Mexico trucking capacity crunch

Mexico trucking capacity crunch

The USMCA replacement for NAFTA has not improved anything regarding trucking between the US and Mexico. COVID-19, movement of production from the Far East to Mexico, and no change in regulations, has put demands on trucking firms and on drivers that they cannot meet without large cost increases.

This is another fine example of the law of unintended consequences. A crisis is emerging, and it is borne on the backs of the truckers themselves. Equipment shortages, payment for deadhead runs, and a change to transloading at the border replaces the vision of through-traffic by Mexican or US trucking firms serving both countries in a seamless manner.

And it is a good example of how logistics is central to the value proposition of any product. The costs of logistics must be figured in, and accurately, and any system must be built to withstand severe shocks.

Scenario analysis may be the only way. The days of Just-In-Time are almost over.

By Ian Putzger, Americas correspondent 16/09/2020