Appendix b: Description of the Northbound Border-Crossing Process

TABLE OF CONTENTS

Introduction [1](#__RefHeading___Toc26602628)

NORTHBOUND BORDER-CROSSING PROCESS [3](#__RefHeading___Toc26602629)

Mexican Shipper [3](#__RefHeading___Toc26602630)

Mexican Long-haul Carrier [3](#__RefHeading___Toc26602631)

Mexican Customs Broker [5](#__RefHeading___Toc26602632)

U.S. Customs Broker [7](#__RefHeading___Toc26602633)

Drayage Carrier [8](#__RefHeading___Toc26602634)

Mexican Export Compound -- Mexican Customs
[9](#__RefHeading___Toc26602635)

Border Bridges and Roadways [10](#__RefHeading___Toc26602636)

U.S. Port of Entry [10](#__RefHeading___Toc26602637)

Primary Inspection Module - U.S. Customs
[10](#__RefHeading___Toc26602638)

Secondary Inspection -- Multiple Agencies
[12](#__RefHeading___Toc26602639)

Exit Inspection -- U.S. Customs [14](#__RefHeading___Toc26602640)

U.S. Long-haul Carrier [15](#__RefHeading___Toc26602641)

U.S. Consignee [15](#__RefHeading___Toc26602642)

References [16](#__RefHeading___Toc26602643)

APPENDIX B: DESCRIPTION OF THE NORTHBOUND BORDER-CROSSING PROCESS

[]{#__RefHeading___Toc26602628 .anchor}Introduction

The complexity of trans-border truck movements is a function of the
stakeholder activities and interactions they entail. A shipment
originating in central Mexico may require processing or handling by a
dozen or more entities before it reaches its final destination in the
United States. Understanding the various roles of key government
agencies and private-sector groups in this system enables a more
detailed assessment of the underlying issues and problems that
contribute to border congestion and delay.

This document provides a step-by-step account of the conventional
northbound border-crossing process for truck-borne trade. Descriptions
of stakeholder activities, referenced in a schematic diagram, depict the
flow of goods and documentation from origin to destination (Figure B-1).
There are several potential variations to the process described on the
following pages. Problems encountered by any of the stakeholders can
result in delays much longer than those cited. The southbound
border-crossing process is substantially different from the northbound
process and is not addressed in this document.

![](media/image1.wmf){width="8.93125in" height="5.820138888888889in"}

Figure B-1. Flowchart of the Northbound Border-Crossing Process for
Truck-Borne Trade.

[]{#__RefHeading___Toc26602629 .anchor}NORTHBOUND BORDER-CROSSING
PROCESS

[]{#__RefHeading___Toc26602630 .anchor}Mexican Shipper

The Mexican shipper is the exporting firm that initiates the
cross-border movement (Figure B-1, Point 1). Its primary partners in the
export process are the U.S. consignee, the Mexican and U.S. customs
brokers, and the Mexican long-haul trucking firm.

The extent of exporter and importer responsibilities in international
commerce is defined by the incoterms in the sales contract. For most
truck shipments between the United States and Mexico, these terms
specify transfer of liability at the border. Under this scenario, the
shipper's main responsibilities are to arrange transportation and
brokerage services in Mexico, load the trailer, and provide information
about the shipment to the Mexican trucking firm(s) and the customs
brokers. In practice, cargo information is often electronically
transmitted to only one of the shipper's supply-chain partners (U.S.
consignee, Mexican customs broker or U.S. customs broker) and then
distributed among the other parties (Figure B-1, Point 2).

Paper documents normally furnished by the shipper include the commercial
invoice, cargo manifest, and the NAFTA certificate of origin. A Mexican
bill of lading (carta porte) and a packing list may be provided in some
cases. Fax and email are the preferred methods of exchanging information
among supply-chain partners. If complete, accurate information is not
transmitted to the customs brokers in advance of the shipment's arrival
at the border, delays may result.

[]{#__RefHeading___Toc26602631 .anchor}Mexican Long-haul Carrier

The long-haul carrier is a trucking firm that provides freight
transportation to companies exporting to the United States from the
interior of Mexico. The transportation process begins with the carrier
spotting an empty trailer at the shipper's factory or warehouse. When it
is loaded, the long-haul tractor returns, hooks up to the trailer, and
transports it to a pre-specified commercial crossing along the
U.S.-Mexico border (Figure B-1, Point 3). In fiscal year 2001,
commercial border crossings in Laredo, El Paso and Otay Mesa processed
approximately two thirds of all northbound truck movements between
Mexico and the United States (Table B-1).

The Mexican leg of the northbound transportation process takes one to
two days for shipments originating in Mexico's industrial heartland (the
Monterrey-Mexico City-Guadalajara triangle). Long-haul carriers usually
prepare the bill of lading for these movements although the shipper is
legally permitted to perform this task. Most long-haul carriers operate
trailer depots at the border that serve as pick-up and drop-off points
for international movements. When a shipment bound for the United States
arrives at the Mexican carrier's border depot, the U.S. customs broker
is contacted. This party notifies the Mexican customs broker, and the
document preparation and submission process begins (Figure B-1, Point
4). Shipments that reach the border zone in the morning usually cross
into the United States the same day. Those arriving in the late
afternoon or evening often must wait until the following day to cross
the border.

Table B-1. Northbound Truck Crossings through U.S. Port Systems, Fiscal
Year 2001.

![](media/image2.wmf)

Source: U.S. Customs Service

[]{#__RefHeading___Toc26602632 .anchor}Mexican Customs Broker

A licensed Mexican customs broker is the only entity legally permitted
to prepare and file export documentation (pedimento de exportación) in
Mexico. The first step involved in preparing the pedimento is
classification of the cargo according to the Mexican Harmonized Tariff
Schedule. For northbound shipments, neither the Mexican nor the U.S.
broker documentation process entails a physical review or unloading of
the cargo. Pedimento information is subsequently transmitted to Mexican
Customs via the Mexican Customs Brokers Association (Asociación de
Agentes Aduanales) (Figure B-1, Point 5). Correctly filed pedimentos are
validated by a broker representative (Figure B-1, Point 6) and assigned
an alpha-numeric barcode (referred to as an electronic signature) by
Mexican Customs (Figure B-1, Point 7). The Mexican customs broker
affixes this barcode to paper copies of the pedimento so that Mexican
Customs can electronically scan the documentation and close out the file
when the truck arrives at the border. Use of a bar-coded pedimento also
facilitates shipment tracking and the collection of duties, fees, and
statistical information by the Mexican government.

Mexican export taxes are payable electronically or in person prior to
arrival of the shipment at the export compound. Payment is normally made
by the Mexican broker on behalf of the shipper and is secured by a bond.
Maquiladora shippers are permitted to use consolidated pedimentos that
are filed and paid on a weekly basis.

Before a shipment can proceed across the border, all U.S. and Mexican
brokers prepare and file hard copies of the Mexican pedimento and the
U.S. Inward Cargo Manifest (also known as the Carrier's Certificate).
The Inward Cargo Manifest is the main document used to import
merchandise into the United States. It contains vital information about
the carrier, exporter, importer, and cargo (including the shipment's
U.S. entry number) and may be completed by either the U.S. or Mexican
customs broker.

A broker or drayage-firm employee presents the pedimento and Inward
Cargo Manifest to the truck driver hauling the shipment across the
border. Transfer of these documents usually occurs at a broker office in
the immediate vicinity of the crossing, on a roadside prior to the
Mexican export compound, or while the truck is waiting in a queue to
cross the border (Figure B-1, Point 8). Mexican broker cycle times for
preparing and filing documentation can range from a few minutes to
several hours depending on the nature of the cargo, the shipper's export
experience, and the shipper-broker relationship, the broker's workload,
among other factors. Fees for preparing and filing Mexican export
documentation range from US\$25-\$30 for a homogenous maquiladora
shipment to US\$55-\$60 for regular freight (excluding disbursements).

[]{#__RefHeading___Toc26602633 .anchor}U.S. Customs Broker

Because the activities of Mexican and U.S. customs brokers are
overlapping and simultaneous, communication between these stakeholders
is an important facet of the crossing process.

Several scenarios exist for the preparation and processing of U.S. entry
information. In most cases, cargo is classified according to the U.S.
Harmonized Tariff Schedule (two digits longer than the Mexican
Harmonized Tariff Schedule), a unique 11-digit entry number is assigned
to the shipment, and information is electronically filed with U.S.
Customs via the Automated Broker Interface (ABI) system (Figure B-1,
Point 9).

Customs brokers were once obliged to file ABI information and submit
hard copies of import documentation four hours before a shipment crossed
the border. Today, the U.S. Customs Service requires only that import
information be electronically transmitted before the shipment arrives at
the port of entry. Some port directors request that ABI information
precede shipments by at least one hour to ensure sufficient time for
data analysis.

Upon receipt of a valid ABI transmission, U.S. Customs confirms
acceptance of the information (Figure B-1, Point 10). The U.S. broker
notes the entry number on the Inward Cargo Manifest or provides it to
the Mexican broker (Figure B-1, Point 11). Marking the Inward Cargo
Manifest with the entry number allows officials at the U.S. port of
entry to verify that the paperwork submitted by the driver matches what
was filed electronically by the U.S. broker. Cycle times for the
preparation and submission of U.S. broker documentation are similar to
those offered by Mexican brokers (a few minutes to several hours). U.S.
broker charges for classification of the shipment and transmission of
import information normally range from US\$25-\$50. Charges for
complicated or multiple-classification shipments (such as apparel) often
cost US\$55-\$85 (excluding disbursements).

Approximately 10 percent of truck entries on the southern border are
processed under a special U.S. Customs initiative called the Border
Release Advanced Screening and Selectivity (BRASS) program.[^1] BRASS
expedites the border-crossing process for repetitive, low-risk shippers
that export a minimum of 50 trailer loads of merchandise to the United
States annually. Each BRASS shipper receives an identification barcode
that enables its shipments to enter the country without prior
transmission of entry information by the U.S. broker. Additional
benefits include faster Customs processing and fewer secondary
inspections at the U.S. port of entry. In order to participate in BRASS,
shippers must have a history of customs compliance and utilize trucking
firms that are certified in the U.S. Customs Service's security-based
Carrier Initiative Program (CIP).

Although tariffs on North American trade have diminished since the
implementation of NAFTA and are now quite rare, they are not scheduled
to be completely phased out until 2005. Most U.S. brokers electronically
pay import duties on behalf of the U.S. consignee using the Automated
Clearinghouse payment method. A compliance bond allows duties for
regular shipments to be paid up to 10 working days after they have
entered the United States. Legislation enabling monthly duty
consolidation and payment for BRASS shipments is expected to be extended
to all freight in the near future.

[]{#__RefHeading___Toc26602634 .anchor}Drayage Carrier

A northbound shipment originating in the interior of Mexico may be
transported across the border by a drayage or long-haul trucking firm.
Drayage carriers are trucking firms that specialize in shuttling freight
over short distances. At the U.S.-Mexican border, binational accord
grants trucks from both countries the right to pick up and drop off
cross-border movements within commercial zones extending 3-20 miles
beyond either side the of the international boundary.

Drayage carriers are responsible for crossing the vast majority of
trailers at the two busiest gateways for U.S.-Mexico truck traffic,
Laredo-Nuevo Laredo and Otay Mesa-Tijuana. Delays and congestion at
these gateways have made trans-border movements uneconomical for most
long-haul carriers using modern equipment. Short-haul maquiladora moves
between factories, assembly plants, and distribution centers in the twin
border cities of El Paso, Texas, and Ciudad Juárez, Coahuila, drive a
thriving drayage industry in that region.

Other major gateways, such as Nogales-Nogales and Pharr-Reynosa, are
heavily influenced by seasonal exports of Mexican produce. This freight
is transferred to the U.S. commercial zone primarily by Mexican
long-haul trucks. Instead of contracting traditional drayage services,
drivers that do not possess a valid U.S. visa and commercial license
hire "contract drivers" to deliver their shipments across the border.
Despite the security and insurance risks involved in this method of
shipment transfer, the contract driver system is used for a large
portion of the northbound crossings at these gateways.

Where drayage carriers are utilized, the trailer-transfer process starts
with the dispatch of a drayage tractor to a long-haul carrier's border
depot. The driver engages the loaded trailer and hauls it to the border
crossing (Figure B-1, Point 12), collecting the export pedimento and
Inward Cargo Manifest en route (Figure B-1, Point 8). Once the driver,
truck, shipment, and documentation have been assembled, the unit
proceeds into the Mexican Export Customs compound. One-way drayage
services across the border usually take between one and three hours and
cost US\$100-\$200.

[]{#__RefHeading___Toc26602635 .anchor}Mexican Export Compound --
Mexican Customs

The Secretaría de Hacienda y Crédito Público (Mexican Customs) is the
principal Mexican agency involved in the inspection of freight entering
and leaving the country. Unlike U.S. Customs, Mexican Customs
occasionally inspects outbound freight prior to export. The main purpose
of these inspections is to verify that duty-free temporary imports do
not remain in Mexico and to ensure that all applicable export duties and
taxes are paid.

When a shipment arrives at the Mexican Export Compound, it is subject to
a random selection mechanism (red-light/green-light system) that
determines whether it must undergo a physical inspection (Figure B-1,
Point 13). Between 1 and 10 percent of loaded northbound commercial
vehicles are reported to receive a red light at this station..[^2]
However, Mexican Customs brokers indicate that export inspections are
quite rare and that this figure is exaggerated. In any event, export
inspections may involve the partial or complete unloading of a trailer
and take anywhere from 30 minutes to several hours (Figure B-1, Point
14). A representative of the Mexican customs broker that prepared the
shipment's export documentation must be present during this inspection.

Trucks that receive a green light proceed to the compound's exit gate
(Figure B-1, Point 15). Export documentation and clearance authorization
are checked here before the shipment is released to cross the border.
Shipments that do not undergo export inspections normally take a few
minutes to half an hour to clear the Export Compound, depending on
traffic.

[]{#__RefHeading___Toc26602636 .anchor}Border Bridges and Roadways

There are 25 commercial border crossings that connect Mexican and U.S.
customs compounds. Many large crossings serve trucks exclusively while
others serve segregated flows of commercial and passenger vehicles.
Border-crossing infrastructure varies in length from a few hundred yards
to several miles and usually requires payment of a toll (Figure B-1,
Point 16). Northbound charges range from US\$1-\$3 per axle (regardless
of vehicle weight) and are collected manually or by means of an
account-based system.[^3] Transit times between the Mexican Export
Compound and the U.S. port of entry are determined by the level of
congestion at the U.S. Primary Inspection Module.

[]{#__RefHeading___Toc26602637 .anchor}U.S. Port of Entry

Sixty-five governmental agencies monitor and regulate U.S. trade.[^4]
Only a handful of these, however, significantly impact the
border-crossing process. Port of entry inspection activities on the U.S.
southern border have traditionally focused on preventing illegal drugs
and contraband from entering the country, guarding against illegal
immigration and the introduction of agricultural pests, protecting U.S.
public safety and commercial interests, and ensuring the collection of
duties and taxes. In the wake of September 11, 2001, the prevention of
terrorist attacks has become a top priority for U.S. border agencies and
has resulted in greater scrutiny of drivers, shipments, and conveyances
at U.S. ports of entry. The U.S. commercial inspection process can be
broken down into three broad categories: primary, secondary, and exit
inspections.

[]{#__RefHeading___Toc26602638 .anchor}Primary Inspection Module - U.S.
Customs

Northbound trucks may be subject to canine (narcotics detection dogs) or
other inspections before reaching the port of entry complex, but their
first mandatory stop in the United States is usually the Primary
Inspection Module (Figure B-1, Point 17). This module normally comprises
two to eight processing booths, each staffed by a Customs (or
Immigration and Naturalization Service) agent. The peak-period arrival
rate of trucks at these booths often exceeds their processing capacity.
The congestion that forms backs up onto border roadways and bridges,
creating pre-primary delays that range from 30 minutes to more than two
hours at major crossings.

Upon arrival at the primary inspection booth, the truck driver presents
identification (proof of citizenship or a valid visa or laser card) and
a copy of the Inward Cargo Manifest to the agent. After verifying the
driver's identification, the agent types the entry number on the Inward
Cargo Manifest into an Automated Commercial System (ACS) computer
terminal. The ACS matches the entry number to import information that
was filed electronically by the U.S. broker and subsequently reviewed by
Customs headquarters in Washington, D.C.

If the information on the paper manifest corresponds to that in the
electronic file, and a hold (obligatory inspection) has not been placed
on the shipment by Customs headquarters, the agent uses his or her
discretion to determine whether a secondary inspection is necessary.
This decision is typically based on driver responses to questions, a
brief review of the outside of the vehicle (possibly including
inspection with a density detector or other hand-held inspection
instrument), and the reaction of canine units to the truck. In some
cases, a driver's license, vehicle registration, insurance, trip permit,
or other documentation may be requested. Since September 11, 2001, some
ports of entry open trailers at the Primary Inspection Module to conduct
a brief visual review of the cargo/inside of the conveyance.

All trucks entering U.S. ports of entry pay a mandatory user's fee for
the provision of U.S. Customs and Department of Agriculture services.
The per-trip charges for these services are US\$5.25 and US\$4.50
respectively, payable at the primary inspection booth. Drayage trucks
and other commercial vehicles that regularly cross the border can
purchase an annual exemption decal for US\$185.

Processing times at the Primary Inspection Module average one to two
minutes per truck. Commercial vehicles that do not pass over a U.S.
weigh-in-motion scale upon crossing the border may be directed to a
static scale within the port of entry. Trucks not requiring weight
checks, special permits, or further inspections are sent directly to the
compound's exit gate. Agents note required secondary inspections on the
Inward Cargo Manifest.

[]{#__RefHeading___Toc26602639 .anchor}Secondary Inspection -- Multiple
Agencies

There are varying opinions among border-agency officials as to what
constitutes a "secondary inspection". For the purposes of this report, a
secondary inspection is defined as any inspection that the driver,
freight, or conveyance undergoes between the Primary Inspection Module
and the exit gate of a U.S. port of entry.

The principal agencies that conduct secondary inspections are the U.S.
Customs Service, the U.S. Department of Agriculture (USDA), the Food and
Drug Administration (FDA), the Environmental Protection Agency (EPA) the
U.S./State Departments of Transportation (DOT), and State Departments of
Public Safety (DPS) (Figure B-1, Point 18).

If the rationale for the secondary inspection is related to drugs or
suspicion about the contents of the load, the truck is sent to a
Non-Intrusive Inspection (NII) station operated by Customs or the
National Guard. NII equipment scans the contents of tractors and
trailers/containers, reducing the need for time-consuming and expensive
manual inspections. The two most common NII technologies currently
employed on the southern border are the gamma ray VACIS (Vehicle and
Container Inspection System) and the truck X-ray. Most major U.S.
commercial crossings operate between one and three NII machines.
Shipments requiring further review after scanning are directed to a
loading dock for manual cargo inspection.

The advent of NII equipment renders some of the loading dock capacity at
U.S. land ports obsolete. Although Customs still conducts a small number
of manual inspections, most dock space is now occupied by the USDA and
FDA. Shipments examined by these agencies rarely require complete
unloading of the cargo. Instead, the inspector selects a random sample
for analysis. This expedites the inspection process and minimizes losses
due to spoilage. The stevedoring costs for partially or fully unloading
shipments at U.S. and Mexican Customs compounds are paid by the
Mexican/U.S. customs broker and charged to the shipper/consignee of the
freight.

The EPA is the principal agency regulating the importation of hazardous
materials into the United States. The EPA requires 24 hours advanced
notice of all hazmat shipments arriving at U.S. ports of entry. In some
regions, hazardous materials are restricted to specific routings and
crossing schedules. Secondary inspections of hazmat shipments are
conducted in isolated areas of the Customs compound.

Regardless of the freight being transported, all trucks and drivers
passing through U.S. ports of entry must meet certain safety standards.
The California Highway Patrol facilities at Otay Mesa and Calexico,
California, are the only permanent U.S. truck safety inspection stations
on the U.S. southern border. Other ports of entry rely on U.S. DOT and
state DPS personnel to conduct truck safety inspections within the
secondary inspection areas of Customs compounds.

The U.S. government's decision to implement the NAFTA trucking
provisions between the United States and Mexico during the summer of
2002 is contingent upon satisfaction of new safety criteria. The most
salient public-sector requirements of these criteria are the hiring and
training of 214 state safety inspectors and the construction or
improvement of truck inspection facilities at the U.S.-Mexico border. As
of July 2002, nearly all of the new personnel had been appointed, and
temporary truck inspection facilities at 23 of the 25 commercial border
crossings were ready.[^5] Truck inspection activities at smaller
crossings are scheduled to continue at expanded sites within Customs
compounds. Dedicated facilities adjacent to larger border compounds will
eventually inspect 100 percent of the trucks entering the United States
from Mexico.

The percentage of shipments sent to the diverse U.S. secondary
inspection stations varies from crossing to crossing but is generally
consistent with the availability of inspection capacity. Customs strives
to ensure that its NII equipment is kept continuously operating. The
private-sector reports that, occasionally, port directors impose
inspection blitzes where 100 percent of the vehicles entering the port
during a given time period are sent to an NII station. Officials at
smaller ports of entry that lack NII equipment typically conduct higher
rates of canine and manual narcotics inspections (Table B-2).
Approximately 10 to15 percent of shipments governed by the USDA are
physically examined.[^6]

The length of time commercial vehicles spend waiting for and undergoing
secondary inspections is also highly variable. NII inspections take
between 2 and 12 minutes to complete but may require queuing times of 30
to 60 minutes. Delays for USDA and FDA inspections usually range from 20
to 45 minutes if an inspector is readily available.

Table B-2. Narcotics Exam Rates at U.S. Commercial Port Systems, Fiscal
Year 1998.

![](media/image3.wmf)

> Source: U.S. General Accounting Office

[]{#__RefHeading___Toc26602640 .anchor}Exit Inspection -- U.S. Customs

The final inspection at U.S. ports of entry occurs at the exit gate
(Figure B-1, Point 19). Customs agents review documentation to ensure
that all required inspections have been performed and that the driver,
truck, and cargo have been cleared to enter the United States. Exit
inspections are normally completed in a matter of seconds although
limited exit booth capacity and poorly designed egress routes result in
the formation of exit queues at some crossings.

[]{#__RefHeading___Toc26602641 .anchor}U.S. Long-haul Carrier

Once released from the U.S. port of entry, shipments destined for
plants, warehouses, or distribution centers in the U.S. commercial zone
are delivered. Trailers with final destinations beyond the commercial
zone are taken to a U.S. long-haul carrier's border depot (Figure B-1,
Point 20). The U.S. carrier or customs broker notifies the importer of
the shipment's arrival in the United States (Figure B-1, Point 21), and
final delivery of the cargo is arranged (Figure B-1, Point 22). Transit
times for the U.S. inland portion of the international movement
generally range from a few hours to several days, depending on the final
destination and the urgency of the shipment. The U.S. customs broker
currently prepares the domestic bill of lading for this movement (Figure
B-1, Point 23). A NAFTA bill of lading scheduled to be introduced in
2002/2003 proposes to replace multiple domestic bills of lading for
North American shipments. Truck traffic circulating in the U.S. may be
subject to weigh station exams, Immigration and Naturalization Service
checkpoints or State DOT and DPS roadside inspections (Figure B-1, Point
24).

[]{#__RefHeading___Toc26602642 .anchor}U.S. Consignee

The U.S. consignee's receipt of goods at destination concludes the
northbound movement (Figure B-1, Point 25).

[]{#__RefHeading___Toc26602643 .anchor}References

[^1]: "Border Release Advanced Screening and Selectivity" U.S. Customs
    Service presentation. Office of Trade Programs, Cargo Release
    Branch, U.S. Customs Service, March 4, 2002.

[^2]: Barton-Aschman Associates, Inc.; La Empresa S. de R.L.,
    *Binational border transportation planning and programming study:
    task 3.1 report: description of commercial motor vehicle trade flow
    process*, 1996

[^3]: Texas Department of Transportation, *Texas-Mexico International
    Bridges and Border Crossings Existing and Proposed -- 2001*, 2001.

[^4]: Intelligent Transportation Systems Joint Program Office, U.S.
    Department of Transportation, *Intelligent transportation systems at
    international borders: a cross-cutting study, facilitating trade and
    enhancing transportation safety*, Report FHWA-OP-00-003, 2001.

[^5]: Mead, K. M. Testimony Before the United States Committee on
    Appropriations, Subcommittee on Transportation on the Implementation
    of Commercial Motor Carrier Safety Requirements at the U.S.-Mexico
    Border. June 27, 2002.
    http://commerce.senate.gov/hearings/062702mead.pdf. Accessed on July
    8, 2002.

[^6]: Conversation with USDA Port Director and Supervisor, Nogales,
    Arizona, March 20, 2002.