Borderlands: Mundi launches finance tool for Mexico-based freight forwarders

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mundi launches a finance tool aimed at Mexico-based freight forwarders; more manufacturing jobs are headed for Mexico; Dachser Mexico is providing cross-border services for a tuna shipper; and CBP releases a cross-border trade operational update.

Mundi launches finance tool aimed at Mexico-based freight forwarders

Financial services platform Mundi recently launched a digital factoring solution aimed at Mexico-based freight forwarders exporting goods to the United States.

The New York-based startup said its non-recourse factoring solution could provide financial services that give transportation and logistics companies the capital to kick-start their operations as the global trade market continues to recover from the pandemic.

“We are now at a level 3% above when the pandemic started, and with the United States-Mexico-Canada Agreement in effect, we believe the growth will continue in the coming years,” Martin Pustilnick, Mundi CEO and co-founder, said. 

Founded in 2020, Mundi focuses on small to midsize Mexican exporters shipping to the U.S., aiming to reduce the risk and inconsistency involved with many B2B transactions in the cross-border marketplace.

Large banks have traditionally been the main lenders in global trade finance, including supply chain finance, historically funding more than 80% of the transactions.

Large banks began slowly withdrawing from the sector more than a decade ago, partly as a result of an increase in capital requirements — such as Basel III regulatory requirements — caused by the global financial crisis of 2008.

The regulatory changes were initiated by governments around the world. In July 2013, the Federal Reserve Board finalized a rule to implement Basel III capital rules in the U.S.

The loss of financing from large banks has resulted in a $1.5 trillion trade finance gap in global supply chains, according to Pustilnick. 

Revenue from the global trade finance industry could rise beyond pre-coronavirus pandemic levels to $54 billion as soon as 2022, according to a forecast made by Coalition, an S&P Global-owned research company.

Mundi recently hosted a webinar called “Key Trends in the Freight Forwarder Industry for 2022,” during which officials said 80% of the export market in Mexico is concentrated toward the U.S.

Pustilnick said there is untapped potential with small and medium-sized enterprise (SME) exporters in Mexico that need financial support.

One of the differences between a bank and Mundi’s factoring solution is that banks often only focus on large companies, while Mundi works with SMEs and has a 100% digital application process.

Paulina Aguilar, Mundi’s Mexico director, said its international factoring tool is focused on SMEs by giving them access to capital with longer payment terms and other benefits.

Mundi’s non-recourse factoring solution also allows freight forwarders and logistics companies to offer payment terms to their customers and receive payment immediately, without taking default risk.

Aguilar also said traditional banks analyze financial history, while Mundi also takes into account invoicing and export information. 

“One of the lessons the COVID-19 pandemic has taught us is that organizations that are the most agile and adapt to the new business environment will survive,” Aguilar said. “This also influences the way companies solve liquidity problems, demonstrating that traditional banking is not up to the current necessities of exporters and freight forwarders who are still growing.”

More manufacturing jobs headed for Mexico

Kawasaki Heavy Industries Ltd. and HNI Corp. recently announced either new or expanding manufacturing facilities in Mexico that will create about 800 jobs.

Tokyo-based Kawasaki is expanding an existing motorcycle engine plant in the Mexican city of Monterrey that will be completed in 2023. It will complement Kawasaki’s motorcycle facility in Lincoln, Nebraska, which the company is also expanding.

Kawasaki will invest a total of $265 million in Monterrey and Lincoln.

The expansion in Monterrey could generate up to 550 jobs. Kawasaki did not specify how many jobs would be added to its Lincoln facility.

Muscatine, Iowa-based HNI Corp. is investing $18 million to build an office furniture manufacturing plant in Saltillo, Mexico.

The factory, which is scheduled to be completed in 2022, will create 250 jobs.

Dachser Mexico providing cross-border services for tuna shipper

Logistics provider Dachser Mexico will oversee transportation of Tuny-branded canned tuna products into the United States.

Tuny is produced by Mexico City-based Grupomar SA, a family of companies producing canned and frozen products marketed through various brands. Grupomar also owns and operates tuna vessels and longliner boats. 

Dachser Mexico is providing trucking services from a Grupomar warehouse in Monterrey to its final destination in Laredo, Texas. 

In addition to providing trucking services, Dachser Mexico is also handling full container load ocean freight shipments for Grupomar. The FCL shipments will be unloaded from Mexico’s Port of Manzanillo to various ports in New York and Los Angeles, as well as San Juan, Puerto Rico, and Puerto Caldera, Costa Rica.

Dachser USA Air & Sea Logistics is a unit of Kempten, Germany-based Dachser Group, which offers transport, logistics and warehousing services in maritime and road solutions. 

CBP releases cross-border trade operational update

In fiscal year 2021 to date (October through August), U.S. Customs and Border Protection has processed $2.6 trillion of imports, an increase of nearly 15% compared to the same period in 2020.

CBP also has seized 77,416 shipments for trade violations in the current fiscal year.

Trade via ocean shipments accounted for more than 40% of the total import value, followed by air, truck and rail.

CBP also seized 2,186 shipments in August that contained more than $300 million in counterfeit goods.

Drug seizures at ports of entry had mixed results in August, with heroin seizures down 36%, while fentanyl seizures increased 34%, cocaine increased 32% and methamphetamine increased 13%.

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