Land trade with the US: fertile ground to optimize logistics processes

Hugo Álvarez - CFO & Co-founder
August 24, 2021

Land trade with the US: fertile ground to optimize logistics processes


The United States is by far Mexico's main trading partner.

It is estimated that the total trade between the two countries amounts to 500 billion dollars (million dollars), which is equivalent to about 50 million dollars per hour, and more than one billion a day.

The strong ties between Mexico and the United States arise from economic aspects, but also from the extensive border they share, with the strong cultural and demographic ties that this entails.

The border between the two countries has an extension of 3,141 thousand kilometers and is the most dynamic in the world in terms of trade and people flows.

In this sense, motor transport moves 56% of goods by road in Mexico and contributes 3.4% of the National GDP.

According to estimates by the Ministry of Foreign Relations (SRE), more than 300 thousand legal vehicles are crossings every day, of which  70 thousand are cargo trucks, where almost 72% travel loaded and the remaining 28% circulating empty.

It should be noted that, for the United States, the movement of trucks on the border with Mexico represents 72.5% of all commercial value in the area.

Land trade between Mexico and the US, at the forefront


From March to July 2020 (period in which the pandemic was accentuated), the number of crossings on the northern border was 2,996,227, that is, 640,768 less than in the same period of 2019, refer to figures from the Tax Administration Service ( SAT).

However, Mexican trucks that cross in the commercial zone of the neighboring country to the north, registered an increase of 2.2% year-on-year in 2019 (27,803 units), according to data from the United States Department of Transportation.

86% of trade between Mexico, the United States, and Canada is carried out by land transport, and 65% in cargo trucks.

The main products moving between these three countries are computers and parts, electrical machinery, and vehicles and spare parts.

But not only that. Countries like the US have organizations like FMCSA, which collects and maintains up-to-date safety data from carriers

to make them accessible to the public.
However, interpreting this data is complicated and risky. Also, there is no way to know the actual performance of the carrier and the individual driver unless they have a prior relationship.

For this reason, each of the actors that participate in the supply chain will require an advanced system that allows them to optimize in the best way all their logistics operations.

TrackChain is an intuitive, fully integrated, and easy-to-use digital freight platform for freight quote, booking, dispatch, capacity management, load matching, asset tracking, and instant payment settlement in one place.

It is the bridge to the new smart logistics, in which you can manage your shipments and payments in one place.

Among the competitive advantages of implementing TrackChain are:


Digitized transactions.

Using Smart Contracts for Immutable Rate Negotiations and Workflow Tracking


Immutable reputation

Shippers and carriers use a reputation system based on objective data (time of collection, delivery and loading, punctuality, payments, among others).


Peer to peer

Direct collaboration between all actors in the supply chain and the reduction of excessive dependence on intermediaries.


Faster payment settlement

In one click and without commissions. Regarding the senders, they can pay the carriers instantly through the smart contract trust.

In this way, platform users can purchase third-party value-added services, eliminating the cost of bank-to-bank transfer and credit card fees.


TrackChain in numbers


Quotes can take between 6 and 8 hours. By automating the process, TrackChain speeds it up to less than 10 minutes.

In addition, it offers:

90%

Reduction in billing times

15%

Reduction in corrective maintenance

30%

Reduction in administrative work

What are you waiting to join? Be part of the digital transformation. Request your demo today and manage your shipments and payments, all in one place.

Are you a shipper? Click here

Are you a carrier? Click here