By Patty Hinojosa, Director of Logistics at Conexus
Crack open a newspaper, hop on the Internet or turn on the news and you will be bombarded with information about the ongoing shift in manufacturing. Many American companies, previously outsourcing their operations to overseas locations, are now opting to move their plants closer to home and are setting up operations in Mexico, increasing the amount of shipments traveling across the border. This shipping of goods and materials North and South across the border of Mexico can be a complicated, expensive and frightening process – if you don’t know what you’re doing. But armed with the following guidelines you will be able to conduct your transportation needs across our southern border with ease. Below is part I of II Top Ten Border Crossing Pitfalls to Avoid when attempting to transport goods across the U.S./Mexico border and how to avoid them.
- Neglecting to have the correct paperwork. Far too often, shippers will neglect to give their South bound carriers the proper documentation necessary for a smooth transition across the border. Every Mexico-bound shipment must include the following items: commercial invoice, certificate of origin and a bill of lading. A shipment arriving without even one of these pieces will be detained at the border by the customs broker and will not be allowed to cross until the appropriate documentation has been presented. This could cause delays resulting in detention charges by the carrier, which begin to accrue after three days and typically range around $300 per day.
- Choosing the wrong customs broker. The key here is to be picky. Customs brokers, like all businesses, range from excellent to good to bad to terrible. Finding the right one can alleviate any number of headaches while the wrong one could cause unending stress, delays in your shipments and potentially cost you your job. Just as you would before entering into a business transaction of any significance, do your homework. Ask for references, a work history and do a little research on the reputation of the customs broker in question before conducting business with them. A little preparation at the beginning will make a world of difference in your end result.
For help finding a reputable customs broker, industry associations are a good place to start. The National Customs Brokers & Forwarders Association of America (NCBFAA) has a membership directory search tool that can be used to look up customs brokers by name, city and state. There are also a number of local organizations such as the Laredo Licensed U.S. Customs Brokers Association, Inc. (LLUSCBA) that can assist in finding a customs broker at a particular point of entry.
- Not having enough funds available to pay duties. This is a very common mistake that even the most frequent shippers can fall into. Let’s face it, duties can be expensive, and if you don’t have enough funds available for wire transfer once the shipment arrives at the border, you could be looking at delays that can potentially rack up additional charges in detention while you wait to get the proper funds in order. Best advice, don’t send a shipment to the border unless you know you have the funds immediately available to get it safely across. Give yourself a significant amount of padding in your account as well. While your customs broker can give you an estimate as to the amount you will pay in duties, you will not know the final cost until the customs broker has had an opportunity to view the load. The customs broker has to verify the country of origin, among other things. If your load originally sourced from a country outside NAFTA borders your duties will be significantly higher.
- Having more than one responsible party handling the load. Potentially, a shipper could end up dealing with three or more different companies and multiple contacts at those companies in order to move a load across the border. The first contact in the process is the U.S. carrier tasked with moving the load from the destination to the customs broker at the border. The second party is the customs broker and the third party is the Mexican carrier that will take the load to its final destination. The trouble with this approach is the loss of visibility the shipper will have with the load. When more than one party is responsible for the load a shipper could be bounced around for hours between multiple parties while trying to track down the load. This is an easy problem to avoid however.
When searching for a transportation provider to move your load across the border, look for a company that offers door-to-door service. This service is available when a transportation provider takes responsibility for the load throughout the entire process and coordinates with all parties on the shippers behalf. This approach allows a shipper to have one contact to call when checking the status of, or making changes to a load. In the majority of cases, the shipper won’t need to call at all and will be provided with updates throughout the process, giving the shipper peace of mind and complete visibility.
- Not notifying your customs broker in advance. This is another common pitfall shippers can fall into. Often a shipper will neglect to tell their customs broker in advance that a load is coming. This lack of information can result in delays at the border resulting in late deliveries and detention charges from the carrier. When notified in advance, a good customs broker will typically have the majority of the paperwork completed before a shipment ever arrives, leaving the customs broker little else to do than view the load, check the origin and send the shipment through. Advance notice also allows the customs broker to fit the shipment into an already hectic schedule. A load arriving without advance notice means it will be at the mercy of the custom broker’s schedule and will likely be placed at the back of the line.
To continue reading Part II of the Top Ten Border Crossing Pitfalls to Avoid click here .
Patty Hinojosa is the Director of Logistics of Conexus in Laredo, Texas.