News / Capacity crunch gives shippers a headache as US-Mexico trucking rates soar –

US-Mexico border

US-Mexico trucking is no smoother since USMCA, the revised trade agreement between the US and its neighbours that replaced the NAFTA framework on 1 July, was roundly welcomed by trade groups.

It has not eased capacity problems on the US-Mexico border and trucking rates continue to go up as a rising tide of cargo is struggling to move.

And capacity is set to tighten further, which will push up rates even higher, warned Troy Riley, president of Redwood Mexico, a division of Redwood Logistics set up two years ago to provide cross-border solutions.

He added that overall lead times were likely to be stretched further as demand has been building in several sectors.

“The automotive and manufacturing sectors continue to drive increased demand for capacity in the market, as their production ramps up to pre-Covid levels.

“This, coupled with the fact that the consumer and retail sector is coming back on line, will increase capacity demand even further and put additional pressure in the market.

“Retail inventory levels have been at an all-time low, but with the holiday season approaching, demand is coming back strong,” he added.

The Covid-19 lockdown in Mexico stopped automotive production in its tracks, and as the sector rebounds, demand for capacity has soared, said Carlos Duron, president of Mexpress, which runs a bonded airfreight trucking service across the border.

Mexpress business remained strong through the lockdown due to the lack of bellyhold capacity in and out of Mexico, said Mike Gamel, chairman and vice-president of sales & marketing.

“Our bonded truck service is the next best thing to an air service, since we don’t have to clear freight at the border, as all other trucking companies do. A lot of international forwarders we have chased over the years are now using