nearshoring-and-liabilityNearshoring has been the buzzword among U.S. manufacturers who once looked overseas for cheap labor and now look south of the border.

Who’s liable if your freight is damaged or lost when shipping to and from Mexico?  Clear communication and understanding the details matter greatly, especially when it comes to logistics and nearshoring.

Let’s look at Carrier liability. According Logistics Lawyers Group, a carrier that tries to limit its liability for shipments in Mexico to zero will fail, and liability will rest fully with the carrier. Read Cargo Liability in Mexico.

However, our experience is that carriers limit liability regularly, especially in LTL and air freight circles. It’s a belief others support. As long as details of liability are in the tariff and contract that everyone agrees to, you are going to be hard pressed to find a judge who will make them pay for any loss you may sustain when shipping to and from Mexico. In short, liability in Mexico will not rest with the carrier.

Conversely, it’s going to be difficult for you to get sufficient coverage for damage or loss. Typically, you cannot buy insurance for freight either to or from Mexico. Usually, your customs broker will sell it to you.

So while the lower production costs and supply chain efficiencies offered in Mexico look attractive, it’s important to understand real costs involved.

The best thing you can do is partner with people you trust (and are willing to work with you if there is a claim) and who have a proven track record for a low claims ratio in Mexico. Even spending a little more on freight might be worth it to preserve the integrity of your freight.

Are you shipping in and out of Mexico, or planning to do so? Here are 3 questions to ask your 3PL about nearshoring:

  1. Do the carriers you use to Mexico have staff, trucks, and a proven infrastructure in Mexico, or are they using partners, alliances, or agents? (You’re in better hands with an established company that knows how to manage cultural and workforce differences.)
  2. How many years have you and your carriers been working with shipments to Mexico? (Experience can matter greatly.)
  3. When shipments arrive in Laredo, who handles the cross-border from the customs broker to Mexico? (Laredo’s process is different. Your 3PL will have no control over the freight as it crosses the border, making it imperative that your 3PL have rock-solid relationships there.)