Borderlands is a weekly overview of developments in the world of US-Mexico cross-border trucking and trade. This week: New customs requirements in Mexico complicate trade; US rail manufacturers accuse China and Mexico of unfair import prices; the Port of Corpus Christi partners with Mitsubishi for an ammonia plant; and FedEx offers preferential rates to shippers to Mexico.
New customs requirements in Mexico complicate trade
It’s been more than a year since Mexican authorities announced new customs requirements for domestic and cross-border shipments aimed at increasing tax collection and helping reduce cargo theft in the country.
Despite the lengthy transition period for the controversial customs regulation known as Complemento Carta Porte (CCP) — a digital tax document issued for supplies that aims to protect the transfer of legitimate goods throughout Mexico — confusion and frustration over the documents continues to baffle many shippers and carriers.
Josephine Blanco, Head of Legal and Compliance Nuvocargo, told FreightWaves that some of their Mexican carrier partners have struggled to issue CCPs in a timely and error-free manner. New York-based Nuvocargo is a digital logistics platform for cross-border trade between the US and Mexico.
“Most of our Mexican carrier partners would qualify as mid- to large-sized and generally willing to comply with the rules when they go into effect,” Blanco said. “However, even these carriers, which are generally better prepared for costs and administrative costs
burdens related to the issuance of CCPs – fought the issuance of CCPs in a consistent and timely manner.”
The Mexican Tax Authority (SAT) has announced a new CCP electronic waybill requirement in May 2021. The CCP is a set of over 120 data elements that includes everything from information on the consignor and consignee, the cargo and its value, the carrier equipment, driver information and routes in Mexico.
This year, SAT extended the deadlines for the implementation of the CCP three times. The new deadline is December 31, after which SAT can assess fines and penalties on any PDA issued in error.
“About 20% of our carriers have developed their own software to automate issuance
PDA,” Blanco said. “Others either rely on third-party software or use the SAT platform, neither of which are ideal at this stage. Carriers have told us that they avoid the SAT option because of the repetitive nature of the fields, among other issues.’
The CCP provision not only creates confusion among trade professionals, but also increases the cost of doing business, according to cross-border operators.
Refujio Muñoz, vice president of the National Chamber of Freight Transport of Mexico (Canacar), said that the CCP could raise administrative costs by 15% for carriers, transport companies and customs brokers.
Blanco said they are hearing similar concerns about price increases from Nuvocargo’s carrier partners.
“Increased operating costs are due to the need for additional (and specialized) staff, as well as costs associated with developing or acquiring third-party software required to issue CCPs on time and in compliance with regulations,” Blanco said.
American railroad manufacturers accuse China and Mexico of unfair import prices
The US Freight Car Coalition has petitioned the Commerce Department and International Trade Commission to investigate freight cars from China and Mexico.
The petitions allege that companies based in China and Mexico are dumping freight car couplings in the United States, distorting the U.S. market and causing significant U.S. job losses.
A coalition consisting of U.S. manufacturer McConway & Torley and unionized Amsted Rail Co. workers petitioned for anti-dumping and countervailing duties on Sept. 28.
The new petitions come just three months after the same petitioners lost their previous petition for anti-dumping and countervailing duties filed against China in September 2021. In June 2022, the ITC ruled that the domestic industry was not injured or threatened with injury by the imported from China freight rail couplings.
The new petitions add Mexico to the complaint. Freight rail coupling systems and components are metal structures used to connect freight cars.
In 2021, China and Mexico together accounted for 75% of US imports of freight rail couplings and components. According to the data, the value of goods imported in 2021 from China and Mexico amounted to 55.4 million dollars. data from the Akin Gump Law Firm.
The Port of Corpus Christi will partner with Mitsubishi Corp. for an ammonia plant
Mitsubishi Corp. recently announced that it has signed an agreement with the Port of Corpus Christi in South Texas to collaborate on a large-scale ammonia production facility, according to Reuters.
The proposed ammonia plant is part of Mitsubishi’s efforts to build an ammonia fuel supply chain to help Japan and other Asian countries fight climate change, the company’s senior vice president Hiroki Haba said on International Conference on Fuel Ammonia held in Tokyo on September 28.
Ammonia is seen as a possible source of clean energy in the future because it does not contain carbon. Ammonia produced at the Port of Corpus Christi will be shipped back to Japan, according to Haba.
Details of the partnership between Mitsubishi and the Port of Corpus Christi were not disclosed. Neither company responded to FreightWaves’ request for comment.
Tokyo-based Mitsubishi Corp. is one of Japan’s largest international conglomerates, operating in 10 business segments ranging from energy, mining and construction to automobiles. Port of Corpus Christi located on the shores of the Gulf of Mexico and is one of the largest export resources of the United States gateways.
FedEx offers discounted rates to shippers in Puebla, Mexico
FedEx Express Mexico announced it signed an agreement with the Mexican state of Puebla to provide preferential freight rates to small and medium-sized enterprises (SMEs) in the region.
The purpose of preferential rates — up to 40% discounts — is to improve and strengthen small and medium-sized businesses operating in the e-commerce market, officials said. The Mexican state of Puebla is about two hours south of Mexico City.
The agreement was signed by Olivia Salomon, Pueblo’s secretary of economy, and Jorge Torres Aguilar, vice president of operations for FedEx Express Mexico.
Salomon said the agreement will give SMEs in the state of Pueblo access to logistics infrastructure that can help them expand into new markets both in Mexico and around the world.
Torres Aguilar said there are currently about 9,000 small and medium-sized businesses in Mexico and that FedEx Mexico can handle up to 250,000 packages daily.
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