Cross-border shipping entails a slew of risks, many of which are concealed. Many American shoppers, for example, are astonished to hear that they are liable for cargo losses that occur far too regularly south of the border.
Mark Vickers, executive vice president of international logistics for Reliance Partners, spoke with Jose Minarro, managing director of Sunset Transportation, about the ever-present risks of cross-border shipping, the importance of carrier vetting, and why Mexican cargo insurance is a must-have in today’s world.
Vickers points out that Mexican shipping is unfair in that carriers have liability insurance for their trucks but not for their cargo, which is your stuff.
In prior FreightWaves pieces, he went to great length about the differences in freight practices between the US and Mexico. One is that carrier liability is almost non-existent in Mexico, as carriers are not obligated to provide coverage for shipments, leaving shippers responsible for damages. Motor carriers based in the United States can be held accountable for up to $1 million in cargo loss, but carriers operating in Canada can only be held liable for $2 per pound of freight. Mexico, on the other hand, only holds carriers accountable for 2.5 cents each pound moved.
It’s odd that cargo insurance is hard to come by in such a wild west atmosphere for trucking — especially because crime rates south of the border haven’t improved: During the first half of 2021, more than 5,000 cargo thefts were reported in Mexico alone.
Sunset uses tracking technology throughout the whole shipment process, from a place of origin to final destination, because Minarro understands how important visibility is while operating in Mexico. Sunset’s well-established tracking staff is credited with keeping track of fleet movements on its TMS platform, including transit and dwell times.
If a truck deviates from the planned path or takes an unannounced diversion, Minarro said the driver will be notified right away. “We take steps to provide [customers] visibility, but it’s far more critical to demonstrate to them how you’ll respond if something goes wrong,” says the company.
According to Minarro, criminals place a high value on the truck and trailer themselves, particularly newer ones. This was demonstrated earlier this year when cargo from South Carolina for one of his shipper clients was hijacked in Mexico. The burglars weren’t after the cargo, but rather the trailer. Minarro tells this scenario during every sales call, emphasizing the several reasons why a truck could be targeted in Mexico.
“We tell [our clients] the tale of the small shipper because I think it’s a lot simpler to appreciate the reality of the risk involved when you flip a coin to see if things will go smoothly or not,” Minarro explained. “It’s not a matter of determining if your cargo is appealing or not, or whether it will be stolen – it can happen for a variety of reasons, which is why it’s far better to be safe than sorry.”
Many shippers, he discovers, are just uninformed of the gravity of the situation and go south of the border, oblivious to the dangers.
However, before a single cargo crosses the border, Minarro and his Sunset Transportation team make sure their shipper clients are completely informed of the hazards connected with cross-border freight and are properly protected against its liabilities.
“When we talk about the worth of their goods, that’s when a light bulb goes off; we ask if there’s any cargo they’re willing to lose for no money back,” Minarro explained, adding that the typical response is that all shipments are valuable and frequently irreplaceable. “We have the dialogue and bring it to a point where they can make an informed decision about whether or not to purchase insurance.”
