Collaboration In Logistics Between Stakeholders On The U.s.- Mexico Border Is Critical To Economic P

By Author: Alan Russell
Total Articles: 53
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In the world of manufacturing and logistics in Mexico, it is a fact of life that the most efficient use of a single tractor to transport goods requires that it be accompanied by and have access to three trailers. To people who do not work in the transportation and logistics industry, or a related occupation, to be made aware of this might be surprising, or even seem counter intuitive. Some may even come to the erroneous conclusion that this set of circumstances must surely be indicative of inefficiencies in supply chains, or of the wasteful use of limited and valuable resources.

In a Just-in-Time (JIT) manufacturing environment production, cannot withstand a potential disruption in the flow of materials utilized to make products. Empty trailers are in constant motion. They traverse our highways seeking an inflow of raw materials in order to subsequently trek back across the border into Mexico to on-load finished goods. One important goal that is common to all transportation companies is to minimize the amount of time that their equipment is on the move while hauling nothing but air. Moving empty trailers is not an efficient ...
... use of these valuable pieces of capital equipment.

The fuel, time, labor and associated maintenance of transportation equipment are always a target for reduced costs that companies so desperately desire in order to maintain a competitive advantage in a world that is characterized by tight profit margins. Some individuals will argue that JIT has met its capacity, and that industry is now paying the price for efficiencies that have been gained over the last several years. Still others will argue that security, at the behest of a protective government, is slowing down the flow of commerce. Another plausible scenario holds that, in the final analysis, no one really cares about the issue.

Collaboration between all the stakeholders in the international trade supply chain process (manufacturers, transportation and logistics companies, and government entities) is a critical element in overcoming some of the challenges that have been outlined in the preceding few paragraphs. In less than boom times for the economy and for the industries that fuel it, it is of paramount importance that a seat at the table be reserved for and occupied by representatives from each of the aforementioned parties. By getting trade flow right between El Paso and Ciudad Juarez, the region will have done much of what is required to make itself the premiere location for manufacturing and logistics in Mexico, as well as for distribution on the U.S. side of the border. Of course, the goal of any collaboration between these groups is achieving the safe, secure and fast movement of merchandise across the international boundary.

Accomplishing quicker crossing times across congested international bridges without giving safety and security issues short shrift is no easy task. Fostering an on-going, productive and actionable dialogue between government agencies and industry is a challenging proposal. This is often because the mandates given to each of these groups are sometimes at significant odds. Collaboration and closer communication can result in greater alignment between all parties to the process. Both Customs and Border Protection (CBP) and private industry will increasingly be in need of such efforts due to the pressures that an ever increasing volume of trade will create.Third party analytical processing is proving to be successful in reducing secondary inspection rates at Customs, and is justifying trusted shippers’ benefits. Customs and Border Protection advertises 3% secondary inspection rates for trusted shippers that are C-TPAT validated. The expense of third party monitoring services of this activity is clearly justified, as the cost of these inspections can be overwhelming. Project-21 provides such a service.

A company that has the ability to understand the time and ensuing economic impact of how it transacts its shipments is a tremendous value. Once shipping time is determined and evaluated any finance department can determine the economic impact, and be able to understand what limits its logistics model has. Subsequently, that company can make adjustments that will result in more efficient use of assets. This will give a corresponding boost to its bottom-line.

Logistics, like any other business endeavor, is developed in great part around relationships. Approaching CBP with information in hand that clearly demonstrates the impact to a logistics model that speed of transport has not only helps an entity to protect its value, but also is a tool to be utilized for building relationships between government and private industry workers. Simple, and easily clarified, misunderstandings concerning the how’s and why’s of logistics often have a large negative impact on border wait times. Suspicions can be obscured by regulations, and justified through mandated security protocols. Engaging government trade agencies through the power of statistical analysis can be an effective and rational way of catalyzing change. Many companies are now voluntarily approaching CBP, DPS as well as the FDA, among others, in order to explain their mode of operation and the reasons behind the decisions that they make. Taking this first step in the spirit of open and two-way communication in a fluid border environment is an important move in the right direction.

Over time, regular and meaningful collaboration will inevitably result in significant cost savings for industry, as well as to make things safer and more transparent for Customs and Border Protection. Reducing border crossing times is a fundamentally important goal that needs to be accomplished, and no one entity can make this happen alone.

Optimal utilization of capital assets, such as tractors and trailers, is imperative for transportation and logistics companies in the private sector to maintain their competitive edge in the manufacturing and logistics industries in Mexico, as well as on the U.S. side of the border. The infrastructure for border crossings between El Paso and Ciudad Juarez is experiencing a time of change. In order to increase efficiencies, all parties involved must work together on self-reporting and security. The result of working toward these ends as a group will move trade faster. This will have positive economic effects for all those directly involved, as well as for the broader economy.

K. Alan Russell, President and C.E.O. of the Tecma Group of Companies. manufacturers in Mexico, Mexico manufacture, nearshore manufacturing