Issue #49: The “MCA” of the USMCA
Bridging Borders: The Flow of Trade Between Mexico and Canada
I’m writing this from the airport as I get ready to head north, well more east than north, but The North, as they say. We’re heading to Toronto as a couple people from the team join me for a trip to Canada.
There are several logistics companies and trucking companies in Cargado’s network that are moving freight between Mexico and Canada and are based in Canada. They’re heavily concentrated in Ontario and Quebec, where both provinces play a huge role in North American trade. General Motors, Ford, Stellantis, and Toyota all have plants in the Greater Toronto Area (GTA), producing everything from SUVs to electric delivery vans. Companies like Bombardier (aircraft, rail equipment) and BRP (Bombardier Recreational Products—think Ski-Doo, Can-Am, and Sea-Doo), both headquartered in the Montreal area, rely heavily on Mexico for nearby manufacturing.
I’m excited to spend some time with customers and carriers who are moving cross-border freight and better understand how we can bridge the gap between Mexico and Canada, especially with all these threats of tariffs from the United States hanging over the market.
What kind of freight moves between Mexico and Canada?
I’ll repeat what I’ve explained before: a lot of U.S. domestic truckload volume is distribution rather than production. Production happens in Mexico and overseas, and goods are shipped into the U.S., where they are then distributed. Canada follows a similar strategy, outsourcing manufacturing to areas where labor costs are lower, like Mexico and Asia.
Because of shifts in supply chain strategies and nearshoring, a growing volume of freight now moves directly from Mexico to Canada, where it is then distributed. Most of those distribution points end up being Toronto, to service the eastern half of Canada, and Vancouver, to serve the western half of Canada.
Top 5 Products Shipped from Mexico to Canada (by truck)
Automobiles & Auto Parts – Vehicles built in Mexico, as well as parts like engines, transmissions, and electrical components, are shipped straight to Canadian auto plants and dealerships.
Fresh Produce – Avocados, berries, tomatoes, peppers, and other fruits and vegetables move north to keep Canadian grocery stores stocked.
Electronics & Appliances – TVs, refrigerators, dishwashers, and other consumer goods are manufactured in Mexico and shipped to Canadian distribution centers.
Building Materials – Tiles, stone, and construction materials are sent to support Canadian housing and infrastructure projects.
Alcohol (Tequila & Beer) – Mexico’s most famous exports don’t just stay in the U.S., Canadian consumers drive significant demand for tequila and Mexican beer brands.
Top 5 Products Shipped from Canada to Mexico (by truck)
Auto Parts & Machinery – Canada supplies engines, transmissions, and other vehicle components to Mexico’s manufacturing plants.
Industrial Equipment & Heavy Machinery – Equipment used in mining, oil, and industrial applications moves south for use in Mexico’s energy and resource sectors.
Plastics & Packaging Materials – Raw materials used in Mexican manufacturing plants are sourced from Canada.
Paper & Pulp – Canadian paper products and packaging materials supply Mexico’s consumer goods and manufacturing sectors.
Frozen & Processed Food Products – Canada ships a variety of frozen and packaged foods to Mexico, where they are used for retail and food service.
This freight moves over the road, via rail, and occasionally via air freight when time-sensitive deliveries are required.
What other complexities exist with Mexico <> Canada freight?
Generally, freight moving between Mexico and Canada moves in bond through the United States. This means that the trucking company responsible for the load — typically the one hauling from the U.S.-Mexico border to the Canadian border — opens a bond and ensures that the freight is transported safely without any product being consumed in the U.S.
This process allows shippers to avoid U.S. duties and taxes since the freight is just passing through. Think of it like paying a toll: most carriers charge between $150-$250 USD per load for in-bond transportation.
Is it tough to move freight from Mexico to Canada?
It’s about as challenging as moving freight from Mexico to the United States. Yes, you’re crossing an extra border, you’re dealing with a third culture, and you’re hearing a different accent, but the process itself isn’t all that complicated, especially when you leverage Cargado.
How could I not shamelessly plug our product?
I’ll be in Toronto until Thursday. If you’re in town and want to connect, reach out!