Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Trade experts take stock on USMCA’s first anniversary; more factories and jobs for Mexico; Quiet 3PF opens distribution center in Dallas; and border officials see uptick in migrants hiding in trains.

Trade experts take stock on USMCA’s first anniversary

July 1 will mark the first anniversary of the United States-Mexico-Canada Agreement (USMCA).

The trade pact was championed by then-President Donald Trump, who touted it as a landmark deal that would help ensure America stayed on top of the global economy.

The goals of the USMCA included bringing more manufacturing and jobs back to the U.S. and North America, as well as creating more trade opportunities among the three countries.

Matt Silver, CEO of Forager, said it’s too soon to tell if the USMCA has boosted cross-border trade, because manufacturers and companies usually plan on product launches or factory investments at least two to three years out.

“I think any impact we’ve seen this year for any cross-border volume increase is more related to trade with China, and the challenges that came from the pandemic and shipping overseas,” Silver said.

Forager is a Chicago-based cross-border logistics technology platform founded in 2018. Forager operates a load board for carriers to book loads between the U.S., Mexico and Canada.

“I don’t know that we would see something so quickly from USMCA, because a lot of it is to incentivize people to start doing something somewhere [in North America],” Silver said. “When I think about how we price stuff for some automotive customers — I used to work with suppliers for OEMs [original equipment manufacturers] like GM, Ford, Nissan and Volkswagen — last year we were pricing stuff for out to 2023.”

Silver said suppliers and OEMs have to plan a few years in advance for a new product line, or a new version of a car, or just increased production.

“Same goes for a new plant that a company may want to build in Mexico and not overseas,” Silver said. “That to me is the biggest thing that we’re going to see maybe a couple years down the road.”

When the USMCA went into effect in July 2020, it replaced the 26-year-old North American Free Trade Agreement (NAFTA).

USMCA included tighter North American content rules for cars and auto parts, new protections for intellectual property, prohibitions against currency manipulation and new rules on digital commerce that did not exist when NAFTA launched in 1994.

Trump proposed the USMCA in 2018, but it took two years to get through Congress.

Sergio Contreras, president and CEO of the Rio Grande Valley Partnership, said USMCA has already had a positive impact on investment and trade in Texas’ Rio Grande Valley.

The Rio Grande Valley Partnership is a nonprofit organization that encourages collaboration between counties of the Rio Grande Valley and advocates for business in the region.

Contreras said many banks and investment companies hesitated on projects while the USMCA awaited congressional approval.

“During the time that it was in limbo, projects were stalled,” Contreras said.

Located at the southernmost tip of Texas on the Mexican border, the Rio Grande Valley has more than 1 million residents and includes the cities of McAllen, Pharr and Brownsville. 

Major trade facilities like the Port of Brownsville and the Pharr-Reynosa International Bridge are in the Rio Grande Valley.

“The type of projects we need in the valley — warehousing space, cold storage space — they were on hold. I got this direct from bankers who were saying, ‘Hey, I have two or three projects on hold, each worth either $5 million or $10 million, until USMCA gets signed,’” Contreras said. “Once USMCA was signed, they were able to take off.”

One of USMCA’s provisions was also to improve cross-border customs processing by digitizing it. Silver said improving cross-border trade through digitization and technology will be good for Forager, as well as for the entire trade community.

“One of the things we want to unlock long term is the data that goes back and forth with customs brokers, and the carriers and transfer companies and the transit facilities and everything else at the border, because that’s so challenging,” Silver said.

“So the USMCA helps push that in the right direction, ultimately, with the customs data digitization process. We haven’t seen it yet, but it’s something that we want to tackle because we know that’s a big part of the reason why everybody feels like cross-border is a black hole. We’ll be able to benefit in the long term, but we haven’t tackled it yet,” Silver said.

New auto parts factories announced for Mexico

Two companies recently announced new plants in Mexico that will generate millions in foreign direct investment and create 1,200 jobs.

German auto parts supplier ZF Group announced plans to build a manufacturing plant near Monterrey, Mexico. The facility will also include a research and development center for autonomous driving technology, as well as an office hub for the company’s North American operations.

Officials at Friedrichshafen, Germany-based ZF Group did not disclose the amount they will invest in the facility. The factory, which will create 800 jobs, will manufacture cameras used in vehicles, as well chassis electronic components. It is scheduled to open in 2023.

France-based automotive supplier Le Bélier also recently broke ground on a $68 million factory in San Miguel de Allende, Mexico. The plant will produce turbo compressors, master cylinders, brackets, engine mounts, braking systems and chassis components.  

Le Bélier’s factory, which will create 400 jobs, is scheduled to open by the end of 2022.

Quiet 3PF opens distribution center in Dallas

Third-party fulfillment provider Quiet 3PF recently opened its first fulfillment center in Texas.

The facility, located in north Dallas, has more than 550,000 square feet of capacity and employs 400 people. Using multichannel inventory storage, autonomous mobile robots and active order picking, the fulfillment hub is expected to process over 22 million orders annually.

“By positioning our fulfillment centers in high-density population centers, we offer our brand partners all of the benefits of storefront fulfillment without the associated rent, labor and other fixed costs,” Gene Gorab, executive chairman of Quiet 3PF, said in a statement.

Quiet 3PF is based in Devens, Massachusetts. The company specializes in providing order fulfillment and returns management services to e-commerce retailers.

Border officials see uptick in migrants hiding in trains

U.S. Customs and Border Protection (CBP) officials are seeing a spike in people hiding on freight trains in an effort to sneak into the U.S.

CBP said people are hiding on almost every train they inspect that arrives from Mexico in El Paso, Texas.

Since the beginning of the current fiscal year, CBP officers working in El Paso’s two downtown rail crossings have removed 292 undocumented migrants from trains, up 60% compared to the same time frame a year ago.

Over the past two weeks, border officials in Laredo, Texas, have found more than 40 people hiding in rail cars to sneak into the U.S. on trains arriving from Mexico.

“People are climbing on rail cars and hiding in places not designed to accommodate human beings,” Hector Mancha, El Paso CBP field director, said in a statement. “Fortunately we have yet to encounter anyone who has been maimed while attempting this, but I am afraid that at some point we will.”

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