SPEAKER_00
0:37
One of the biggest changes is um the US has tried to move away from its reliance on foreign imports, you know, imports from Asia, imports from Europe. And so that has uh really strengthened the supply chain between, you know, the United States and Mexico, uh, and has really given Mexico an opportunity to really increase its uh exports to the United States.
SPEAKER_01
1:01
US Mexico trade keeps breaking records, but the operating picture is much messier than the top-line numbers. Policy reviews, driver enforcement, border infrastructure, security risk, and customs data are all moving all at the same time. As part of CargoRex's Mexico cross-border trade guide, I am joined by Noy Mahoney. He is a Texas-based Freightways cross-border logistics reporter with more than 20 years in journalism, who covers all of these things and is going to be able to give us the eagle-eye view of what's going on, what's changed, and what to expect. So, Noy, I've been looking forward to this conversation. Welcome in.
SPEAKER_00
1:40
Thank you for having me.
SPEAKER_01
1:42
Now, for folks who may be living under a rock and haven't really been paying attention to what's been going on, you know, we hear a lot of you know the trade numbers, especially with Mexico becoming, you know, the number one trading partner of the United States. I'm curious though, uh, compared to a year ago, what has changed within the US-Mexico relationship that has afforded us this number one trading relationship with each other?
SPEAKER_00
2:08
You know, I think one of the biggest changes is um the US has tried to move away from its reliance on foreign imports, you know, imports from Asia, imports from Europe. And so that has uh really strengthened the supply chain between you know the United States and Mexico, uh, and has really given Mexico an opportunity to really increase its uh exports to the United States. So that's one of the biggest changes. Uh, you know, the US government's uh push to move away from you know Asian imports, European imports.
SPEAKER_01
2:42
And so during the the the first Trump administration, you know, there was that first trade war that was established. And, you know, uh it was said that China kind of found a workaround to that by just shipping some of their goods over to Mexico and then they would be partially assembled and then shipped into the country. But this time around, they're trying to avoid, I guess, that, or the US government is trying to avoid that loophole. Have they successfully done that, or those loopholes still kind of exist, or is that just a loophole that's never going to be able to close?
SPEAKER_00
3:16
I think it's a little bit of both. I think the US government has done a pretty fair job of trying to close some of those loopholes, and China has responded by saying, well, instead of just shipping certain parts to Mexico and having them assembled in Mexico, we'll just put a factory in Mexico and build, you know, the entire uh product and then ship it across the border. So we see some of a little bit of both of that. And the US has tried to push the Mexican government to sort of be more strict about letting you know uh Asian companies or Chinese companies put uh all their factories, you know, in Mexico, but that's a that's sort of a gray area, you know, you can't really tell another government how to operate uh, you know, with foreign investments. So so it's a little bit of uh interesting thing to see how it's gonna move forward.
SPEAKER_01
4:06
And so as you're you're uh talking to companies and you're you're finding out where the I guess the the struggle points are, especially when it comes to to trade, is it a specific area of the of the country of the border that are facing more difficulties than others? Or are they all kind of all of these different, you know, sort of border towns, are they all facing similar issues with moving freight across the the border? And then what are those issues?
SPEAKER_00
4:33
Um well, one of the biggest changes in the past year in terms of you know cross-border freight, and I'm sure you've heard of this, is uh all of the enforcements around uh you know CDL B1 visa drivers. Uh the US has really tried to clamp down on, you know, uh foreign undocumented drivers, you know, being in the United States, cabotage laws. I'm I'm I'm sure you know what that is, where a driver from Mexico can deliver, pick up a load in Mexico and you know drive it into the United States, but he has to come back directly to Mexico. He can't, he's not allowed to really, you know, go point to point in the U.S. But of course that happens a lot. So the U.S. has been really clamping down on that. So one of the biggest changes and one of the struggles for you know cross-border freight is dealing with all these regulatory changes.
SPEAKER_01
5:25
And how are folks dealing with it all? Is I mean, obviously you're reporting, but is it are there tools and you know, maybe technology that that folks are utilizing to because they're probably trying to focus on their jobs and you know, moving freight, not maybe not necessarily what regulation has changed, or maybe you know, a new trade war that's you know uh surfaced or new tariffs. How are they navigating all of this complexity?
SPEAKER_00
5:50
People who have been involved in US-Mexico freight, they'll tell you that it's it's becoming more complicated, not less complicated. And so the way they deal with that, like you mentioned, is technology is having uh a sort of uh ecosystem around you know, moving those goods from Mexico to the US or vice versa. People that work in cross-border will tell you it's not just about finding the lowest rate, it's about making sure you know you have sort of a sort of a family of carriers, you know, on the US side, carriers in Mexico, brokers at the border, everybody that can has experience and can get that product across the border.
SPEAKER_01
6:32
So for a lot of uh it remains like a number the number one topic of cargo crime. And it's not just in the United States, but that's one of the, I guess, the perceptions that exist for moving freight in uh Mexico and then across the border is, you know, well, how do I make sure that my cargo is secured? Which you have the same questions in the United States as well and across the globe, but are there any fundamental differences in how the freight is moving in Mexico versus the United States? And maybe uh what are some additional or different precautions that companies are taking?
SPEAKER_00
7:06
The fundamental difference between you know cargo crime in the US is it's more uh fraud, you know, identity theft, spoofing. But in Mexico, it's more hijacking, uh, you know, physically stealing the goods from the trucks. And and sometimes it's even you know, drivers being injured, in some cases, even killed. So in Mexico, the threat of violence, cargo crime is very real. Um, and the way companies deal with that is often they, as you mentioned, technology, uh, they'll have kill switches for trucks to try to instill so you know, so the hijackers can't steal the truck. They'll have obviously tracking devices so they know exactly where it is. The goods are valuable enough, they'll even have uh escorts for that truck uh from you know, for certain lanes, especially those certain highways, uh certain lanes that they know are very uh dangerous, uh, that are often uh visited by hijackers. So they they try to use different routes uh often. So it's sort of those couple, those those kinds of things to uh throw off hijackers.
SPEAKER_01
8:13
It's interesting you mentioned that because I was at Logistics World earlier this year, and there were so on the trade show floor, there were so many of the cargo escort companies that they will they'll they showed imagery of the semi-truck, and then you know, there's different trucks in front and around and behind, and you know, security type looking forces that are are in those different vehicles to protect the freight. Uh are you are you seeing companies adopt that more, or is it only for, you know, maybe like super high value, maybe aerospace um, you know, parts or something like that? Where where are you seeing that I guess impact uh commodities the most?
SPEAKER_00
8:51
I think you know you definitely see it for high value freight. Um I know I should do mention also that the Mexican government has put more effort on the federal level and state level into policing highways, especially, you know, I think the the US government has pushed the Mexican government to say, hey, you know, cargo security is a major issue. If you want, you know, to continue to having this great trade agreement between you know the US and Mexico, you got to do more in your country to combat, you know, or to create more secure cargo movements. So the Mexican government has created these uh programs where uh the federal police policing the highways more. So that has helped. But to your question, yes, I am hearing about more escorts, uh, more trackers, more technology uh to try to you know get away from these hijackers.
SPEAKER_01
10:36
And you mentioned the uh the trade agreement because uh from what I understand NAFTA expired this year or it had the option to be extended, but that is currently at the time of recording this, or in you know, uh this is you know August 12th, 2026. Uh where do we stand as far as like NAFTA getting renegotiated? And there's also um the the the USMCA that that maybe it evolved into. Uh can you kind of give us a high level of what's going on from the policy perspective that's now trickling down into how companies are operating?
SPEAKER_00
11:10
Um well, as you mentioned, NAFTA sort of evolved into USMCA, and that's the trade agreement uh the US, Canada, and Mexico have had since uh 2020, USMCA. And uh just this past March, uh the US said we're not gonna immediately renew it. Uh it's it was coming up for renewal, I think it was July last month, but uh the US said uh we don't want to renew it immediately. So what that means is uh for the next few months uh at least, uh the US, Canada, and Mexico, especially the US and Mexico, are going to be renegotiating the agreements. And one of the things uh the US is pushing for, as I mentioned, is more cargo security in Mexico. Another thing the US is pushing for is uh rules of origin for certain parts and products, you know, and I think that's like I said, to get away from Asian imports. So I think eventually uh the US and Mexico, hopefully they'll come to an agreement because USMCA is very important. There's a lot of companies that really like that agreement and they depend on that agreement, you know, to keep their products moving for moving across the border.
SPEAKER_01
12:15
Yeah, I think uh with all of the the tariff news and trade wars and things like that, people are looking and businesses are looking for stability and predictability, and this is not been the the market for that.
SPEAKER_00
12:28
Yep, absolutely. Absolutely. The visibility, uh like I said, reliability uh are very important to companies and carriers.
SPEAKER_01
12:35
And so uh when when we're thinking about the the the cross-border trade with Mexico, you know, I I've heard, you know, the the is it the green corridor or the the new uh I guess sort of triangle that they're trying to build between or and I don't even know what they're trying to build. Is it you know just an infrastructure for uh you know, or better infrastructure and then better border crossing? What is what is uh I guess trying to be established with this uh is it Laredo and then Monterey and then another city? Can you kind of shed some light on that for for folks who are ignorant like me?
SPEAKER_00
13:10
I forgot the name of the company. So if the company is out there, forgive me for forgetting your name, but what you're referring to is this product, as you mentioned, called the Green Corridor or this project. And what it's supposed to be or what it uh hopes to be is this driverless uh sort of track uh with I believe uh autonomous trucks, I think going from Laredo across the border uh down into uh Monterey, which is about I think 160 miles south of Laredo. And then it'll pick up products you know into Monterey and bring them back across the border. As I mentioned, it's supposed to be driverless and it's supposed to be uh monitored, you know, 24-7 with security. So they're so they're proposing it as a sort of uh more secure uh way to move products uh back and forth between Laredo and uh Monterey.
SPEAKER_01
14:02
And so I I would imagine that you know some drivers feel some type of way about autonomous trucks, you know, taking over those routes, or is that a maybe an opportunity, I guess, for autonomous trucks to be able to have you know that sort of that dedicated route? And then the traditional truck drivers will fit fill in the gaps, you know, with uh different border towns or or different types of shipments. Is is that where you kind of see, you know, the this evolution of trade between Mexico and the United States going?
SPEAKER_00
14:32
I think, you know, uh with the Green Quarter project, I can't remember the specifics off the top of my head, but there is a limit to the number of trucks that can move back and forth within a like a 24-hour period. So I think that means there will always be a need for you know drivers, uh truck drivers, uh, you know, uh moving freight from uh, you know, Mexico, Monterey, Mexico to Laredo. Uh so I don't see it as taking a huge chunk at first, anyway, of regular freight, but maybe in the future it's possible. But from what I know, the project is still sort of in the planning stages. I don't I know I got a presidential permit. It is moving forward. So it'd be interesting to see what happens uh in the near future with that.
SPEAKER_01
15:14
What about from the the technology side of things? Are you, I mean, obviously security and you know, maybe tracking are are two of the bigger ones. Are are you seeing technology being adopted? Because that that was one of the bigger complaints that I heard, you know, and in just doing research for the series, is that it's taken uh Mexico a little bit longer to adopt some of these technologies that the US is, you know, obviously the US is a big like tech-focused country, but maybe some other countries haven't, you know, adopted it as quickly. I, you know, as a conversation with um Matt Silver from Cargado, where he was talking about, you know, that drivers were communicating on Nextel phones not too long ago, uh, but now it's you know it's evolved a little bit. Are you seeing that evolution of a technology adopting adoption happening in other areas outside of you know uh visibility and and cargo security?
SPEAKER_00
16:09
Uh I am. I think and I think the person you mentioned, Matt, you know, Matt Silver with Cargoto has has a lot to do with it. Uh he's he he's been working in that cross-border space now for, I don't know, 10, 15 years. And I do think more companies are adopting more digital technology, uh, like I said, tracking devices, visibility technology, kill switches, you know, for security on their trucks. So I think uh, you know, I I was at a conference a few months ago uh and I listened to the director of supply chain for Grupo Bimbo. I don't know if you know this. There's a huge bakery, uh one of the biggest bakeries in the world, and they're based in Mexico, but they have clients in the US and Canada, and they were, I was really impressed with how sophisticated their operation is. And, you know, they they know where every truck is, they know what every pallet is uh on that truck. So I think you're gonna see more and more of that companies that in Mexico that adopt technology to make sure you know the loads are secure.
SPEAKER_01
17:08
It feels like maybe adopting that technology would allow you the ability to take on more freight and to move your freight faster. I I would imagine.
SPEAKER_00
17:16
I I believe so, yes. I know one of the interesting things that the Grupo Bimbo person talked about was when the tariffs hit, they could tell which cities were buying less of their you know breads or treats uh just because of you know uh how how well they have visibility into their products moving. And I thought that was really impressive. You know, Cleveland didn't like this, or Ohio, you know, or you know, New York City didn't like this. So we we need to mix up our products uh moving across the border.
SPEAKER_01
17:45
Oh, that's interesting. So they're incorporating like consumer data as well in into the I guess the the future freight flows or future freight movements that that they would be in deploying.
SPEAKER_00
17:57
Yes, absolutely.
SPEAKER_01
17:58
So uh uh from from your lens, you have the opportunity to talk to so many different people and so many different and hear about so many different solutions. I'm curious as to what isn't getting the attention today that it should be getting, and it will probably get more attention in the future.
SPEAKER_00
18:15
You know, I I think what gets lost uh in the headlines a lot is um how mature the US Mexico uh you know logistics supply chain is. Um, you know, we we talk about tariffs and uh politics and immigration issues, but for decades now, there's thousands of companies that have built up this incredible cross-border supply chain between Mexico and the US. So I think that that's something that gets lost a lot.
SPEAKER_01
18:46
Yeah, how far things are are have come versus, you know, I guess maybe the the news of the day.
SPEAKER_00
18:52
Yes, absolutely.
SPEAKER_01
18:54
So where do you see what what what projects are being invested in now outside of maybe the the green corridor? Uh what projects are being invested in now? I've I've heard of, you know, even uh a CTPAT uh certification where it allows you, it's almost like a you know TSA pre-check, but for semi-trucks. Um are there any other initiatives that you're seeing that maybe, you know, for folks who are looking to start shipping, you know, cross-border or or maybe to open up a cross-border division, uh, where are the opportunities now where you're seeing?
SPEAKER_00
19:25
Well, there's so many opportunities. I think one of the ways to get started is to work with people who know uh cross-border freight. As I mentioned earlier, it's very complex. You know, you you have so many people touching that freight as it crosses, you know, the border between the US and Mexico. So if you're getting started in uh US-Mexico freight, work with people who know that that environment.
SPEAKER_01
19:49
What are some of the investments that that are being made or to help facilitate more cross-border trade that for companies who have thought about it, you know, maybe they they've moved some trucks here and there across the border, uh, but they want to focus more on it because of this growth of the manufacturing and really near shoring and friendshoring, I think it's another phrase that I heard it uh reference to. But what should maybe shippers or uh you know logistics companies be paying attention to as far as new opportunities that that are popping up that that may not have existed prior?
SPEAKER_00
20:23
Some of the interesting things I'm seeing uh investments in cross-border. And this this isn't usually sexy, but Laredo, a lot of the border cities, uh Laredo, uh they're expanding their bridges. And if anybody knows anything, that's actually a big concern for the future of cross-border freight, the infrastructure, because we're seeing more and more trucks, uh, we're seeing uh more and more goods, and often we're seeing more and more bottlenecks at the border. Uh so just having the physical infrastructure ready for all of this freight moving between the Mexican and the US is going to be a big deal.
SPEAKER_01
20:59
Are they deploying resources to address that? Or is it just something that maybe like in my local city, they they talk about it, but they don't do anything about it. But it sounds like maybe they're actually doing something about it when it comes to uh cross-border trade.
SPEAKER_00
21:14
Yeah, uh City of Laredo, uh City of Nueva Laredo, which is right across the border, uh, they're both expanding uh the bridge, the bridges between their two cities to allow more trucks. Uh as I mentioned, uh the city of FAR, which is another border border city, they've they're they've expanded their bridge, Ote Mesa, Ote Mesa border crossing, which is the the which is which connects San Diego to Tijuana. They've they're also expanding their trucking lanes to to uh allow more trucks to go back and forth. So we are seeing a lot of the the border ports of entry uh move forward with projects to help uh uh truck get back and forth.
SPEAKER_01
21:55
And it's I know we've been talking a lot about you know, sort of um importing goods in from Mexico, but then there's also a lot of opportunity from what I understand for you know US companies to export some of their commodities into to Mexico as well. Uh are there any commodities in particular that are seeing more of a focus in in that regard for US-based companies looking to export?
SPEAKER_00
22:18
Yeah, I know that has actually been one of the pushes to from US companies to try to get more products into Mexico uh so they don't have that sort of imbalance between uh trucks moving, you know, going north and not enough trucks going south. That's always been an issue for cross-border trade. So I know uh um US companies have been pushing for more sort of uh consumer products, even that they can ship to Mexico so they have that truck down there and ready to bring trucks, uh, you know, Mexican exports back to the US. So that has been a big push.
SPEAKER_01
22:54
Yeah, to avoid those deadhead miles. I I would imagine that that's just such a a massive increase on the cost of goods when a truck can only you know go one way and not pick anything up and bring it back. So maybe that's something that you know will be addressed in in the new trade negotiations with um with the what is it, USMCA, not NAFTA anymore. Are they retiring NAFTA as as a phrase or is it uh are we all in on USMCA now?
SPEAKER_00
23:20
I think it's okay to use both. I still know a lot of people. It's basically NAFTA 2.0. So I think uh NAFTA, USMCA is it's it's all good.
SPEAKER_01
23:30
So what what about from, you know, uh maybe LSPs, logistic service providers, or or even shippers, what should they be paying attention to when it comes to uh Mexico cross-border trade over maybe the next year?
SPEAKER_00
23:43
Some of the big things are, you know, um the regulatory changes, uh, especially what happens with the USMCA. You know, like I mentioned earlier, the rules of origin laws, that's something that the US is pushing for, security, cargo security measures. Uh, so it'd be interesting to see what stays in the agreement, and that could have an effect on you know how companies uh operate, you know, moving uh freight back and forth. So USMCA change USMCA or NAFTA changes, and also as we mentioned earlier, all the trucking enforcement, you know, driver enforcement changes, because that has an effect on you know available drivers, uh capacity truck capacity. It'll be interesting to see how the driver pool along the border is affected. Uh, because you know, there's some cases now where dri drivers in Mexico they don't even want to you know come across the border, they just don't want to risk it. Even if they're following all the rules and just doing regular cabotage, you know, uh it it they they'd say it's just better we'll just stay here in Mexico, being a truck driver in Mexico. So that will affect capacity. Uh, I think eventually truck you know, carriers will be okay uh as long as there's not too many changes too quickly. You know, trucking companies, you know, those carriers, they can deal with change, uh, but when there's too many changes too quickly, that that affects operations.
SPEAKER_01
25:07
With all of these changes going on, any advice to the folks who want to pay attention to what's going on? I mean, obviously follow your work over at Freightways, but is there are there any resources that they should be kind of tapped into for the time being to kind of figure out what happens with the USMCA?
SPEAKER_00
25:23
The US trade representative, uh, they're the people that put out information about USMCA and they do a pretty good job of putting out press releases. The FMCA, FMCSA, you know, they put out uh all of the new changes or regulations around drivers. So those are the sort of resources I use to keep track of what's going on. Also, the Department of Transportation, you know, that's another big one. Um, but you know, there's so many changes happening so quickly. It can be difficult to follow everything, but uh that that's part of the challenge, uh, you know, operating a business and being a reporter as well.
SPEAKER_01
25:59
Yeah, 100%. Well, they could always follow your work because I think you are one of maybe the top voice as far as you know, cross-border trade with with Mexico. And so it was a no-brainer to to have you on for this series. And um uh for last couple uh questions here, is there anything important to mention uh that we haven't already talked about?
SPEAKER_00
26:20
You know, I think what I hear from carriers a lot is uh, you know, uncertainty around regulations and uh they just want uh certainty that makes their their jobs going forward easier. So they just want certainty around you know what what drivers can you know are eligible to drive for a company. Uh they want certainty around, you know, cabotage rules. Uh so I think I think you know carriers uh just just want certainty.
SPEAKER_01
26:48
Yeah, and it's it's one of those, I think, time periods of that we're just gonna have to maybe wait a little bit longer for that certainty to to kind of come to the come come to the top and come to fruition so then businesses can plan better on on just exactly what's going on. And I think unfortunately it's just gonna be a little bit of a waiting period and you just gotta pay attention to the news.
SPEAKER_00
27:10
Yes, yes.
SPEAKER_01
27:12
All right. Uh Noy, uh, where can I send folks? Where can they uh connect with you and and and follow your work and and stay up to date on all of this evolution?
SPEAKER_00
27:22
Uh well they can find me on you know freightwaves.com, or if they want to reach me directly, uh they can uh email me. My email is nmahoney at freightwaves.com. I'm always looking for news or you know uh just reaching out to people so that uh so so they can uh get to me those those two ways.
SPEAKER_01
27:43
Perfect. Well, well, thank you so much for sharing your insight and and helping us kind of uh clear clear the mud away from these waters so that we can uh maybe maybe get a little bit more certainty in this chaos. So I appreciate your time and and your insight.
SPEAKER_00
27:56
Thank you for having me again.
SPEAKER_01
27:58
Absolutely. Thank you so much for tuning in to this special edition from Cargo Rex. This is one of many series that we have planned. So if you have a chance to check out more of our content, please do hit the subscribe button. It helps a lot with growing the channel. And then also if you want to support more content like this, head on over to cargorex.io and consider becoming a premium or plus member. It offers a lot of benefits, all listed over on the website. Just hit the pricing tab over on the website and you can get signed up and even possibly be featured in one of these interviews just like this. Thank you so much.
