US Less-than-Truckload (LTL) carriers are increasingly focusing on the US-Mexico border to capture a larger share of the growing cross-border trade market. Despite challenges such as tariff uncertainties, the continued growth of manufacturing in Mexico and rising demand for smaller, more frequent shipments are driving this strategic expansion.
Historically dominated by truckload carriers and intermodal rail providers, cross-border logistics is now seeing a stronger presence of LTL carriers. This shift responds to the evolving needs of US importers, who increasingly favor smaller, just-in-time deliveries. Moreover, the heightened involvement of LTL providers helps address the persistent imbalance in truck capacity at the border, which has historically driven up costs.
Truck-based trade between the US and Mexico continues to rise. In the first 11 months of 2024, the number of northbound trucks crossing the border increased by 3.6% year-over-year, surpassing 7 million trucks, according to the US Bureau of Transportation Statistics. Compared to 2019, cross-border truck volume has grown by 14.2%, and since 2014, it has surged by 35.9%.
This growth stems largely from the expansion of Mexican manufacturing operations linked to US markets and significant foreign investment. In the first half of 2024 alone, $31 billion in foreign investment flowed into Mexico’s manufacturing sector, marking a 7% increase over the previous year. However, infrastructure challenges persist, with only 21 US-Mexico truck border crossings and limited truck lanes available, creating a bottleneck for rising trade volumes.
LTL Providers Expand Cross-Border Services
A number of LTL carriers are establishing or enhancing cross-border services to meet this growing demand. Recent developments include:
- The launch of express LTL lanes connecting the Midwest to key US-Mexico border crossings.
- Expansion of cross-border service centers by prominent carriers, enabling improved shipment flows.
- Strategic partnerships between US and Mexican LTL providers, ensuring seamless operations across borders.
- Acquisitions of cross-border LTL specialists by major carriers, further strengthening their market presence.
These initiatives follow shifts in the market, such as the exit of a major LTL provider in 2023, which opened opportunities for other carriers to capture market share. The focus is not only on northbound freight but also on consolidating and shipping raw materials southbound to support Mexican manufacturing plants.
Innovative Strategies to Meet Market Demands
Many carriers are implementing innovative logistics strategies to optimize cross-border operations. For instance, some providers consolidate LTL shipments in the US, transport them in full truckloads to Mexico, and then deconsolidate them for distribution using Mexican LTL networks. This approach improves efficiency and addresses the demand for faster replenishment cycles.
The growth of Mexican manufacturing is driving demand for components that move back and forth across the border, particularly in industries like automotive manufacturing, where about 40% of US-made vehicle components are sourced from Mexico. These trends are fueling the development of cross-docking and warehousing facilities at major crossing points such as Laredo, Texas.
Improved technology, particularly in shipment visibility and tracking, is also enabling LTL providers to offer more flexible and efficient services. This increased visibility allows shippers to make better decisions about mode selection and delivery timelines, facilitating the use of LTL and partial truckload options.
A Promising Outlook for Cross-Border LTL
As cross-border trade continues to grow, LTL carriers are optimistic about their role in this expanding market. The strategic push toward cross-border logistics represents a significant opportunity for these carriers to diversify and strengthen their operations while addressing the increasing complexities of supply chain demands.
By participating in the growth of US-Mexico trade, LTL providers are positioning themselves as essential players in the evolving logistics landscape. Their ability to adapt and innovate will not only drive efficiency but also ensure they remain competitive in this high-potential market.
