Shipping manufacturing equipment to Mexico

Tecma Group of Companies:

Hello welcome to another installations of Tecma Talk podcasts during which we have discussions with internal experts to the Tecma Group of Companies, as well as individuals that are well-versed in a variety of topics that are related to manufacturing in Mexico from outside of the company. This is in order to provide useful and information that listeners can put into practice. Today, we are fortunate to have with us Dan Gotaas. Dan is the president of a company called Apex Diversified. Dan, first of all, hello to you. Could you tell us a little bit about and about the company that you run?

Dan Gotaas:

Absolutely. Apex Diversified is a freight forwarding warehousing full blown, one-stop-shop transportation and logistics company. We are based in El Paso, Texas and have roughly over fifty years of experience in the industry. We’ve been there from the start to the current date, including the changes that have transpired over the last several years. . We are now in the process concentrating on the Mexico side of the industry. This is as far as crossing things from overseas and from the United States. We have found that this is a very strong niche of operations for us. That’s kind of where we stand right now.

Tecma Group of Companies:

Typically, discussions that we have in these podcasts, as well as the content that appears in our Mexico manufacturing blog, has had to do with shipping to Mexico in terms of components and assemblies, and things that are integrated into products that are subsequently manufactured there and exported to various destinations. In this podcast, let’s take a step back in the process and talk about shipping manufacturing equipment to Mexico? In other words, the machinery that utilzes the inputs to make the products that are exported. Dan, I know that, depending on the size of a machine, for instance you could have metal stamping, plastic injection molding or CNC machines, or, even Swiss screw machines. In terms of size, what is it that directs thinking when you contemplate what kind of equipment to use when shipping manufacturing equipment to Mexico?

Dan Gotaas:

The main focal point is the dimensions of the product from a height and width standpoint. This is determined from answers regarding this issue from potential customers. With this information, we can apply the correct trailer to use when shipping manufacturing equipment to Mexico, whether it be a “flat bed,” a “step back,” or a “low boy.” Also, with this information we can contemplate whether or not an escort will be required. That kind of thing.

Tecma Group of Companies:

So, basically, that is the first thing that you have to know when dealing with a company with whom you are speaking regarding shipping manufacturing equipment to Mexico. Once you determine what equipment is appropriate, there is the question of loading it. I would assume that either some kind of special equipment, or even human beings, might be to ship the manufacturing equipment that is being shipped to Mexico on board the conveyance. Typically, what do you encounter when you have somebody under contract to be shipping manufacturing equipment to Mexico that belongs to them?

Dan Gotaas:

The majority of the time, what we ship is large equipment. We have to determine whether or not the process of shipping manufacturing equipment to Mexico is going to require a crane to lift it off the ground. At times, we’ll pick items up that won’t fit through the dock doors so they have to be disassembled, then reassembled. The biggest problem that we have when picking things up is facilitating to proper crane, or the proper lifting equipment to get the equipment stabilized on the trailer itself.

Tecma Group of Companies:

With respect to making sure that the equipment is being shipped to Mexico gets there in one piece you take a lot of time and care to make sure that it is not going to get damaged, what that be a correct assumption?

Dan Gotaas:

Absolutely. When shipping manufacturing equipment to Mexico we make sure that it is tarped and protected from the elements. Yes sir.

Tecma Group of Companies:

The US leg of shipping manufacturing equipment to Mexico, specifically to the border itself, is pretty straight forward. Basically it entails choosing the right piece of equipment, then, of course, getting it on the conveyance, and then driving it to the border. What happens when the machinery that is going to be used in production in Mexico when it get to the border. Can you walk us through the process? What is needed in terms of paperwork? Physically what happens? Could you expand in those areas?

Dan Gotaas:

Yes. For the most part, most of the time when shipping manufacturing equipment to Mexico crossing is made at one of four ports in El Paso. When we move equipment to Juarez, we do so through a port named Santa Teresa in New Mexico. The reason why we use Santa Teresa is that the weight limit at that crossing is much greater. We can put a lot more weight on those roads, and the permits that are required that are required, for the most part, stop at the border. From the US to Mexico, we use an escort vehicle to get the equipment to its appropriate destination. One of the focal points that we emphasis when equipment gets to the border is to do all that we can when shipping manufacturing equipment to Mexico is to keep it on the same piece of equipment. What I am saying is that we use the same carrier. When shipping manufacturing equipment to Mexico is a real challenge to find conveyances that will pull the same equipment through with the same trailer. The last thing that we want to do is bring the equipment into El Paso and have to load it on to a Mexican carrier, or back on to a trailer. We want to eliminate the possibility of all kinds of damages occurring. What we do is to use the same trailer to cross into Mexico. From the time it gets loaded at the shipper’s location to the time that it arrives at the location of the consignee, it is on the same piece of equipment. As far as other challenges go, our customs department can process the paperwork required for shipping manufacturing equipment to Mexico pretty quickly. It takes about an hour to get this done. After that we have about forty-five minutes to get the load to the border, and to get it checked in with Mexican Customs and crossed. Again, the biggest challenge that we face
is making sure that the equipment always moves on the same piece of equipment to minimize the possiblity of damages occurring.

Tecma Group of Companies:

There are two things that come to mind, given what it is that you just said: The first thing has to do with people who do not have a great deal of familiarity with the Ciudad Juarez region. You mentioned that, because of weight considerations, you transit equipment that you are shipping to Mexico through Santa Teresa because of weight considerations. Santa Teresa is to the west of Ciudad Juarez. For people who are not familiar with the geography, how far west of Ciudad Juarez is the port of entry at Santa Teresa, New Mexico?

Dan Gotaas:

The Santa Teresa Port of Entry is approximately ten miles west of Ciudad Juarez.

Tecma Group of Companies:

The second thing that comes to mind is that I hope you will be able to clarify is that under IMMEX, the program that enables manufacturers to temporarily import things into Mexico and avoid paying Mexican value added tax on those items, if you are certified as such. You can import machinery under a temporary importation permit that creates a waiver of the VAT tax on the item when it is brought into the country. Do the brokers that are under your direction file the paperwork that is required to avoid the assessment of Mexican value-added tax when shipping manufacturing equipment to Mexico under a temporary import permit to manufacture items that are subsequently going to be exported?

Dan Gotaas:

Absolutely, yes.

Tecma Group of Companies:

What tips would you objectively give to a company that is looking to find someone capable of shipping manufacturing equipment to Mexico? Also, if a party is communicating with several different companies that are capable of doing the work, what are the questions that they should ask to the providers that they are considering?

Dan Gotaas:

The number one question to ask would be to inquire as to whether or not the product stays on the same trailer crossing into Mexico to minimize the chances of damage. That seems to be the number one challenge in terms of scheduling who is shipping manufacturing equipment to Mexico, and is the most important thing to ask about.

Tecma Group of Companies:

When your company is shipping manufacturing equipment to Mexico on behalf of a customer, do you include what it costs to insure the equipment while it is transiting to Mexico in the price that you quote for your services, or is something that the shipper has to pay extra for? How is machinery that is being shipped to Mexico insured and protected from any kind of damage?

Dan Gotaas:

Primarily,from a freight forwarding standpoint, the carrier that is performing the services, meaning the”asset-based” shipping company, has the insurance to protect against damage. Here at Apex, we go a step beyond that. We actually have our own cargo insurance as a back up to cover any damages that may occur. We are providing an insurance policy for ourselves, as well as the customer that is looking for the service.

Tecma Group of Companies:

I would assume that being located in Ciudad Juarez, which is the largest manufacturing center on the border, that you are pretty busy these days. Would that be correct?

Dan Gotaas:

Yes, we are very busy which is a good thing.

Tecma Group of Companies:

What is the composition of the business that you are attending to at this moment in time? What kind of items are you seeing most going southbound?

Dan Gotsaas:

What we are seeing alot of are raw materials and products that are used for electronics manufacturing.

Tecma Group of Companies:

That would indicate that the electronics industry in Ciudad Juarez is just chugging along. Is that right?

Dan Gotaas:

Yes, that’s correct.

Tecma Group of Companies:

There are people that will listen to this podcast that would like to call you to pick your brain and learn how you can help them in terms of their shipping manufacturing equipment to Mexico. Are you limited to Ciudad Juarez, or do you ship to other places in Mexico?

Dan Gotaas:

We do Juarez, Chihuahua and we are actually going to be branching off to Nogales, Hermosillo and Obregon over the next six months. By all means, if anyone has any questions, even if they are not interested in using Apex Diversified, they should feel free to give me a call in order to pick my brain.

Tecma Group of Companies:

Dan is there a phone number at which you can be reached?

Dan Gotaas:

People with questions can reach me at the office at 915-242-0080 or they can call me on my cell phone. The number is 915-526-8487. It is always turned on.