Border Politics Disrupt Mexico-U.S. Supply Chain Movements

April 20, 2019
Border Politics Disrupt Mexico-U.S. Supply Chain Movements

President Trump’s threat to close the Southern border has disrupted supply chains as delays are building for commercial vehicles crossing the border, especially northbound.

Delays of ten hours above normal are reported, and the threat of a total closure is accelerating efforts by shippers in Mexico to get goods loaded and moving.  This, in turn, accelerates the congestion at the border, made yet worse by the reassignment of 750 Customs and Border Protection Agents.

The threat of a border closure- despite assurances it is not imminent- is intended to pressure Mexico to do more to constrain the flow of refugees to the border.  At the same time, the re-negotiated NAFTA deal is pending a House vote, adding further to uncertainty.

Video Spotlight: Ripple effects of a potential Mexico border shutdown

This post is based on the Industry Week article, Mexico Border Wait Times Spike, by Michael Hirtzer and Thomas Black, April 8, 2019, and the YouTube video, Ripple effects of a potential Mexico border shutdown, by USA Today, April 3, 2019. Image source: Rouzes/Getty Images

Discussion Questions:

1. What uncertainties are shippers facing on cross border movements between the U.S. and Mexico?

Guidance: The re-assignment of 750 Customs and Border Protection agents from commercial crossings has delayed traffic across the border, especially Northbound. Separately, the re-negotiated NAFTA treaty has not been moved to a vote in Congress, adding to uncertainty. Looming over this is President Trump’s threat of a total border shutdown if Mexico does not take action to stem the tide of refugees trying to cross into the U.S.

2. How are Mexican shippers responding?

Guidance: The slowdown is outside the control of all shippers that are most affected by this action.  Mexican manufacturers are trying to move more goods, more quickly, due to the threat of a total border shutdown.  This is pushing up the price for trailers and further adding to congestion at the border.

3. Who is at fault for the delays?

Guidance: President Trump’s attempt to force Mexico to be more proactive with controlling refugees has created this unintended, but recognized disruption. By increasing the frequency and quantity of shipments, shippers in Mexico are worsening the delays, but this is in direct response to fears of a total shutdown at the border that has also been threatened.


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