You Don’t Need Nuevo Esquema de Empresas Certificadas to Improve Cross-Border Shipping with Mexico

You just have to make sure that that the goods are picked up with a destination in the United States, not near the Mexican border, even if the customs broker tries to insist that the goods have to stop at a location near the border for dreyage or inspection under current regulations. The reason your broker wants the goods to stop at a Mexican border destination like Nuevo Laredo is because you have to pay the IVA (Impuesto al Valor Agregado), Mexico’s Value Added Tax, which he will then get a tax credit for when he ships the goods out of the United States.

Even though the proposed reforms in Nuevo Esquema de Empresas Certificadas, include:

  • flexibility on location,
  • direct clearance by companies,
  • pre-validation of electronic import and export data, and
  • the need to use a Mexican customs broker on the U.S. side of the border to release goods for entry into Mexico is eliminated.

At the end of the day, it doesn’t matter if these rules are in effect now or not or if you have to use a Mexican trucker to move your goods, it matters whether or not you have to use a Mexican broker that insists on shipping your goods to a destination inside the Mexican border to collect IVA and dreyage at your expense. It’s like Mr. Locke pointed out in his piece on Cross-Border Shipping with Mexico last fall: some of the issues … are common in every country and the Mexican trucking industry is changing. A properly run IPO will get on-time delivery to your US customers in the 98% range over long periods of time … and that includes supplier performance, cross border performance and logistics performance in two countries and it will do so quite affordably if you’re smart about how you do things.

While the Nuevo Esquema de Empresas Certificadas, should it come into effect by year end, will make shipping easier, by making sure you’re doing everything right, and not using a double-dipping customs broker, you can improve cross-border shipping, and the associated cost, with Mexico now.

Just Like There Is NO Free Lunch, There is NO Free Shipping!

Paul Downs is right, There is No Free Shipping. (In fact, the Free Shipping Amazon Prime service is so profitable that Amazon is planning to raise their prices and profit off of their best customers even more!)

Even though shipping is no where near as complicated and human intensive and error-ridden as it used to be (provided someone scans the damn code, reads the response, and loads the item into the designated truck), it’s still costly, and will always be because:

  • Every form of transportation requires a vehicle*
    and all vehicles have acquisition and maintenance costs.
  • Every vehicle requires some form of power
    and all forms of power have a cost, even if they are based on renewable resources (as someone has to build and maintain the windmill). So, even if your item can be shipped locally on a hybrid powered by renewable energy, the cost will not go to 0.
  • Every vehicle requires an operator
    even if that operator is the programmer maintaining the system controlling the drone, and operators need to be paid.

This assumes you are shipping a normal, everyday item that is typically ordered from an online merchant and for which packaging and shipping has been optimized.

This doesn’t account for the situation where you are ordering a fragile item, which may need extra, and/or special, packaging, an oversized item, which can’t just be tossed in the mail or picked up in a normal UPS or FedEX delivery, or a very heavy item, like the custom-made conference tables that poor Mr. Downs had to ship across the country at a time where piece-shipping was even more of a pain the backside than it is now. In each of these cases there are extra costs in packaging, handling, pick-up, and delivery (as some items will require LTL freight through a local or national carrier).

In other words, shipping is expensive and anyone giving you free shipping is including it in the price, probably at a padded mark-up. So don’t fret the shipping, fret the total cost of the purchase relative to the value received. Sometimes if you shop around you can get a better product at a lower overall price, shipping included. (Going back to Amazon, it’s amazing how much some of the third party merchants that use Amazon’s Prime Shipping mark up their merchandise to cover the shipping costs. the doctor has seen $40 to $60 small items that ship for a few dollars almost double the MSRP, some of which even ship for free at half the price on other sites, because the online retailers are still making a profit if they can get someone to pay MSRP.)

So when you are buying a commodity or a consumable, whether for personal or business use, always look at the TCO. It’s often the case that a supplier who breaks out shipping is attempting to keep costs low across the board for both parties. That’s the type of supplier you want to deal with.


* Since we are talking about shipping and anything that can be walked down the street by a human is not considered shipping for Procurement and Logistics purposes.

Top 12 Challenges Facing India in the Decades Ahead – 06 – Health Care

As per our post on poverty, health care is a substantial problem in India. Not only does India have the 9th lowest life expectancy among the 16 countries outside of sub-saharan Africa that are poorer than it is, but is also has the 10th lowest infant and under-5 mortality rates and the second worst proportion of children under 5 who are undernourished! Then, as per our last post on education and opportunity, at leaset 93% of the workforce has no health insurance in a country leaning heavily towards privatized health care.

And this is just the tip of the iceberg. Almost 40% of all deaths in India are still due to infections! (Source: Health and Health Care in India by UCL) The majority of the remainder are due to non-communicable conditions such as cardiovascular diseases, chronic respiratory disorders, and cancers. (Compared to the developed world which manages most chronic respiratory disorders and some of the cardiovascular diseases so well that the patients often die from other causes.) In comparison, the only type of death due to infections to break the top 10 in Canada is death due to influenza and pneumonia which strike down 1.6% of the population to grab the 9th spot. In other words, the number of deaths in India due to easily treatable infections is at least 20 times higher than it should be!

India currently spends about 1.2% of GDP on publicly funded healthcare, an amount considerably less than most other comparable countries. In comparison, health care spending clocks in at 5.1% of GDP in China and Russia and 9% in Brazil! (Total spending on health care, including all private spend, is about 4%, but the private spending is mainly by the rich.) Due to this limited funding, and the substantially insufficient funding allocated to the National Rural Health Mission (NRHM) (as outlined in our post on Poverty), 400 Million to 600 Million of the poorest Indians do not get access to the essential medicines they need. When you also consider that India is now the worlds 3rd largest producer of medicine by volume, the absurdity of the situation really comes into the spotlight.

And progress is slow. Even if the extension of the Government’s National Common Minimum Programme, announced by Prime Minister Manmohan Singh on the country’s 66th Independence Day achieves its goal and provides access to free public health care to over half of the population by 2017 (as opposed to the fifth who currently have access) via the country’s 160,000 sub-centers, 23,000 primary health care centers, 5,000 community health centers, 1,000 sub-district hospitals, and 600 district hospitals, that will still leave hundreds of millions of Indians without access to even the most basic of health care services. (Furthermore, the proposal that the Federal Government would directly fund 75% of the relatively limited cost of extending the generic medicines supply to the public health service doesn’t go far enough. At least one third of the population cannot afford to pay even 25% of the cost of generic medicine, which, as it is produced in India, represents relatively little cost to the Government.)

And even though 160,000 sub-centers might sound-impressive, the requirements for a sub-center is one Auxiliary Nurse Midwife (ANM) and one Male Health Worker. That’s it. Not even a full nurse. You only find those in Primary Health Centers, Community Health Centers, and Hospitals. In addition, the primary health centers (PHC) also tend to be minimally staffed. They are only required to have one medical officer (doctor) who is supported by an average of 14 paramedical and administrative staff, in total, and, at current numbers, support a population base of 50,000 people! Furthermore, a community health center, which has to serve approximately 200,000 people on average, typically only has four medical specialists (a surgeon, general physician, gynaecologist, and paediatrician). Plus, per capita, the number of physicians is quite low. Right now, India clocks in at roughly 6.5 per 10,000 people (and many of the doctors are in the hospitals), while Canada has 20.7 and the United States has 24.2. (Source, KFF) Also, while India has roughly 1,600 hospitals to serve 1,237 Million people, the United States has almost 6,000 to serve 314 Million people. In other words, there are 15 times as many people per hospital in India as there are in the United States. (770,000 citizens per hospital in India vs 52,000 per hospital in the United States)

Health Care is a huge problem and one that desperately needs to be solved. After all, if your population is not healthy, how can you expect to give it a good education if it’s worrying about being well enough to study? And if you cannot educate it, how can you ready it to take advantage of any opportunity that may give it the hope of lifting itself out of poverty, something which must be done to increase the tax base enough to build the required infrastructure to support the fierce competition of today’s global economy?

You Can Have Your Google Chauffeur. I’ll Choose Good Ol’ Alfred Every Day of the Week!

For those of you who thought the doctor was needlessly calling #badwolf last Sunday in response to the automotive industry’s push for autonomous automobiles, SI would like to point out this recent BBC News article stating that Toyota is to recall 1.9 Million Prius hybrids.

Why is Toyota recalling 1.9 Million Prius hybrids? A software fault that may cause the vehicle to slow down suddenly. To date it has identified more than 400 reports of the problem, with the bulk of them occurring in (the heavily congested streets and highways of) Japan and North America. According to Toyota in limited cases, the hybrid system might shut down and the vehicle will stop, perhaps while being driven.

In other words, all a hacker has to do to cause multiple fatal multi-car pileups is hack the OnStar network and send a signal to all Prius’ vehicles to execute that specific part of the code. They don’t even have to break the OS and figure out how to craft a small virus that will hijack the control system or execute a dangerous set of commands — the hacker just has to send a signal telling the OS to execute the set of commands already there.

Now, presumably, this would (hopefully) result in the brake lights being triggered and the outcome may not be as deadly as it would be otherwise, but what about the other 99 Million Plus lines of code. How many similarly dangerous, untested, and, as-yet, unexecuted code sequences are also in the Prius? And every other electronically controlled car on the road?

They’ve yet to release a personal OS that isn’t riddled with more holes than there are potholes in Canada’s winter roads*1! I’m all for technological advance, but until we figure out how to write more bullet-proof, and secure, operating systems, let’s keep the OS out of the car and on the desktop where it belongs.

Now if you’ll excuse me, I have to go help LOLCat tell some meddling kids to get off my lawn!


*1 A slice of swiss cheese is quite solid in comparison!

Think China Trade is New? Think Again!

The first ship to trade with China, the Empress of China, set sail from New York 230 years ago today, transporting the first official representatives of the American government to Canton.

The outsourcing craze to China may be relatively recent, but American trade with China began a mere 8 years after they declared independence and within a year of Great Britain accepting that the United States was an independent nation.