Although trade with Mexico has grown and more U.S. shippers have become familiar with border-crossing procedures, they still seem to be concerned about what happens at the border. The following brief look at the steps involved in crossing from the United States into Mexico may clear up some questions.

First, the U.S. seller and Mexican buyer must agree on the terms of sale, which set forth each party's responsibilities. For instance, if the applicable term is DAF (Delivered at Frontier), the seller pays for carriage to the border, where the goods are officially "delivered" to the buyer. Proof of delivery consists of the delivery receipt given by the U.S. freight forwarder to the shipper's motor carrier.

Next, the U.S. shipper sends all essential documents to the U.S. freight forwarder (which actually works for the Mexican customs broker). Those documents may include a commercial invoice, a certificate of origin, a certificate of free sale, and any other documents the buyer requires for entry. Although it is the buyer's obligation to tell the seller which documents will be required, the seller should be aware that failure to provide those documents will delay the border crossing.

Third, the exporter clears the outbound shipment. Ordinarily, this is accomplished by submitting the Shippers Export Declaration (SED) to U.S. Customs. However, under the DAF term—where delivery to the buyer has already been accomplished in the United States—the buyer's forwarding agent will act as the exporter. In any event, as of April 1, 2001, the SED must be submitted either on the new Customs Form 7525-V or via an AES (Automated Export System) transmission.

Next, the Mexican customs broker executes aPedimento de Importacion(import entry), which includes the harmonized tariff classification, shipment details, IVA (a value-added tax), and his commission. Once the Pedimento has been executed, a drayage carrier picks up the goods at the freight forwarder's premises for transfer into Mexico.

After leaving U.S. customs, the goods enter Mexican customs, where the Pedimento is checked to ensure that all duties have been paid. When the driver submits the Pedimento, he will get either a red light (meaning an inspection is required) or a green light (meaning no inspection is required). Keep in mind that a Mexican broker who has a history of difficulties with Mexican customs authorities will get red lights more often than will a broker who has had no such problems. The cargo then passes through another random light system, where the shipment may be subjected to inspection by non-customs personnel for audit purposes.

After the cargo has cleared Mexican customs, the drayage carrier crosses into Mexico and drops the load. A Mexican longhauler picks up the cargo for final delivery. At the 26-kilometer mark, which defines the limits of Mexico's frontier zone, the carrier must show the proper paperwork for entry into Mexico.

How much does all of this cost? That depends on the amount of work the freight forwarder must do. The more items there are in a shipment, the costlier it will be. That's because, under current Mexican law, the Mexican broker or the freight forwarder must verify that each one is eligible for entry. It also depends on the cost of drayage. If you make one shipment a month, it can cost between $350 and $600 per trailer. If you export one per day, it should cost no more than $275 per crossing. If you export 10 per day, they should cost about $200 each. To get the best prices, be sure to get quotations from several Mexican customs brokers or U.S. freight forwarders, and compare costs at different ports of entry.