Above: Raw metal is brought to the U.S., processed and formed into complex auto parts that are shipped back to Mexico for assembly. The final vehicle is then shipped to a U.S. dealership.

Freight handler expands zone of influence with border logistics facilities north and south

April 2018 -  Ryder System Inc., which offers commercial fleet management, dedicated transportation and supply chain solutions, expanded its North American capabilities in 2018 with the opening of new or expanded logistics operating centers in London, Ontario, and Laredo, Texas.

Long known for managing dedicated fleets for metals distributors, among numerous other sectors, Ryder saw the necessity of putting greater capacity at the borders.

In 2017, U.S. imports of Canadian products fell just short of $300 billion while exports totaled $282 billion. U.S imports of Mexican goods totaled $314 billion and exports approached $243 billion last year, according to the U.S. Bureau of Economic Analysis.

The Logistics Operating Center in London, Ontario, opened in January, primarily serving Eastern Canada. The center includes a 30,000-square-foot building with office and cross-docking space, parking spaces for 286 trailers and 162 tractors. A total of 210 drivers are domiciled out of the facility, along with 55 Ryder employees. Cross docking enables goods to be distributed using little or no storage time. Truckloads are received, unloaded, sorted and redeployed outbound in 24 hours or less. This helps customers to lower both freight and inventory costs.

2017 U.S. imports of Canadian products were $300 billion; ex-ports reached $282 billion. U.S imports of Mexican goods totaled $314 billion; exports, $243 billion.

Ryder’s Ontario facility will handle more than 3,000 cross-border freight movements a month between the U.S., Canada and Mexico.    

Similarly, Ryder opened a new logistics facility in Laredo, Texas, in February to support cross-border shipments between the U.S. and Mexico. With this new center and company facilities in other border crossing cities, Ryder will manage more than 11,250 cross-border freight movements each month between the U.S. and Mexico, accessing multiple crossing points.

Located less than 5 miles from the World Trade Bridge, the 109,000-square-foot facility includes offices, 51 dock doors, two ramps, and 114 trailer spaces. The Laredo site is focused on the shipments of  customers within the automotive, industrial, retail and high-tech industries but is built for expanded business opportunities with future North American customers.

The new facility also complements Ryder’s newly renovated yard in Nuevo Laredo, Mexico, which has capacity for up to 400 trailers.

Endurance

Gene Sevilla, vice president of International Supply Chain Solutions, says Miami-based Ryder has been working in Canada for 50 years. “The market has been fairly well integrated for the longest time,” he says.

In contrast, “Ryder was not in Mexico up until NAFTA, because the rules prevalent at the time did not allow for companies to invest and lease  transportation equipment to customers. NAFTA opened the door to full-service lease of transportation equipment and we opened there in 1994.”

A great volume of products manufactured in Mexico moves into the United States, says Sevilla. Then, food crops and raw materials made in the U.S. are exported to Mexico. “The vast majority of the traffic we handle is manufactured goods in both directions. Generally, these customers are in the automotive industry, climate control companies, toy manufacturers, white goods, packaged food, high-technology and consumer products, retailers, etc.”

For example. “In the auto industry, raw metal is brought to the U.S., complex parts are made in the U.S. and shipped back to Mexico to be assembled in a car.” The final vehicle ends up in a U.S. dealership.

“We have a customer in Mexico that makes panels that are exported to vehicle assembly plants in the U.S. We see a lot of the traffic just in automotive,” Sevilla says.

With cross docking, truckloads are received, unloaded, sorted and redeployed outbound in 24 hours or less.

Papers in order

One of the chief reasons pushing Ryder to expand on the border with Mexico is to be able to help customers facilitate the process and documentation needed to ship in a way that meets security and other agencies’ requirements.

“Suppose you export tomatoes. The food has to meet FDA standards if sold in the U.S. The FDA is right there at the border. Let’s say you go from central Mexico and sell in San Antonio. A Mexican truck with trailer gets through the Mexican side of the border. The trailer must then be disengaged and hooked up to a cross-border tractor to go from one side of the border to the other,” Sevilla says.

Carriers with special plates operate in a border zone that stretches 16 miles inland to Mexico and 16 miles inland to the United States. The truck and cargo are inspected. “All kinds of documentation, loading manifest, weight, etc., are required. Then, U.S. Customs may conduct a random check or determine everything has to be inspected,” he explains.

“There is a huge emphasis on having the right documents for export, and the documents must match exactly what’s in the truck. If you have 167 rather than 165 boxes of chocolates, it’s a problem. If you go through and are flagged at random, there will be a detailed check of documents and everything has to be in order.”

If everything goes well, says Sevilla, the border truck drives to the yard of a U.S. carrier, which probably owns the trailer. The trailer is picked up and goes to its American destination.

“As you come south, the process is the same. An American carrier may bring processed copper to the border for an air conditioner manufacturer in Mexico. It may be tubing on a flatbed that arrives in Laredo. There is clearing of Mexican customs,” says Sevilla. Once cleared, the border carrier enters Mexico, transfers the trailer to a Mexican carrier, which delivers the truckload  to its final destination.

Cars and Canada

Ryder’s London logistics center is only two hours north of Detroit. “We work with car manufacturing plants in Canada, where a lot of parts come from the U.S.” There is a lot to the logistics portion of the service, says Sevilla.

Ccross-border trade between the U.S. and Canada is easier for carriers than the Mexico-U.S. trade. “A Canadian truck registered in Quebec City may go to San Francisco without using border trucks. A California truck may end up in Whistler, British Columbia.”

Overall,  says Sevilla, cross-border trade represents a good business for Ryder. “We have a good capability in that area, and we are one of the largest providers. To move cargo from deep in Mexico to deep in the U.S. and vice versa, consistently, with reliability and control requires above standard capabilities. Ryder’s advantage is its capability, being able to go the distance and reach the last mile.” MM