Capacity, policy, and demand reshape cross-border trade

Top three factors defining U.S.–Mexico cross-border shipping

First, growth in freight demand continues to shift away from automotive and toward electronics, computer equipment, and advanced manufacturing. Automotive remains a major source of cross-border volume, but the sector is going through a transition.

Negotiations over the U.S.-Mexico-Canada Agreement (USMCA) remain a key swing factor for future automotive investment, manufacturing expansion, and broader capital deployment. A fourth round of talks is set for early September in Washington. The U.S. administration has been pushing for vehicles to contain 50% U.S. content, while Mexico continues pushing for relief from the 25% auto and 50% steel and aluminum tariffs.

Second, record trade volumes appear to be supported more by existing manufacturing capacity and prior investment than by new capital deployment. Mexican imports and exports continue to grow, but the share of foreign direct investment coming from new sources has fallen to its lowest level in years, suggesting current freight volumes stem from investments made in previous cycles.

Third, driver availability remains an impediment on both sides of the border, compounded by English-language proficiency enforcement and cancellations of the B-1 visas that Mexican drivers rely on to enter the United States.

What this means for cross-border shipping now

The result is a market where rates are stabilizing at a higher base, even without broad demand acceleration. Capacity remains tight where driver supply is scarcest, especially in Laredo, Texas, where load-to-truck ratios remain elevated. El Paso has eased as seasonal produce shipping has declined, but steady computer equipment flows continue to influence rates through that crossing.

Carriers are likely to keep favoring dedicated freight and longer-term commitments. Shippers that support carrier planning, round-trip efficiency, and forecasting will be better positioned to secure capacity. Looking ahead, electronics and advanced manufacturing remain the clearest freight growth stories, while automotive lanes require closer, lane-by-lane monitoring until there is more clarity on the USMCA.

Driver supply remains the market's core constraint

While tractors and trailers may be available, the smaller pool of qualified drivers able to support cross-border operations limits usable capacity and can affect service reliability. Beyond attrition from drivers losing their B-1 visas, carriers continue to report a smaller pool of qualified applicants and higher costs for recruiting and retention. Mexico trucking associations estimate a nationwide shortage of more than 90,000 drivers, driven in part by limited incentives to remain in the profession.

Border processes can further reduce usable capacity. Carta Porte document requirements, inconsistent customs brokerage, inspections, and missed appointments can extend cycle times and reduce the number of turns a carrier can complete. Even when equipment is technically available, dwell time and delays can limit its use.

These conditions are reinforcing tighter capacity and firmer rates. Carrier operating costs are also contributing to rate increases. Carriers report higher insurance, maintenance, and equipment costs. Volatility in diesel prices and foreign exchange rates create additional exposure for Mexican carriers.

As operating costs rise and the pool of qualified drivers shrinks, carriers are likely to become more selective about the freight they accept. Dedicated or longer commitments, balanced round trips, realistic timing expectations, and better forecasting can give carriers greater predictability. Shippers that support those carrier goals may be better positioned to secure reliable capacity at more attractive rates.

Trade flows post a record, but the composition keeps shifting

Mexican exports to the United States reached a record 13% year-over-year (y/y) increase for the first half of 2026, keeping Mexico the top supplier of U.S. imports, ahead of Canada and Taiwan with a 17.1% share. June alone marked an all-time high for the month. Data on the origin of foreign investment points in the same direction: The United States remains Mexico’s largest source of foreign direct investment, at 48% of the total. This emphasizes how deeply integrated supply chains remain under USMCA.

Export trends strengthened in July. The growth, however, is concentrated. Manufacturing exports increased 45.7% y/y, led by a 64.9% increase in non-automotive exports. Electrical and electronic equipment rose 134%, while automotive exports grew 2.4%. Several analysts estimate that if computing equipment was excluded, export growth to the United States this year would be closer to 5%.

Employment is paralleling these trends. Jobs in transport equipment fell roughly 3.5% y/y, while electronics employment rose 3.8%.

For cross-border transportation, this points to continued strength in freight linked to technology infrastructure; electrical systems, machinery and components; and specialized manufacturing. It also means demand may concentrate in the production regions and border corridors serving these industries.

Imports of intermediate goods to Mexico—including materials, parts, and components used in manufacturing—increased 56.3% y/y in July. By comparison, imports of capital goods increased by 9.9%. This suggests that manufacturers continue to bring in substantial inputs to support current export production, while investment in production capacity is expanding at a more moderate pace.

Automotive has not reached stable recovery

Mexico remains an automotive manufacturing power, but the sector is no longer the clear growth engine for freight demand.

The automotive sector in Mexico entered the second half of the year with production still under pressure and export growth remaining below the broader manufacturing sector. Automotive exports increased 2.4% y/y in July, including a 3.7% increase in shipments to the United States.

The industry’s path forward depends on three variables: U.S. vehicle demand, the outcome of the USMCA negotiations, and automaker decisions on where individual models will be produced.

With the United States taking 76% of Mexico’s light-vehicle shipments in the first half of the year, any shift in demand, consumer preferences, or inventory strategy would flow directly into Mexican export and freight volumes.

Rainy and hurricane seasons are here

Weather is now a more relevant variable for cross-border capacity and routing. Current forecasts point to a below normal 2026 Atlantic season, well under historical averages. Low risk should not be read as no risk.

Shippers with time-sensitive cross-border freight should build contingency routes and lead time into planning through October, as weather disruptions can still create localized infrastructure and transportation disruptions that affect cross-border operations.

Extended hours pilot program in Laredo

The Nuevo Laredo and Laredo customs offices at World Trade Bridge announced a three-month pilot to extend operating hours on Saturdays, beginning September 5. The measure is intended to improve the competitiveness of the crossing, accelerate freight movement, and give current and new users an additional operating window.

The bridge will remain open until 7 p.m. on Saturdays, instead of 4 p.m. For shippers, this creates a potential planning advantage in Laredo, particularly for freight that benefits from greater scheduling flexibility. Results of the pilot will be reviewed every 15 days, and the extended hours may be adjusted as the program progresses.

U.S.–Canada

Rate and capacity outlook for Canada

Truckload rates for intra-Canada and cross-border Canada-U.S. remain elevated compared to 2025, but not nearly at the level of increase experienced in the U.S. market. Freight demand for both domestic Canada and cross-border shipments remained strong through July compared to the 2025 tariff-impacted market. But the more recent trade conflict between the U.S. and Canada has the industry monitoring the freight impact for the second half of the year.

On the supply side, truck capacity remains near a five-year low, according to LoadLink’s Truck Index. With significantly fewer trucks available per load than last year, carriers have more pricing leverage. Meanwhile, higher oil and diesel costs are another price-inflation reality that both carriers and shippers are navigating.

Trade policy impacts

Trade policy uncertainty has become one of the most significant factors influencing Canada-U.S. freight flows in the third quarter. Recently imposed U.S. tariffs of 50% on certain Canadian goods created a measurable response in transportation markets, as many shippers accelerated cross-border shipments ahead of the August implementation date. The result was a temporary surge in freight demand, tighter capacity, and upward pressure on pricing in select Canada-to-U.S. corridors.

The market reaction highlights how sensitive cross-border freight flows have become to policy developments. Demand has since moderated, but shipment activity remains more volatile than normal as businesses assess potential outcomes of trade negotiations and evaluate sourcing, inventory, and transportation strategies. Retaliatory Canadian tariffs are set to go into effect September 8.

Adding to the volatility is the dynamics between tariffs and preferential treatment under USMCA. While the details continue to evolve, the changing trade rules have caused many shippers to revisit supply chain assumptions that were previously considered stable.

Volatility as a new normal

From a freight perspective, the primary challenge is not necessarily the tariffs themselves. Sudden shifts in shipment timing, inventory positioning, and sourcing decisions can quickly tighten capacity in some lanes while softening demand in others. As a result, transportation markets may experience more pronounced swings than would normally be expected from underlying economic conditions alone.

Ultimately, cross-border freight continues to move. However, trade policy remains the largest wildcard in the Canada-U.S. market. Any significant development in ongoing negotiations could quickly alter freight flows, capacity availability, and pricing dynamics as supply chains position themselves for the next phase of the trade environment.

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