UPS expands shipping, broker services in U.S.-Mexico cross-border trades
Company broadens truckload offerings, guarantees LTL, TL services if it acts as broker; consolidates power-of-attorney into one document for all Mexican entry points.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
UPS Inc. said today it has expanded its transportation and customs brokerage services in the U.S.-Mexican trade, steps that include guaranteeing deliveries of truckload and less-than-truckload (LTL) shipments when the company is the importer of record, and broadening its truckload offerings in the cross-border market.
Atlanta-based UPS will also consolidate its power-of-attorney (POA) functions in Mexico, creating one document to cover transactions at all its 27 border entry points. Peggy Gardner, a UPS spokeswoman, said the move would make life easier for customers that ship to multiple locations within Mexico, because in the past they would be required to file a separate document for each delivery point—a time-consuming process.
UPS, which began service to and from Mexico in 1989 with small-package service, has typically acted as the importer of record for those transactions, according to Gardner. In addition, it has always guaranteed small-package deliveries. However, it has generally not held itself out as the importer of record for LTL and truckload transactions. Nor has it guaranteed its nonparcel deliveries, which make up a small part of its transborder shipment mix. UPS added LTL services in the U.S.-Mexico market when it acquired LTL carrier Overnite Transportation Co. for $1.2 billion in 2005. Overnite was offering cross-border services prior to the acquisition.
UPS said it is the only carrier in the market that offers delivery guarantees for LTL and small-package shipments when it also functions as the customs broker.
The expanded truckload offering announced today is partly a result of UPS' $1.8 billion acquisition last year of Chicago-based broker Coyote Logistics LLC, which primarily handles truckload transactions. Previously, UPS offered cross-border truckload services on a customer-specific basis, according to Gardner. UPS now plans to broaden its truckload capabilities, even offering services on a "spot," or noncontract, basis, Gardner said. UPS said in a statement today that customer requests for U.S.-Mexico shipping services have increased 20 percent year-on-year, a span that includes a six-month period prior to the Coyote purchase.
Troy Ryley, managing director, Mexico for Transplace, a large Dallas-based third-party logistics (3PL) provider with extensive Mexican operations, said the key component in the UPS enhancements could be the increased role of Coyote. "Coyote is not yet a big player in Mexico," said Ryley, "UPS gives them a platform to grow off of as they will have access to a larger client base."
Ryley added in an e-mail that UPS has historically struggled at providing transborder non-parcel services because it has "not nailed the integration of customs, distribution, and cross-border synergies."
Miguel Gomez Tapia, an Austin, Texas-based vice president of Mexican LTL carrier Fletes México Carga Express, said UPS is introducing little that the broader market doesn't already have. Instead, today's announcement represents a more intense attempt by UPS to promote its myriad solutions and services, Tapia said. That effort that could generate significant revenue for UPS in what has become a vibrant but persistently challenging market, he said.
The U.S. is Mexico's largest trading partner, while Mexico is the United States' second-largest export market, behind Canada, and its third-largest trading partner. It is estimated that $1.4 billion is exchanged in commercial trade between the U.S. and Mexico each day. As the global economy has struggled, the U.S.-Mexican market has remained strong, stimulated by the frequency of near-shoring by U.S. manufacturers to closer-in end markets, and the potential for growth within Mexico. However, cross-border trade remains complex and cumbersome, though there are efforts by both sides to streamline the process.
In addition, arguably the main cross-border port of entry, Laredo, Texas, is already at 95- to 98-percent capacity, and the available facilities there are not suitable for cross-docking operations, according to Tapia. Capacity constraints in Mexico are becoming a problem, and in a mirror image of what is transpiring in the U.S., bigger companies are struggling to find qualified drivers there, he added.
UPS did some cross-border rebranding as part of its program. UPS Freight LTL was renamed "UPS Standard LTL." UPS Air Freight Consolidated and UPS CrossBorder Connect LTL shipping services were renamed "UPS Worldwide Expedited Ground Freight." UPS Air Freight Direct was renamed "UPS Worldwide Expedited Air Freight" and is a general service offering a delivery guarantee when UPS is the customs broker. And UPS CrossBorder Connect truckload FTL (full truckload) was renamed "UPS Worldwide Expedited Truckload."
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.