Cross-border truck transits between Mexico and the United States have reached a historic high at a time when tariffs and trade policies are taking center stage in U.S. elections.
According to Motive’s latest data, cross-border trade between Mexico and the U.S. has increased by approximately 52% year-to-date through September. Cross-border truck visits in September alone surged 30% year-over-year, marking another historic high. In the Texas border town of Laredo, the number of truck crossings was the highest on record in August.
The head of strategic analytics for Motive, Hamish Woodrow, expects cross-border trade to continue growing, driven by nearshoring and increased trade at the Laredo border crossing. Big box chains like Home Depot and Lowe’s are stocking up on holiday decor, with Halloween preparations marking the first seasonal spike in restocking.
Retailers are moving away from the traditional just-in-time restocking model to prioritize supply chain stability over cost savings. Woodrow notes that retailers are willing to invest more to meet consumer demand and avoid stockouts. The shift is underscored by a 19.7% year-over-year increase in Chinese imports by mid-summer, according to Motive.
The rise in Chinese imports isn’t just about keeping up with demand – it’s a sign of a broader trend in supply chain management. Mexico’s proximity to the U.S. offers more than convenience – it enables faster response times and better adaptability to unexpected disruptions.
Strategically balancing imports from both China and Mexico can help retailers minimize risks while creating more resilient supply chains. Chinese imports help maintain inventory stability during high demand, while Mexican imports provide a quicker, more flexible option to avoid potential disruption.
In addition to manufacturing goods, food is a big commodity that is transported cross-border to the U.S. Mexico and Canada supply 42% of U.S. food imports, with beer and bread being their top exports. Other major food and beverage contributors include Italy (wine), Chile (salmon), and Brazil (coffee).
Former President Donald Trump has said he wants to renegotiate the USMCA deal he made in 2020. One key provision was a requirement for the countries to begin reviewing the trade deal after six years, a process that will begin in July 2026. Chinese manufacturing in Mexico will be a likely part of the trade renegotiation.
Logistics managers have told CNBC if Trump does win the election, they expect a rush of import orders ahead of his swearing-in to mitigate any additional tariffs. Woodrow said additional tariffs, changes in trade policies like the USMCA, and shortages of imported goods could drive up the cost of everyday necessities.
For now, companies are aggressively investing in the cross-border boom and seeing the benefits. Uber Freight announced it has achieved $750 million in freight under management to serve the increase in cross-border trucking demand between Mexico and the U.S. It recorded a 77% year-over-year increase in cross-border new business production from its shipper base, which is supported by a network of multi-mode approved carriers.
Despite the Mexico boom, the U.S. freight trucking industry has been mired in a multi-year recession. But over the summer signs began to emerge that the trucking industry was potentially turning a corner. JB Hunt Transport Services’ recent earnings reinforced this view.
“It has been a turbulent year, but we see 2024 is poised to end on a cautiously optimistic note,” Woodrow said. “While we expected to see growth in the trucking sector by November 2024, stagnant freight prices and carrier exits have slowed the rebound slightly.”
Woodrow expects moderate growth to return in the first quarter and a long-term growth rate of 5.7%, year-over-year, to be restored by the end of 2025, though he added there are many factors that could alter this forecast, from global macroeconomic weakness to interest rates and diesel prices.
Source: CNBC
