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How the Mexican Peso Is Impacting Cross-Border Transportation

The devaluation of the Mexican peso over the past two years has been rather extreme. Two years ago, one U.S. dollar was worth about 13.5 pesos, and today it’s worth about 18. As a result of this severe drop in value, U.S. goods have become very expensive for Mexicans, and Mexican goods have become cheap for Americans. In fact, many markets across the globe have become cheaper as the dollar has gotten stronger – making these markets, including Mexico, more attractive for U.S. companies.

The difference in the dollar versus the peso has led to Mexico importing less cargo due to higher costs and exporting more cargo as Mexican products become even cheaper for U.S. consumers. This imbalance in northbound and southbound trade has created a shortage of truck and rail capacity, making it much more difficult and expensive to source northbound equipment. The results are going to leave many shippers continuing to scramble for truck and rail capacity as carriers are forced to reposition empty equipment in order to meet the demand.

Read more here.
March 24, 2016