This is a last entry about Mexico’s situation related to the Transportation Services. Read here the first part
Carrier insurance coverage is not built into transportation rates in Mexico. Mexican law makes the carrier liable for 15 times the Mexican minimum wage per ton, or a fraction thereof, which indubitably will leave you and your client under covered. Use of your global policy to leverage the coverage you need in Mexico is always the cheapest option. If you are entering into an interchange agreement with a Mexican transportation company it is important that the terms of coverage for both the freight and your assets are explicit in the agreement.
As important as any of the other measures already identified, is maintaining close partnerships with Mexican carriers and/or transportation companies.
Evaluating each carrier prior to entering a business relationship seems like common sense, yet the extent and depth of the evaluation required is usually undermined in exchange for a quick response or a cheap rate. While cost will always play a part, you should rate your partners for their in-route tracking ability, communications technologies, theft prevention and emergency response preparedness and security solutions that rely on IT applications rather than manual labor. Another aspect that is often overlooked is the physical inspection of the facilities where the shipments will stay overnight or will await Customs clearance. Many carriers will hold meetings at their headquarters, impressing partners with the infrastructure in place, while the reality is that the freight will never touch those facilities. While visiting the carrier’s yard at the border you want to confirm they have processes in place for seal verifications; security guards in place to make sure containers are not removed or altered by external parties; and area lighting is adequate to ensure the effectiveness of CCTV recordings at night and to deter criminal behavior.
Making certain that the shipper and consignee share your commitment to maintaining a safe and secure supply chain is also essential.
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The most successful relationships are those where the Client and the Carrier are true partners and their business and security objectives are aligned. Shippers should develop security measures to include employee awareness practices, risk assessment plans, crisis management/business continuity plans, and improved security screening in the hiring process. Access controls, personnel training and CCTV are all measures that can help prevent an event or in the worst case, assist the authorities during an investigation.
There are many practical reasons for shipping cargo through Mexico. The country’s macroeconomics are in good shape and there are time and cost advantages to the use of Mexican ports. Companies that address external threats by adopting internal security measures, can turn them into opportunities to grow their market share. Making informed decisions and developing a solid entry strategy will increase your success rate as much as selecting the right partners.
The ILS Company has been shipping internationally for 17 years. The ILS Company’s mission is to contribute to the competitive advantage of our Customers by providing reliable, timely and integrated logistics services, information, and customized solutions in transportation, distribution, storage, and customs; always maintaining the integrity of goods and consistently delivering excellent Customer service. The author can be reached at [email protected]
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Sources
https://atradius.ca/reports/country-report-nafta-mexico-2018.html
Written by: Roxana Osuna