Borderlands: Nuvocargo raises $5.3 million for cross-border operations; CBP seizes 352 pounds of marijuana in New Mexico

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Nuvocargo raises $5.3 million for cross-border freight operations; Nogales importers donate free produce to the community; cargo at Mexico’s seaports decline during the first quarter; CBP seizes 352 pounds of marijuana at Santa Teresa port of entry.

Nuvocargo raises $5.3 million to expand cross-border freight operations

Cross-border digital freight forwarder Nuvocargo has received multi-million seed funding to expand the company’s operations in both the United States and Mexico.

The $5.3 million in seed funding came from both sides of the U.S.-Mexico border, including Silicon Valley-based NFX and Mexico City-based ALLVP.

Deepak Chhugani, Nuvocargo co-founder and CEO, said the company would use the seed funding to build out its management team in both New York and Mexico City.

Nuvocargo’s goal is to become every shipper’s “one-stop shop” for all things related to U.S.-Mexico cross-border trade. Image: Nuvocargo

“We are going to grow teams across product engineering, operations and sales,” Chhugani said from the company’s headquarters in New York. “We are going to use the funding to build the best possible team at the intersection of very distinct worlds, which are the logistics industry, Silicon Valley, Latin America and the U.S.”

Nuvocargo’s software helps shippers coordinate door-to-door transportation between the U.S. and Mexico, including procuring trucks on both sides of the border, customs clearance, insurance, trade finance and reporting.

The software is free for shippers and shows shipment data, updates and reports in one web-based dashboard. Nuvocargo provides users with shipment updates via WhatsApp, email or SMS.

Chhugani said he began meeting with investors about seed funding before the coronavirus pandemic began in the U.S.

“We started right before; we were just very lucky to have investors that had conviction. We just got lucky on timing,” Chhugani said.

NFX, based in San Francisco, has “built 10 companies with more than $10 billion in exits across multiple industries,” according to its website.

ALLVP is a venture capital firm based in Mexico City. The firm focuses on Latin American founders or companies with a focus on Latin America.

Antonia Rojas, partner at ALLVP, said, “more than almost any other industry, cross-border logistics involves complex interactions across multiple cultures, sectors and stakeholders. I’m thrilled to join Deepak and Sam Blackman (Nuvocargo co-founder and chief technology officer) as they transform a massive industry still untouched by technology.”

Other investors include One Way Ventures, Maya Capital and Magma Partners. The $5.3 million total also includes earlier backing from investors including Y Combinator.

Nuvocargo’s clients, like most businesses across North America, have been affected by the pandemic.

“It’s been kind of a mixed response for clients. Mexico shut down non-essential activities as of April 1, and so that was kind of an interesting curveball for everyone in the industry, including our shippers and carriers,” Chhugani said. “We are in a fortunate position that we’re still continuing to see growth overall as a company.”

Nogales importers donate produce from Mexico to community

A coalition of produce importers and nonprofit agencies partnered to distribute more than 2,500 boxes of fresh produce to residents last week in Nogales, Arizona.

The free produce giveaways took place on April 18, 19 and 23. Residents received free boxes filled with tomatoes, bell peppers, zucchini, watermelons and other food products.

The Mariposa port of entry in Nogales is one of the largest import hubs for produce in the United States, supplying everything from tomatoes to watermelons to supermarkets throughout the country,

Organizers of the giveaway said Nogales has been flooded with excess produce as demand from restaurants, hotels and schools has dwindled due to coronavirus-related closures and restrictions.

“Fifty-two percent of all the fruits and vegetables in the whole country are sold through the foodservice sector. We’ve lost about 96% to 97% of our foodservice business all over the country and all over Canada,” Jaime Chamberlain, president of J-C Distributing and chairman of the Greater Nogales-Santa Cruz County Port Authority, according to the Nogales International.

Mexico’s seaports show decline in volume during the first quarter

Mexican seaports totaled 69.76 million metric tons of cargo during the first quarter of 2020, 7.9% less than the same period in 2019, according to Mexico’s Secretariat of Communications and Transport (SCT).

The ports have been affected by the ongoing impact on the policy of increasing tariffs on international trade between the United States and China, as well as the disruption on supply chains caused by the coronavirus, according to the Mexican Institute of Transport (IMT).

The largest decline during this first quarter came from the transport of oil and derivatives, totaling 27.86 million metric tons in 2020, an 11.7% drop compared to the same period last year. Mineral bulks reached 16.46 million metric tons during the first quarter, an 8.8% decline compared to last year.

Bulk transport of agricultural products actually increased 9.8% during the first quarter, from 3.77 million metric tons last year, to 4.14 million metric tons in the first quarter.

The major seaports in Mexico include the ports of Manzanillo, Lazaro Cárdenas, Veracruz, Altamira and Ensenada.

CBP seizes $1 million marijuana load concealed in trailer

U.S. Customs and Border Protection (CBP) seized 352 pounds of marijuana at the border port of entry in Santa Teresa, New Mexico.

The drug bust occurred on April 21 at the CBP commercial cargo facility at the United States-Mexico border.

A CBP officer noticed irregularities during an inspection of a flatbed tractor-trailer making entry from Mexico.

The officer referred the tractor-trailer for a secondary inspection. CBP officers in the secondary examination area used an X-ray scan and a screening by a drug-sniffing dog.

CBP officers discovered 130 marijuana-filled bundles hidden in the frame of the trailer. The drugs have an estimated street value of $1 million.

“Although anti-terrorism is our primary mission, we remain vigilant to ensure commercial entries are safe and that cargo and conveyances are free of contraband,” CBP Santa Teresa Port Director Fernando Thome, said in a release. “I commend the attentiveness of the CBP officers for finding narcotics in what was manifested as an empty trailer.”

According to officials, the drugs were seized and the case remains under investigation.