. Both the tractors and trailers have satellite tracking. Dispatchers can tell if the doors have been compromised in transit and if a truck goes off its prearranged course they can remotely disable the vehicle. And Mexpress only operates on expensive toll roads in Mexico that are safe from gangs.

The Mexican customs entry form Mexpress issues, called a pedimento, is issued for the destination airport, not the border checkpoint. The pedimento includes specific information about the goods, the value of the commercial invoice and the trailer number, which criminals can get from inside informants or other means. 

“We go under the radar. You don’t even know that our trucks are in Mexico. We look like an airplane” Gamel told FreightWaves. “Nobody sees us crossing the border. That’s big from a security standpoint.”

More air-road services are connecting through Columbus, Ohio; Huntsville, Alabama; and Cincinnati- Northern Kentucky as freight forwarders increasingly direct chartered freighter flights to less congested secondary airports that cater to cargo, Duron said.  

At Long  Beach, California-based forwarder Norman Krieger Inc., customers that bring products from China through Los Angeles to Tijuana or Mexicali, Mexico, typically use ocean transport, but Vice President Andy Frommenwiler said the deferred airfreight option is becoming more attractive as COVID lockdowns in China choke port throughput. 

Dimerco’s multimodal Mexico service

The Dimerco Air + Road service began as an effort to help customers in the metal stamping and die industry ship automotive components from southern China to a common manufacturer in Monterrey, Mexico, according to company officials. The product combines the company’s negotiated space commitments with cargo airlines and the Mexpress cross-border transport. In China, shipments are manually inspected because they are too large for X-ray examination, and repacked in custom crates.

Monterrey Airport is the third-largest international airport in Mexico. The region produces much of the steel used by Mexico’s automotive industry. 

Dimerco’s standard service is also available to Guadalajara, Queretaro and Mexico City.

The logistics service provider books shipments with scheduled cargo services because they are significantly cheaper than dedicated charter flights.

Since last October, Dimerco has managed 76 shipments weighing a total of 81 tons from Guangzhou Baiyun International Airport to Mexico.

Gamel said many forwarders and ocean carriers are diverting containers to the Port of Manzanillo to avoid congestion in Los Angeles and Long Beach.

Mexpress uses its special authority to pick up cargo that is transloaded into company trailers at the port and deliver it to the U.S. without going through a Mexican customs broker. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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