VOICE OF THE INDEPENDENT, MARCH 2015 11

Technology key for forwarders in Mexico

JIHAD EL KHOURyDelmar International

MEXICO is ideally located as a conduit for trade not only to the lucrative North American market, but also for the burgeoning economies of Central and Southern America. It has become an important country for investment by both US and European companies and this has led to a presence being established by a number of ambitious independent forwarders from these markets.

One of these is Delmar International that has strategically expanded its core operations in Canada and the US to new locations around the world. Latin America is seen as a great opportunity, according to Managing Director,

Jihad El Khoury.

“Naturally most of Mexico’s trade, in fact up to 90 per cent, is with the US and Canada. However, there are huge opportunities to grow logistics services to Southern and Central America to markets such as Brazil, Chile and Colombia. Mexico is becoming an important supplier of goods to these markets.”

To serve the US market Delmar has invested in new infrastructure as it realises its ambition to become an important player. “Laredo is the main border crossing, with some 11,000 trucks crossing per day. We now have a 70,000 sq ft warehouse to meet the market demand. The volumes of freight to the US are very buoyant. However, trade with Europe remains slow due to the weaknesses in some major Eurozone countries.”

It is not only exports from Mexico that are growing, El Khoury says that imports of raw materials from Asia, “used for the fabrication of finished goods”, are also on

a strong upwards trend, which he says provides more exciting prospects.

As Delmar grows its footprint in Latin America (it also operates an office in Brazil), it has established a useful knowledge of how these markets work and the challenges forwarders face.

“The new government has been proactive in addressing the pressing issue of cargo security in Mexico. Theft and other cargo crime is something we all need to take seriously and a number of measures have been introduced to improve this and therefore ease the fears of foreign investors. One

measure taken is a major strengthening in the capabilities of the rail infrastructure. Many companies are now using this for domestic transport, as it is more secure than trucking. In addition, there are significantly more military checkpoints and these measures helped drive

down cargo crime by 25 per cent last year.”

El Khoury says that the trend towards ‘near-shoring’ to the US market continues and is attracting a lot of foreign investment. “Many global companies are now using Mexico as a hub for exporting to the US. Automotive is very strong, for example Audi are currently building a big new plant, joining other names such as Ford and General Motors. It is not only the OEMs but also many tier 1 and tier 2 suppliers to the industry that are moving here. Some 155 companies have opened operations in the centre of the country that has become established as the automotive centre of excellence. In addition, the healthcare and food and beverage sectors are also growing fast and there are numerous infrastructure projects.”

Although there are plenty

of opportunities, El Khoury says that competition among logistics companies is fierce. “It is a challenging environment as competition intensifies and demand with Europe remains weak. To succeed you need to differentiate yourself from the competition. You need to offer something extra alongside cost-effective logistics and high service levels for which independent forwarders excel. For us it is technology that is the key and this offers us an edge over the competition. We have developed our own systems that integrate seamlessly with our customers providing them

with outstanding visibility of their operations and their shipments.”

The system can be adapted to meet the particular needs of each customer and all the information is available online on a clear, colour coded easily navigable screen. “From purchase order management through to full track and trace of individual shipments, the system is intuitive and responsive to customer needs. Customers view a mirror image of our system so there is full transparency. They can choose 1, 5 or 10 reporting milestones and we manage that for them.”

The advanced technology Delmar offers not only helps them win business from small and medium sized exporters/importers, but also helps them take on the multinational freight forwarders. “The multinationals have a big footprint in Mexico, however, they compete on price not service. We remain aggressive on price, but offering that personalised service, combined with advanced technology and systems, makes us attractive to many shippers. This has allowed us to grow

our market share to North America. Today if you don’t have the technology it is hard to compete with the multinationals.”

“Many global

companies are now

using Mexico as a hub for exporting to the US”

Latin America