Strategic Bonded Warehouse in Mexico Drives Expansion for Leading ATV Manufacturer

A globally recognized automotive leader had a Mexico facility that serves as a critical manufacturing hub, producing all-terrain vehicles (ATVs) for both domestic Mexican sales and worldwide export markets.

Operating under one of Mexico’s trade facilitation programs, the facility leverages the program to import materials and parts used in the assembly process. However, this trade facilitation comes with a specific requirement: assembled products must be exported from Mexico and cannot be sold domestically without first undergoing a nationalization process.

Process complexities amid shifting demand

Due to significant growth in the Mexican market, the manufacturing facility was experiencing a fundamental shift in demand patterns. The ATVs originally built primarily for export were now increasingly needed for domestic Mexican sales, creating a complex and costly operational challenge that required immediate attention.

The existing procedure required any assembled vehicles being sold domestically to be shipped from Mexico to the United States for export clearance before being reimported back to Mexico for nationalization. 

This process resulted in additional costs and extended lead times. It also introduced greater risks and complications associated with moving goods across borders.

The company was open-minded, but reserved about making a change. The existing process was familiar and predictable. However, it was clearly impacting the company’s ability to serve customers in Mexico efficiently and competitively. They wanted to implement a new solution before the process impacted customer satisfaction levels.

Innovative solutions at the heart of automotive excellence

Recognizing the complexity of the challenge, C.H. Robinson began developing a tailored solution that would fundamentally transform how the automotive leader approached their customs compliance processes. The proposed solution was unlike anything available in the market.

C.H. Robinson assembled a cross-functional team, including account management specialists, customs experts, and North American surface transportation representatives, while the manufacturer engaged their virtual operations team, nationalization specialists, trade compliance team, plant operations staff, and additional supporting departments. This collaborative approach ensured every aspect of the existing operation—including legal compliance—would be carefully considered and optimized in the new process design.

The breakthrough emerged with the development of a streamlined process, featuring the establishment of a strategically located bonded warehouse close to their existing production facility that eliminated the need for crossing international borders.

The transformed process offers remarkable efficiency:

1. Direct transfer: Finished vehicles move directly from the plant to the local strategic bonded warehouse
2. Local processing: Comprehensive inspection, inventory control, and physical review all occur onsite
3. Streamlined customs: Customs declarations are submitted directly to Mexican authorities without unnecessary movement of the vehicles
4. Immediate availability: Vehicles are ready for immediate sale and distribution to customers in Mexico
5. Flexible inventory: The solution allows the company to hold a single, flexible inventory pool and decide on the final destination of each vehicle based on real-time market demand.

The implementation process required careful planning and execution over six months, with C.H. Robinson managing every aspect of the transition to ensure seamless operations and compliance with customs regulations. Weekly project meetings brought together key stakeholders to maintain alignment and address challenges as they arose. 

A critical component of the solution involved integrating comprehensive serial number tracking, photographic documentation, and detailed audit trails, giving both companies unprecedented insight into inventory status and processing timelines through the C.H. Robinson transportation management system (TMS).

The implementation also included extensive testing and optimization phases, beginning with pilot program execution that allowed both teams to identify and address potential issues before the full-scale launch. Process refinements were made based on initial results, followed by comprehensive team training across all stakeholder organizations to ensure everyone was prepared for the new operational model. The final phase involved rigorous performance validation and formal sign-offs from all parties.

The implementation wasn't just about logistics—it was about change management. C.H. Robinson helped the company navigate the operational changes involved with the bonded warehouse, and the organizational ones too.

Measurable results. Transformational impact.

The implementation of the strategic bonded warehouse delivered remarkable results that exceeded all initial expectations. In fact, the transformation has fundamentally changed how the manufacturer operates in Mexican markets, providing competitive advantages that extend far beyond simple cost avoidances.

The most immediate and visible impact has been the dramatic reduction in processing time. What previously required several days of complex cross-border logistics now takes a maximum of 48 hours, with the capability to process vehicles in mere hours when urgent customer needs arise. This improvement represents an 55% cut in processing time, completely revolutionizing their ability to respond to customer demands and market opportunities with unprecedented agility.

From a financial perspective, the solution helped the company avoid 34% of transportation and customs costs compared to the previous process. These savings continue to scale with volume, providing ongoing value that strengthens their competitive position in the automotive market.

The financial impact exceeded all expectations, but the operational improvements have been equally valuable. C.H. Robinson looked beyond just the immediate problem, completely transforming how the automotive leader thinks about what's possible in cross-border operations.