FAQ: How do I pack goods to ship safely to Mexico?

Hello, my name is Sam Donkin, I am the assistant crossdock and facilities Manager with The Offshore Group in Tucson Arizona.  The company is the largest provider of outsourced manufacturing support, or “shelter” services, in Mexico.

I’m going to speak briefly about the best way to protect your items and/or materials when you are shipping them by trailer to Mexico.

The first example is of a resin material wrapped in a corrugated box with corner protectors and straps.   Everything is wrapped in plastic and prepared for shipment to Mexico.

Another way of protecting freight to Mexico is to stack uniformed size boxes with protective corners, strap them and wrap them with plastic.

When shipping materials south to Mexico you can’t be too careful to protect your valuable goods.

Another type of shipping material is a protective mesh crate. These bins contain small items and boxes, all stacked inside. This material will ship safely to Mexico and will arrive safe and free of damage.

For large loads, the use of shipping crates is often the best way to go. These crates can be stocked in a truck and will be completely untouched by other items that are in the trailer, as well as when they are being handled by loading and unloading personnel.

Again, my name is Sam Donkin. If you have any other questions of how you can ship your materials to Mexico, please contact me.

FAQ: What are the freight cost component costs of shipping to and from Mexico?

My name is Raquel Aguayo, I am the operations manager of the International Logistic Solutions (ILS) Company, the third-party 3PL logistics service provider of the Tucson, Arizona-based Offshore Group.

Today we’re going to talk about analyzing freight cost of shipping to and from Mexico.

• First, and most importantly, consumers of transportations services in Mexico must consider the price per mile that they are being charged to make U.S. – Mexico freight shipments.
• Second, check the cost of any applicable fuel surcharges.  These are the carrying fuel charges applied in Mexico and the United States.

• Third, drayage is the carrying fee incurred at border crossing.  This is the charge related to transferring trailers from one tractor to another at the U.S. – Mexico border.
• Finally the cost of transloading in the border (if applicable), or the cost of holding the transportation unit door to door.

Again, I’m Raquel Aguayo, I’m the operations manager of ILS Company, and if you have more questions please contact me.

Raquel Aguayo
Operations Director
International Logistic Solutions (ILS)
raquel.aguayo@ilscompany.com

FAQ: What is the benefit of vendor management inventory in Mexico?

My name is Juan Carlos Seldner, I hold the position of president of the International Logistic Solutions (ILS), an Offshore Group company. Our Mexico vendor management program truly enables suppliers to operate in the country, and near to their customers, overnight. The objective is to facilitate suppliers being in close proximity to their customers that are manufacturing in Mexico.

The benefit of vendor management inventory program in Mexico is that it is an excellent means of enabling manufacturers to manage their costs by having materials available to them on a true just in time basis, by having goods within their grasp, by NOT material input costs on manufacturers in Mexico’s books until they are released, and by avoiding expensive transportation expediting costs.

If you have vendor management inventory costs in Mexico, do not hesitate to contact me to further discuss more details.

Juan Carlos Seldner
President
International Logistic Solutions
seldner@ilscompany.com

Hello, my name is Orlando Murrieta. I’m the Import/ Export operations team leader for The Offshore Group. The North American Free Trade Agreement NAFTA established a free trade zone within Canada, U.S. and Mexico; it came into effect in January 1st of 1994 immediately lifting the tariffs of the goods produced within these nations.

In order to benefit from the NAFTA agreement, your company needs to follow these requirements:

1. Rules of Origin: we have two specific rules of origin:

a. General rules of origin, which talks about wholly obtained goods produced within these nations

b. Specific rules of origin set on Annex 401 of the NAFTA; these are designed to establish if foreign material is eligible to qualify for preferential duty treatment other than NAFTA.

2. Country of Origin Marking: NAFTA marking rules determine the duty rates and country of origin markings for applicable good under NAFTA.

3. NAFTA Certificates of Origin: certificates of origin must be completed by the exporter. A producer or manufacturer may also complete a certificate for the basis of completing the exporter NAFTA certificate.

In order to apply for NAFTA preferential duty treatments, the importer of record must possess a NAFTA certificate of origin at the time of entry. There must be record keeping or records related to a preferential duty treatment. These records must be kept for a minimum of five years.

4. Importer and Exporter obligations: these are set for articles 502 and 504 of the NAFTA.

These are the main requirements that a company must follow in order to stay in compliance and benefit from NAFTA. If you have any questions related to this topic, please feel free to contact me, thank you.

Hello. My name is. Robert Huerta. I’m the U.S. Customs Support Specialist for The Offshore Group

I’d like to point a few things that companies need to do in order to smooth out the movement of goods to Mexico, and to avoid delays by Customs at the U.S. – Mexico border’s commercial crossing points. Companies preparing to ship goods to Mexico should make sure to include the following basic information in the documentation to those that are transacting the border crossing through Customs:

• Part number

• Description in its function

• Country of origin

• Unit cost

• Unit weight

• HTS U.S.

Providing these bits of information can make the process of shipping goods to and from Mexico a smoother and faster one.

If you have further questions, please contact me.

raul.huerta@offshoregroup.com

The Offshore Group offers manufacturing support services or “Shelter Services” in Mexico for companies that want to reduce costs and risks, therefore helping them improve their competitive advantage.

Through The Offshore Group’s, Vangtel, similar services are offered to service companies seeking to reduce their call center, IT development and BPO services cost.

Lastly, International Logistic Solutions, or ILS, provides international or domestic 3PL services to meet your business needs.

My name is Luis Felipe Seldner; I’m president of The Offshore Group Shelter Services division, and I invite you to visit our website and contact us if you have any questions. Thank You.

The application is sent to HACIENDA (Mexico’s IRS), during the month; keep in mind that not all theof the Mexican VAT tax, or IVA, during the month is ready to be applied for a refund. In Mexico, there are cash facing accounts, and The Offshore Group’s accounting department needs to wait until the vendor’s cash those checks in order for us to request the IVA refund.

Mexico’s Hacienda reviews the refund application, and, assuming that the Mexican VAT tax information that has been submitted is correct, HACIENDA then processes the application. The Offshore Group gets the refund within 30 to 60 days from the day we submit the application.

Once we receive the approval from hacienda, then Maquilas Tetakawi our affiliate in Mexico turns around and gives The Offshore Group credit for those the Mexican IVA refunds that they’ve received.

At the same time, when we receive the credit, we credit the amount of IVA refunded to our clients through an invoice, unless the client requests a separate check.

Basically the timeframe from making a purchase to obtaining the VAT tax refund in Mexico is about 3-4 months. Please consider this for your cash flow forecasting.

If you have any more questions please contact me

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A question many companies often companies have is “can I receive the same comprehensive level of services for my Mexican entity if I use a shelter company in Mexico?”

The answer is yes.

The same kind of comprehensive services are provided to Mexican entities as well as non Mexican entities.

For example: Human resources and employment is provided under the shelter service, which is a way of maintaining reduced risk on a manufacturing in Mexico operation.

Other services that can be provided under the shelter services are: Import/ Export coordination, building maintenance and cross dock services.

If you have additional questions about using the shelter service with an established Mexican entity, feel free to contact us at the Offshore Group.

“The Offshore Group enables companies to concentrate on their core functions while realizing significant savings generated from economies of scale”

How to eliminate/ reduce duties when importing into Mexico?

There are basically 3 options:

First Option- Free Trade Agreements

There are Free Trade Agreements, between Mexico and the rest of the world.

Mexico participates in Free Trade Agreements with several countries such as: Europe, Israel, Japan, Canada and the United States, amongst others.

With this option, we encourage our clients to obtain valid certificate of origins, and when needed, we provide assistance in the procedure to issue those certificates.

Second Option-PROSEC Program (Promotional Sector Program)

PROSEC has a list of HTS classifications for different industries and goods intended to be manufactured in Mexico.

Once the good is classified, we apply a preferential duty rate on raw materials and equipment.

Third Option-Rule 8^th (Regla Octava)

If there are duties under PROSEC and/or there is no certificate of origin available, there is a third option, known as Rule 8th or Regla Octava.

This is a special rule that requires a petition by the Maquiladora with the Mexican Government to import free of duty raw materials and equipment.

If you have additional questions about how to eliminate/ reduce duties when importing to Mexico, feel free to contact us at The Offshore Group.

“The Offshore Group enables companies to concentrate on their core functions while realizing significant savings generated from economies of scale”.