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Trimble Insight 2024: Cross-Border Experts Discuss Technology Needs and Building Relationships

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In recent years, there’s been significant growth in cross-border trade and freight movement between the United States and Mexico, with a total of $560 billion in trade between the two countries between January and August 2024. At the same time, nearshoring, the development of new facilities and warehouses at the border, is also greatly on the rise. In a special session at the 2024 Trimble Insight Tech Conference, a panel of experts explored the impact and future of cross-border freight movement and increased nearshoring. 

The panel discussion was moderated by Noi Mahoney, a reporter for FreightWaves who regularly covers logistics and supply chain news, and the participants included experts on cross-border trade operations: 

    • Matt Silver, CEO and co-founder of Cargado, a startup that offers an invite-only platform for booking freight movement in and out of Mexico.
    • Patty Hinojosa, vice president of Mexico sales and operations for CargoQuotes, a freight brokerage service provider that specializes in cross-border shipments.
    • Edward Habe, vice president of Mexico sales & services for Averitt Express, a leading provider of freight transportation cross-border solutions.


The State of Nearshoring and Cross-Border Freight

Cross-border freight movement has been greatly impacted by the expansion of nearshoring. In 2023, the construction of manufacturing facilities in Mexico grew by 47% compared to the previous year, according to research from the Brookings Institute. Nearshoring has the potential to boost the growth of Mexican manufacturing exports to the US from $455 billion currently to approximately $609 billion by 2029, based on projections from Morgan Stanley analysts. And a recent Transporeon report noted that nearshoring will have the greatest impact on North American freight businesses in the coming years.

A key theme during the discussion is the need for more technology infrastructure and collaborative tools to make cross-border trade and transportation logistics in Mexico more efficient, transparent and reliable to keep up with the growing demand.

According to Silver, “The current technology landscape [in Mexico] basically is none right now. Everything has been built for the US because everyone sees that as a big market.” He noted the technology in the US is much harder to deploy in Mexico and he’s seeing several brokers trying to use too many different tools that are not compatible. Based on her long-time experience in this space, Hinojosa pointed to the ease of cross-border relations and interactions with Canada as a good model, and she’s looking forward to the next five years to hopefully see the new tools that are developed to make the process more fluid in Mexico.

Habe said his trucking company’s border facility is their best-operating facility and called out the “phenomenal” construction and development happening at the border, particularly in Laredo and the surrounding areas. He says the reward for those who invest in this market will “pay for itself over many times.”

According to Data Mexico, the Foreign Direct Investment (FDI) from the US to Mexico was $13.7B from January to June 2024, demonstrating the ripe opportunities for advanced technology solutions in this market.

Silver believes we’ll see more technology investments in this space in the future. In fact, shortly following Insight, Silver’s company Cargado launched the first-ever load board to allow companies to book cross-border freight in a centralized space, bringing together brokers and carriers in one platform.


Visibility and Safety Concerns

Along with technology needs, Mahoney asked the panelists about the issue of visibility when it comes to bringing freight into Mexico, saying he’s heard it referred to as a “black hole” and that delivery and return delays are a common occurrence.

Habe shared, “We pick up full trucks all over Mexico loaded with LTL shipments that already have tracking numbers on them. In many cases, those tracking numbers have already been given to their customers in the U.S. Unfortunately, it could be two to four days before that trailer arrives to Laredo, or El Paso, or wherever, and then those shipments get uploaded. So, you have a lot of customers looking for the freight, punching in PRO numbers that have no visibility, no history, and that's causing grief with a large number of our customers.”

Hinojosa’s company requires Mexican carriers to share their GPS data and permitted stops. Their team monitors trips and if they see a truck has stopped for three or four hours, they question what’s going on and take steps to avoid any bad situations. Crime and freight fraud in Mexico continue to be an issue to navigate for US companies exploring trade and development opportunities at the border. The cartel’s presence in several cities along the border poses a risk of theft, smuggling, drug activity, violence and other problems.

In one of Mahoney’s recent articles, he reported “Mexican authorities recorded 382 cases of theft from railways in July, a 119% year-over-year increase from the same period in 2023.”  In another piece, he wrote, “In August, 142 cargo trucks were stolen or robbed, a 2.8% year-over-year increase from the same period in 2023.”

Increased security measures and more established technology solutions that foster collaboration and visibility for cross-border freight movement, like Cargado’s new platform, will help start laying a strong foundation, and the burst of new business development make this an area of increased focus for investors and developers to consider.


How Companies Are Building Relationships

With interest in cross-border operations surging and several high-profile companies starting to invest, the panelists talked about the importance of not doing it alone.

Habe recommended hiring staff based in Mexico or employees who speak Spanish and understand the cultural differences between the two countries. Additionally, working with experienced partners who understand cross-border brokerage and transportation was suggested, especially when getting started.

Hinojosa advised, “Find somebody who knows what they’re doing. Be a partner with someone who has been in the business for a while, doing cross-border, and little by little, learn the ins and outs, or create a position for that role.”

The panel agreed that developing a business strategy that includes a strong team, advisors and partnerships from the onset will be the best way to step in and eventually build a cross-border business hub or operation. Start small and build as you go. And look at other successful operations to learn from their experiences.

Visit the Trimble Insight 2024 event hub to read more. Or, contact our team to learn how Trimble can help your organization be as prepared as possible for any transportation industry challenges.