Cross Border Challenges Importing from Mexico to … Border Challenges Importing from Mexico to the...
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Cross Border Challenges Importing from Mexico to the US Neil Lenok Managing Director American River Group
Transcript of Cross Border Challenges Importing from Mexico to … Border Challenges Importing from Mexico to the...
Cross Border Challenges Importing from Mexico to the US
Neil Lenok
Managing Director
American River Group
Challenges
• NAFTA management
• HTSUS classification controls and verification
• Valuation management
• Supply Chain Security controls (C-TPAT)
• Documentation management
NAFTA Management
• Who is preparing NAFTA certificates
• Knowledge of pertinent facts
• Origin determination criteria
• Tariff Shift rules qualification
• Regional Value qualification
• Does the US broker have the NAFTA certificate at the time of entry processing?
HTSUS Classification
• Who is classifying products?
• What expertise is present in US determination criteria?
• How often are the classifications reviewed?
• What influence does Mexican supplier have on the classification determination vs the Mexican broker for export?
Valuation Management
• How is the proper value being determined on goods exported from Mexico?
• Does the value represent all cost or only Mexican added values?
• How are repair and return shipments valued?
• How are sample shipments valued?
• Are assists, commissions and royalties being included in the valuation criteria?
Supply Chain Security Controls
• Does the transportation carrier participate in FAST program?
• Does the Mexican supplier belong to the NEEC program or C-TPAT program?
• Are high security seals used during the full transport process?
• Are the goods destined for a cross border warehouse location or interior US destination?
• Are security procedures consistent with inter change agreement carriers?
Documentation Management
• Who is confirming proper invoice content?
• Who is preparing manifest?
• Does the packing list represent full manifest quantity consistent with contract of carriage documents?
• Who is retaining records and documentation to meet applicable retention regulations?
• Are documents presented to importer in advance of arrival to the border?
CESARNAVARRODIRECTOR OF BUSINESS DEVELOPMENT
April. 2016
CELADON OVERVIEWCeladon provides long-haul, regional, local, dedicated, intermodal, temperature controlled, flatbed and expedited freight service across the United States, Canada and Mexico. The company also owns Celadon Logistics Services, which provides freight brokerage services, LTL consolidation, freight management, as well as supply chain management solutions, including warehousing and distribution.
EQUIPMENTTotal Tractors – 5,350
• Average Age – 2.1 years
Total Dry Van Trailers – 12,250
• Average Age – 4.9 years
• 53’ Air Ride, TOFC-equipped
ADDITIONAL INVESTMENTS
• Aero packages on all units
• GPS tracking on all units
• Battery-powered APUs in all tractors
• EOBRs installed on all trucks
• Fuel-efficient tires
Revenue Breakdown
CELADON LOCATIONS
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SECURITY IN MEXICO
TRUCK SECURITY
• Satellite tracking (truck and trailer)
• Panic button
• “Shield” device (separate cellulardevice)
• Geo-fencing and system routing withalerts
• Monitor unauthorized stops and routedeviation
• Separate high risk/cargo monitoringgroup
PROCESS AND PROCEDURES
• C-TPAT procedures at all facilities
• Separate perimeter fencing
• Separate process for visitors and vendors at our facilities
• ID cards for employees
HOW WE OPERATE IN AND OUT OFMEXICO
• Understand what a customer’s needs are in Mexico.
• Work with customer to help understand the border and how to transport in and out Mexico.
• Help educate our customers on CTPAT regulations and how it can improve the overall flow of material.
• Educate customers on border delays.
• Identify pain points with our customers.
• Take customers on border tours to understand the process.
TOP 3 TRADING PARTNERS OF THEU.S.(BILLIONS OF 2009 U.S.DOLLARS)
Partner 2014 rank 2000 2010 2013 2014
Canada 1 $495 $520 $594 $608
China 2 $142 $451 $527 $545
Mexico 3 $302 $389 $475 $494
Source: U.S. Dept. of Commerce
In the last 15 years, Mexico has gone from the #2 U.S. tradingpartner to the #3 due to the rapid growth of China’s economy.
VALUE OF EXPORTS TO MEXICO(MILLIONS OF 2009 U.S.DOLLARS)
2000 2010 2013 2014
Exports to Mexico, total $118,649 $137,562 $179,175 $188,905
Truck $100,613 $109,992 $140,892 $148,721
Rail $12,817 $19,423 $26,026 $27,314
Pipeline $389 $2,074 $3,469 $4,415
Other $4,851 $6,072 $8,788 $8,454
Mail $<1 $1 $<1 $<1
Source: U.S. Dept. of Commerce & U.S. Dept. of Transportation
Trucks transport the largest share of total trade value with Mexico, followed by rail as the second largest mover.
VALUE OF IMPORTS FROM MEXICO(MILLIONS OF 2009 U.S.DOLLARS)
2000 2010 2013 2014
Exports to Mexico, total $138,527 $179,214 $218,308 $230,005
Truck $108,281 $147,196 $173,303 $184,340
Rail $25,714 $28,141 $39,419 $40,735
Pipeline $14 $179 $227 $190
Other $11,688 $7,183 $7,773 $9,298
Mail $5 $<1 $<1 $<1
Foreign Trade Zone (FTZ) $77 $1,153 $5,297 $5,932
Source: U.S. Dept. of Commerce & U.S. Dept. of Transportation
Trucks transport the largest share of total trade value withMexico, followed by rail as the
second largestmover.
CROSSING THE U.S.-MEXICO BORDER BY THE NUMBERS(in thousands)
Mexican Border 2000 2005 2010 2011 2012 2013 2014
Trucks 4,526 4,676 4,743 4,868 5,104 5,195 5,415
Loaded Containers 2,350 3,031 3,174 3,277 3,460 3,499 3,779
Trains 7 9 8 8 9 9 10
Loaded Containers 266 336 318 359 400 442 474
Source: U.S. Dept. of Transportation
In 2014, 5.4 million trucks hauled nearly 3.8 million loaded containers into the U.S. from Mexico, an increase
of 19.6 and 60.8, respectively over 2000 levels.
SOUTH OF THE BORDERWhat to know when moving freight in
and out of Mexico
Carlos M. Sesma Jr.Partner
AVOIDING THE SANDWICH EFFECT…
CARRIER (PROVIDER)
SHIPPER (CLIENT)
YOU (INTERMEDIARY)
SO WHO ARE YOU?
• Intermediaries add value to the transportation service• Integration• Sophistication• Technology• Know How• Price management (volume)• Risk mitigation
• State clearly who you are and what you do
• Not a regulated activity in Mexico
• No authority required
FREEDOM OF CONTRACT
• Transportation is a commercial activity
• Transportation is among private entities
• Transportation is not a “public interest” matter
• Therefore, statutory provisions can be contractually waived
• When they exist, contractual provisions rule the relationship between the parties
FIRST LAYER… CARRIER
• Carrier selection process• Corporate documents• Authority• Certificates of Insurance• Financial Statements• Certificate of Good Standing before tax authorities• CTPAT - NEEC (compliance – tax, customs, security)• Website - Reputation
• Agreement• Statutory Limit of Liability (USD$60 per ton)• Claims process (waive law – 24 hr.)• Carrier Lien
• TAX - VAT
LAST LAYER (BUT NOT LEAST) … YOUR CLIENT
• Manage expectations
• Agreement• Services described clearly• Liability terms (100% if not contractually limited)• No contract – no service• Clear ”force majeure” provisions
• In Mexico it is customary that “Shipper Insures”
• Agreement form• Acknowledgement or agreement is needed• Contract - preferable• Bill of Lading/Service Order• Terms and Conditions (not by reference)• Even e-mails and quotes
AVOID THIS…
100% LIABILITY TOWARD CLIENT
YOU
USD$60 PER TON FROM CARRIER
THE DRESSINGS… OTHER CONSIDERATIONS
• Bill of Lading• Local BOL only can be issued by registered carriers
• Through bill of lading (establish clear point of destination)
• Establish Hierarchy
• Spanish preferred
• Jurisdiction in Mexico for Carriers• Location of assets
• Speed to resolution
• Cost
• Witness and evidence location
• Manage internal communications!
CARLOS M. SESMA JR.
Sesma, Sesma & McNeese, S. C.(+5255 3095 3077)
THANK YOU!
