The fourth quarter of 2020 was very busy for cross-border operations. Laredo, Texas, was one of the hottest markets in the entire US toward the end of the year, and Load To Truck Ratio (LTT) spiked to more than 20–1. Market conditions remained extremely challenging as we closed out the year, and they are anticipated to remain the same through much of 2021.
While the increase in southbound volumes, driven by a strong retail quarter, has provided additional US equipment in Mexico, the imbalance between northbound and southbound volumes remains a big concern. Capacity out of Mexico and the border is very tight; that, coupled with border crossing delays and a shortage in linehaul drivers, resulted in premium shipping costs and longer transit time for cross-border shipments.
Border crossing times at the World Trade Bridge @ Laredo, TX have considerably increased creating a bottle neck at the border and causing delayed deliveries. There is no indication that border crossing times will improve going into Q121.
In the last two weeks of December, we did a lot of advance planning. These are some of the variables we took into account, all of which remain on the table in 2021:
- Repositioning fees remain in place for deadheading empty equipment from the border or other regions in Mexico in order to secure equipment, and they need to be reconsidered.
- Plan for a potential increase of three to four days over your normal cross-border, door-to-door transit time.
- Provide service providers with advance load-planning notice and request equipment as far in advance as possible in order to secure equipment needed.
- If the nature of product allows, consider transloading at the border to allow connection with a wider carrier network in the US side. Direct US equipment for cross-border operations, on both directions, will come at a high premium with low equipment availability.
Outlook for 2021 is that market conditions will remain challenging, with the prevalent cross-border disruptions in 2021 having bled into this year. Freight volumes will rise as shippers are expected to bring production levels back to 100 percent, driving an increase in transportation rates.