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Case Study

Ag-tech Case Study

Releasing Stranded Inventory Without Entering Mexican Commerce

Prevented $552,000 in duty and tax exposure

$3MInventory released for sale
$552KDuty and tax exposure avoided
12Stranded containers moved

Previous Process | Mexico FTZ strategy

  1. Origin suppliers in Asia
  2. Ship to Mexican ports
  3. Blocked from Mexico FTZContainers stuck at Mexican ports
  4. $3M inventory unable to reach US market

Challenge

A change in Mexican Customs regulations eliminated the customer’s ability to process their goods through a Foreign Trade Zone (FTZ) without value-added work being performed on the product. As a result, 12 containers carrying approximately $3M in inventory became stranded at various ports in Mexico. Without a compliant alternative, the customer faced significant duty and tax exposure, escalating storage and demurrage costs, and delayed product availability to the US market.

Mexpress Process | Direct in-bond to Laredo · no entry into Mexican commerce

  1. Containers move ex-Manzanillo
  2. International in-bond move
  3. Laredo, TX entry and delivery

Solution

  • Evaluated alternative import strategies and established a compliant process for routing cargo directly from the seaport without entering the goods into Mexican commerce
  • Defined documentation and international in-bond requirements to support the new process
  • Validated the approach with two trial shipments before expanding to the remaining containers

Business Impact

  • Avoided $552,000 in duty and tax exposure associated with entering the goods into Mexican commerce
  • Enabled $3M of suspended inventory to become available for sale
  • Prevented further accumulation of storage and demurrage costs already in the tens of thousands
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