top of page

The Cross-Border Revolution: US LTL Carriers Expand Their Reach into Mexico's Growing Market

Kelsea Ansfield


At Gain Consulting, we've observed a significant shift in logistics strategies as US Less-Than-Truckload (LTL) carriers are increasingly seeking to carve out a larger share of the Mexico cross-border trucking market. This trend reflects not only an adaptation to geopolitical shifts but also an innovative response to the burgeoning demands of nearshoring and regional integration. Let's delve into this transformation and explore what it means for your supply chain strategy.


The Drive Towards Mexico


The US LTL sector is undeterred by potential tariff threats and is instead motivated by the promising growth forecasts for Mexican manufacturing. This sector is actively expanding its footprint along the US-Mexico border, driven by the need to serve US importers who are now favoring more frequent, smaller shipments over bulk deliveries. This shift is challenging the traditional dominance of truckload carriers and intermodal rail in cross-border logistics.


The Numbers Speak


The statistics are compelling. In the first 11 months of 2024, the number of trucks moving north from Mexico increased by 3.6%, surpassing 7 million, as reported by the US Bureau of Transportation Statistics (BTS). This growth is underpinned by Mexico's manufacturing surge, fueled by substantial foreign direct investments, with $31 billion invested in the first half of 2024, a 7% increase from the previous year according to Mexico's Ministry of Economy.


Navigating Through Challenges


Despite these positive trends, there are headwinds to manage. The S&P Global Mexico Manufacturing PMI dipped slightly in December 2024, indicating a slowdown influenced by a weaker US manufacturing sector. Additionally, the physical infrastructure at the border remains a bottleneck, with only 21 truck crossings and about 88 truck lanes, which are insufficient for the current traffic volume.


This scenario necessitates a high degree of flexibility in logistics operations. The need for more efficient and agile transport solutions has led to strategic expansions by LTL carriers:


  • Pitt Ohio has introduced an express LTL lane from the Midwest directly to key border points.

  • XPO has expanded its service centers to seven from two, enhancing its network through partnerships with local Mexican providers.

  • Saia has capitalized on opportunities left by competitors, notably gaining from Yellow's bankruptcy, and has partnered with Fletes Mexico to extend its reach.

  • TFI International through its US LTL arm, TForce Freight, has strengthened its cross-border capabilities with the acquisition of Hercules Forwarding.


The LTL Advantage in Cross-Border Logistics


The strategy of consolidating multiple smaller shipments into full truckloads for cross-border transport, followed by deconsolidation in Mexico, showcases the innovative use of LTL by companies like Contract Freighters Inc. (CFI). This approach not only addresses the demand for smaller, more frequent shipments but also aids in managing the complex supply chains where components might cross the border multiple times before final assembly, particularly in the automotive industry where 40% of parts are sourced from Mexico.


Future Outlook and Infrastructure Needs


The increasing volume of cross-docking and warehousing activities in border cities like Laredo, combined with technological advancements in logistics visibility, points towards a future where cross-border logistics could become not only more complex but significantly more efficient. The Mexican government's recent push for regional integration with a $1.4 billion nearshoring incentive package underlines the strategic importance of this corridor.


Gain Consulting's Expertise


At Gain Consulting, we specialize in dissecting these complexities to provide you with strategies that leverage the new opportunities in cross-border logistics:


  • Customized Solutions: Tailoring your logistics operations to benefit from the LTL expansion into Mexico, reducing costs, and enhancing speed.

  • Infrastructure Adaptation: Advising on how to adapt to current infrastructure while planning for future expansions or alternatives.

  • Technology Integration: Utilizing the latest in logistics tech for better visibility and efficiency in cross-border operations.


The landscape of US-Mexico trade is evolving, with LTL carriers playing a pivotal role in this transformation. By aligning with this trend, businesses can not only secure more efficient supply chains but also position themselves advantageously in a market that is only expected to grow.


For a deeper discussion on how Gain Consulting can assist your business in navigating these changes, or for insights into the latest developments in cross-border logistics, we invite you to connect with us. Let's harness the potential of this cross-border revolution together.

5 views0 comments

Comments


bottom of page