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Jordan Dewart has spent a 25-year career in cross-border trade between the US and Mexico.
As president of Redwood Mexico, the cross-border division of Redwood Logistics based in Monterrey, Mexico, he builds on relationships he built over decades in the country, leading an NYK subsidiary he founded in the late 1990s.
Longstanding relationships with hundreds of carriers in Mexico have allowed him to build a business that now handles more than 30,000 cross-border shipments annually and closes in on $100 million a year in sales, Dewart said.
“I basically moved to Mexico and started a company right when the NAFTA deal was starting,” he told Trucking Dive. “A handshake means something. Your word means something. It’s a relationship business.”
In an interview, the division president shared insights on the supply chain approach and his bullish expectations for the future of US-Mexico cross-border trade.
This interview has been edited for clarity and brevity.
DIVING: Could you tell us about Redwood Mexico?
JORDAN DEWART: We describe our business as a modern 4PL. We transport trucks, participate as a 3PL, as a truck broker. We have our own trucks, our own trailers, but we also use a huge network of transport companies on both sides of the border. We handle loads for huge companies. We have services like logistics platform as a service, TMS, from TMS resale to TMS implementation.
But the most important thing, I think, that we do is connect disparate systems together, really focusing on what’s called “middleware.” All these great systems, all these great platforms, in the industry don’t talk to each other and it’s very expensive to connect. With Redwood Connect, we connect, quite simply, anything to anything.
We have over 30,000 US trucking companies contracted through our TMS. We have over 150 staff, what we would call ‘boots on the ground’, providing a number of different services from customer service, tracking, tracking, carrier sales, truck brokerage, to the technology side.
What trucking insights can you share about the recent trend of supply chain approach?
DEWART: What’s kind of scary from our perspective is, obviously, the fares to the US are down. In Mexico it is exactly the opposite. It is very durable. Prices are actually going up in Mexico, for a number of reasons. Volume is just one of them. But every element of trucking has become more expensive: driver pay, fuel, insurance, toll roads, you name it.
Mexico can’t have enough drivers on its trucks, so Mexican trucking companies aren’t adding much capacity to their fleets right now. So nothing changes on the supply side. Demand is growing and we will get more.
Probably in 2024 or 2025, we will see a perfect storm like we had during COVID, with incredibly high carry rates. It’s going to get very interesting, very quickly.
What changes have you noticed in the types of goods transported each time?
Dewart: Automotive is a really big space that we’re in. The top five to ten retailers in the US, every single one of them is very heavily involved in Mexico. Home improvement and fast moving goods, food and beverages, this is another thing that moves in Mexico.
Fifty years ago, T-shirts and tequila crossed borders. The car industry was really rare. Then the companies realized, “Okay, anything that’s really big and bulky, we’re going to have to make it in Mexico.” Televisions, appliances, refrigerators, every line of refrigerators, washers, dryers, dishwashers and microwaves is made in Mexico.
Because of the size and cost of shipping them by air carrier? Other factors?
Dewart: It is, and the American consumer continues to become more sophisticated. You don’t want a fridge at all. You want a very specific and specific color, with the correct door configuration. You want to be able to customize every single thing. You don’t just want a blue car. You want a green car with beige seats and the stereo in it. Correctly? From Mexico City to Chicago, it can be done in three, three and a half days. From Shanghai, it takes one month. Anything highly customizable must be made in Mexico.
What do you see heading in the other direction? How can this change?
Dewart: You’d be blown away by the number of exports to Mexico, but at the end of the day, if it’s going south to Mexico, it’s going to be some kind of raw material, like a volume of raw material. So it will be like copper, steel, aluminum, plastic, plastic pellet or sub component parts.
Once it gets into Mexico, they use the country’s vast natural gas supply to melt and forge and seal and plastic injection mold these things into really shiny, sophisticated parts. And then they have assembly lines to assemble them, package them, and ship them.
For example, Lego — one of their largest factories in the world is in Monterey, just south of the border. There are so many products that you don’t realize are made in Mexico. It is, and if it isn’t, it certainly will be in the next decade.