make frequent equipment repairs.
And that’s just one example. Companies can expect to
encounter a number of other obstacles as they start laying
the groundwork for operations in Mexico. That’s why
Monaghan and the other experts interviewed for this article
urge businesses to familiarize themselves with the potential
troublespots and think about how they’re going to address
them beforehand.
Overcoming hurdles
One of the biggest considerations for companies looking to
manufacture in Mexico is how they’ll transport the Mexico-made goods to U.S. markets. To someone unfamiliar with
doing business in Mexico, that might sound like a straightforward decision—either hire a Mexican trucker to deliver
the goods in the United States or send a U.S. carrier into
Mexico to pick them up. But it’s not that simple.
To begin with, using a Mexican trucker to make deliveries in the United States would be illegal. Although it agreed
to give Mexican truckers full and free access to U.S. highways as part of the North American Free Trade Agreement
(which took effect in 1994), the United States has yet to
deliver on that promise. At this writing, Mexican truckers
are banned from U.S. highways beyond a 50-mile border
zone. That means that once a Mexican trucker hauls a
cargo trailer to the border, he has to hand it off to a U.S.
carrier.
The second option—hiring a U.S. carrier to pick up
goods in Mexico—is perfectly legal, but few companies
actually go this route. For one thing, it’s difficult to find a
trucker that’s willing to do so—U.S. carriers have been hesitant to go into Mexico, partly out of safety concerns.
(García reports that for the past two years, Mexico has
been experiencing an unprecedented crime wave.) Rather
than send trucks into the country, most U.S. carriers
choose to interchange cargo at the border with a Mexican
counterpart.
That means that along with hiring a U.S. carrier, a company has to find a trustworthy Mexican trucking partner—
a process that’s complicated by a lack of big-name truckers
in that country. Although U.S. carriers have begun buying
ownership stakes in some Mexican transport providers,
most Mexican truckers are still “mom and pop” operations,
Monaghan says. He notes that shippers can learn a lot
about the rigor of a potential trucking partner’s security
practices by asking detailed questions about its hiring procedures. Quality carriers collect a lot of personal information on drivers and their background, including pictures of
the driver and the driver’s family, he says.
To further safeguard their shipments, Monaghan advises
shippers to put reinforced locks on their trailers. He also
suggests monitoring the carrier’s travel time to the border.
“If it takes too long to reach the destination, you have to
wonder if anything was compromised,” he says. It’s critical
for companies to keep tabs on carriers because the importer
who’s listed as the shipper of record bears the responsibility for any breach.
Where available, trains offer a somewhat safer alternative
to trucks, even though the transit times are longer, according to Monaghan. “There are [fewer] security issues with
rail because the train is always moving,” he explains.
Border lines
Another factor to take into account when planning a move
to Mexico is the potential for delays at the border. Due to
U.S. concerns over smuggling and illegal immigration, customs clearance can be time-consuming. David Morgan,
chief executive officer of third-party service provider D. W.
Morgan Co. Inc., reports that it has taken some of the firm’s
customers 16 to 20 hours to clear customs. “The main bottleneck for Mexico-U.S. shipping is the border,” he says.
