New UPS service focuses on improved U.S.-Mexico border trade

In an effort to augment challenges pertaining to over-the-road cross-border shipping, UPS said this week it has rolled out UPS Cross Border Connect, which it described as a ground freight service between the United States and Mexico focused on easing heavyweight freight supply chain challenges for companies investing in cross-border trade.

UPS officials said that this service is a contractual service that leverages the trucking network which supports the company’s North American air freight service. This network is connected with Mexican-based carriers at eight points—including Otay Mesa and Calexico, Calif.; Nogales, Ariz., and El Paso, Laredo, McAllen, Harlingen and Brownsville, Texas—along the U.S.-Mexico border. And it meshes UPS’s transportation and customs brokerage expertise north and south of the border to improve speed to market, drive cost efficiencies, and lessens supply chain risk, the company said.

“Many factors are driving the need for the UPS CrossBorder Connect service,” said Steve Flowers, UPS president, Global Freight Forwarding, in an interview. “Due to rising labor and fuel costs in China and elsewhere, many automotive, retail, high-tech and healthcare manufacturers are moving production closer to consumption points in North, Central and South America.”

Flowers said the impetus for this service originated a little more than a year ago, when
UPS interviewed 150 cross-border freight shippers to better understand their current shipping challenges and needs. Through these interviews, he said, the greatest pain points identified were the lack of choice regarding cost and transit times for freight shipments, the complex brokerage process and the number of parties touching a shipment during the shipping process. UPS CrossBorder Connect was then designed to address all of these needs by specifically helping companies to navigate the complexities of cross-border trade.

UPS has worked with customers for years to help them meet their needs related to cross-border shipping, and as the trend toward near-sourcing manufacturing continued to grow in recent years, Flowers said the company identified demand for a service specifically designed to meet the unique needs of shippers utilizing cross boarder transit in their operations. And he said it successfully piloted the service with customers over the previous few months, both northbound and southbound, through Monterrey, Guadalajara, and Mexico City.

“The service sews together elements necessary to a cross-border freight movement including line haul, brokerage and cross-docking,” said Flowers. “It also helps shippers to reduce customs delays associated with border regulations, inspections and lengthy paperwork.”

When asked to outline how UPS CrossBorder Connect works, Flowers provided this hypothetical example:
-on Tuesday, a shipment of finished auto parts is picked up in Monterrey;
-the parts travel north via a Mexican line-haul truck;
-the shipment clears Mexico customs and crosses the border at Laredo, or alternately clears Mexico customs at the Monterrey airport (similar to an air freight shipment), thereby expediting the border crossing process at Laredo;
-the shipment clears U.S. customs and moves onto a U.S. line-haul truck within UPS’s North American Air Freight line-haul network; and
-the auto parts are delivered to their final destination by Thursday or Friday that week.

“Additional advantages include the visibility and security UPS can offer with this service by including all components of cross-border trade—from U.S. transportation, U.S. cross dock, U.S. and Mexico customs clearance, drayage and Mexico transportation—all under one service to eliminate unnecessary shipment handoffs,” said Flowers.

This new service comes at a good time. Recent data from the Department of Transportation’s Bureau of Transportation Statistics stated that the number of commercial truck crossings into the United States from Canada and Mexico was 10.4 million in 2011, 1.7 percent more than in 2010 and follows a 9.4 percent rise in 2010 after two years of decline during the recession period of 2008 and 2009.