C.H. Robinson Introduces Cross-border Freight Consolidation Service
Saving shippers up to 40%, it's a new way to move freight from Mexico more efficiently and offset the impact of higher tariffs
C.H. Robinson, which manages 37 million shipments a year as the global leader in AI-driven supply chains, has introduced a new service that can save cross-border shippers up to 40% and gives them visibility to their freight up to 48 hours earlier. It uniquely combines freight consolidation in Mexico, cross-border transport, customs brokerage and bonded warehousing with the largest network of carriers and AI-optimized delivery across the United States and Canada.
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The new service was designed to overcome inherent inefficiencies in cross-border supply chains. Trucks crossing from Mexico into the United States are often under-utilized and sometimes carry just a single pallet. That's because Mexico law requires all freight on a truck to be cleared by the same customs broker – inhibiting consolidation of less-than-truckload (LTL) freight from different suppliers or manufacturers, even when it's headed to the same destination.
"Here's a scenario we see all the time," said Jay Cornmesser, VP for Mexico cross-border services. "Say you're a company that assembles vehicle seats in the United States, and you're importing foam, fabric, a wiring harness, a motor and switches from five different suppliers in Mexico. Those are coming to the border on five different trucks, five different transfer carriers are taking the loads across, and only then your freight might be consolidated for delivery to your warehouses or plants. You're unnecessarily paying for too many trucks and unnecessarily paying for unused space on each truck."
Now, LTL freight can be consolidated at a secure facility in Mexico and move cost-effectively on a single truck to the border and on a single truck across, seamlessly overseen by C.H. Robinson's customs team. Using artificial intelligence, C.H. Robinson's proprietary Optimizer technology then determines the best way to combine and route the freight to its final destinations. Key benefits of the streamlined service include:
- Earlier inbound visibility: "A company's freight from central Mexico's industrial hubs takes a day or two to get to the border and another eight to 24 hours to cross, due to long waiting lines and frequent disruptions. When their various suppliers ship to them using different carriers, customs brokers and tech, they rarely have upstream visibility," said Cornmesser. "Our new service brings freight to our new consolidation center in Mexico same day for same-day visibility. This helps ensure the smooth flow of materials to a just-in-time manufacturer and is especially beneficial when they need freight expedited. With up to 48 hours extra visibility, we can pull freight from different locations closer to the receiver, expedite freight that's further along in transit or at the very least obtain a more competitive rate for an expedite from our consolidation center."
- Significant cost savings: While the cost of getting freight to the border is reduced, cost savings with the new service also come beyond the border with optimized deconsolidation, consolidation and delivery. With continuous real-time data inputs, C.H. Robinson's Optimizer is able to dynamically choose the right mode, right route, right carrier and right day to move the freight. Trucks, travel time and miles are minimized. Trailer utilization is maximized.
- Tariff mitigation: "At a time when supply chains are strained by new and higher tariffs, our new cross-border consolidation service can provide some relief," said Ben Bidwell, senior director for customs. "We can move freight in bond, meaning it can enter the United States through a bonded warehouse to defer U.S. tariffs for better cash flow or even eliminate tariffs if the freight is passing through to Canada. Because auto parts and components are one of the top items flowing across the Mexico border, this is particularly attractive for automotive supply chains subject to the 50% tariffs on items containing aluminum or steel."
As heavy users of consolidation, retailers that import food and beverages from Mexico would also benefit from the new cross-border service, as would healthcare companies that rely on medical equipment made in Mexico or any industrial manufacturer that relies on parts, components or electronics made in Mexico.
"With so many industries under intense economic pressure right now, this is exactly the time to look at your supply chain holistically and get the benefits of these interconnected solutions," said Michael Castagnetto, president of North American Surface Transportation. "With C.H. Robinson's 35 years of experience in Mexico and the 1.5 million shipments we manage in this region a year, this new cross-border consolidation service is a natural extension of our expertise in LTL, our AI innovation and our constant quest to optimize our customers' supply chains."
ABOUT C.H. ROBINSON
C.H. Robinson delivers logistics like no one else™. Companies around the world look to us to reimagine supply chains, advance freight technology and solve logistics challenges—from the simple to the most complex. 83,000 customers and 450,000 contract carriers in our network trust us to manage 37 million shipments and $23 billion in freight annually. Through our unmatched expertise, unrivaled scale and tailored solutions, we ensure the seamless delivery of goods across industries and continents via truckload, less-than-truckload, ocean, air and beyond. As a responsible global citizen, we make supply chains more sustainable and proudly contribute millions to the causes that matter most to our employees. For more information, go to www.chrobinson.com. (NASDAQ:CHRW)
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Maria Lettman
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