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DB Schenker Mexico has an exciting new lineup of initiatives planned for its current and prospective customers in 2019.
Mexico’s economy continued to grow in 2018 and is on track to expand by another 2.3% in 2019, according to the International Monetary Fund. The world’s 15th-largest economy, Mexico produces automobiles, electronics, oil and oil products, services, and various agricultural products that added up to a $1.1 billion national gross domestic product (GDP) in 2017.
With a presence in Mexico since 1977, and with physical locations in Monterrey, Guadalajara, Queretaro, and Mexico City, DB Schenker has expanded its customer portfolio, added new logistics services, and expanded its project logistics offering in 2018. “All of our divisions—including air, land, ocean, contract logistics, and customs—surpassed the previous year’s performance,” says Enrique Valera, Manager Director/Mexico HQ, “and well above our initial expectations.”
Diversity and Transparency
With a diverse customer portfolio that includes most of Mexico’s imports and exports, DB Schenker added a new blue-chip account to that portfolio in 2018, opening a new, 10,000-square-meter warehouse for the software maker in Ciudad Juarez. It also increased its footprint with several existing clients, including Tequila Sauza (in Guadalajara) and Cisco (in Ciudad Juarez).
According to Valera, both DB Schenker and its customers have benefitted from increased supply chain transparency over both ocean and air freight rates. “By the time they come to us, our customers have already seen their potential rates and capacity availability online,” says Valera, “whereas just a few years ago that information wasn’t readily available without having to make a phone call.”
Those higher levels of transparency align well with the logistics providers’ own technology platform, which strives to make its transactional rates more and more transparent for customers. “To continue operating and running our business, we have to charge a bit on top of the basic freight rates,” says Valera. “Customers understand and accept that, and they also appreciate the higher transparency levels.”
Focused on being the most cost-efficient logistics provider in the market, DB Schenker Mexico is continually whittling down its cost-per-file by using new systems, leveraging automation, and centralizing its services. In 2018, for example, the company centralized its ocean freight division using a “Target Operating Model” or TOM. “We took the operational footprint from TOM at the ocean freight level and implemented it in a single location in Mexico,” says Valera.
Today, DB Schenker Mexico’s operational center is located in Queretaro (about 180 miles from Mexico City). Over the next few months, the company plans to transfer its ocean freight files from both Monterrey and Guadalajara and over to Queretaro. Valera says this will help the logistics provider achieve a 45% cost reduction per file. “That’s our target,” he says, adding that DB Schenker Mexico launched this centralization initiative after struggling to manage siloed operations throughout its branches.
“We had different ways of handling things in different branches, and that’s natural,” says Valera. “By centralizing those activities, we’ll gain numerous efficiencies plus cost reductions and higher productivity levels.”
Expanding into New Territories
This year, DB Schenker Mexico plans to expand its already-substantial perishable business, which currently moves about 1,500 tons of products via airfreight annually. For 2019, the company plans to increase that number to 2,500 tons. According to Valera, this will find DB Schenker Mexico working with more avocado, citrus, and berry producers and distributors during the coming year.
To support this growth, the logistics provider has a competency center that’s focused on the fine details of moving perishable products around the globe. “There’s a certain expertise required for temperature-controlled goods,” Valera explains, “which means transit times are a key factor in how the product moves to its final destination.”
Another area of growth for DB Schenker Mexico in 2019 will include the country’s well-established automotive, aerospace, and pharmaceutical markets—all of which need value-added logistics and transportation services. On the product side, the company is also looking into adding more express services in Mexico. “We’re partnering with a few courier companies,” says Valera, “and also implementing a special transportation management system (TMS) add-on in order to deliver even more supply chain visibility to our customers.”
Also on the technology front, DB Schenker Mexico is ramping up its Global Workplace to include eQuotes for ocean freight—an initiative that will launch in 2019, and that will help the company further decrease its cost-per-file on freight quotes. Up next, it plans to tackle the centralization of its air freight operations. “We’ve already centralized customs and land freight and things are going very well,” says Valera. “We want to take that success and replicate it for air freight.”
Teamwork Makes the Dream Work
With a hefty agenda in front of it for 2019, and with more revenue growth expected over the next 12 months, DB Schenker Mexico wouldn’t be where it is today without the people who work for the company and those who support it. That dedication flows directly over to the company’s customers, who gain significant benefits from working with a team of experienced professionals who understand the intricacies of shipping to, from, and within Mexico.
“We’re a star employer here; we really make our people happy and they, in turn, make our customers happy,” says Valera. “It’s a great privilege to be a part of this team, and to be doing business in a country where customers are very open and embracing of new, innovative logistics approaches.”