strategicinsight SUPPLY CHAIN SOUTH OF THE BORDER
Mexico today is pretty much state of
the art,” says Gene Sevilla-Sacasa,
vice president and managing director of Ryder Latin America. “If you
look at the average fleet today versus
10 years ago, it’s much bigger and
much younger.”
Vehicle tracking systems are ubiquitous now. Indeed, they’re a condition of doing business with large
shippers, says Con-way Truckload’s
vice president of operations, Saul
Gonzalez. All but two or three of
Con-way’s 80 Mexican partners use
Qualcomm’s satellite tracking system. The U.S. carrier’s system interfaces with those of its partners, providing real-time notification of
events and pinpointing the location
of the 2,000-plus trailers it typically
has in Mexico or along the border
each day.
Trucking isn’t the only mode that’s
modernizing. The government’s policy of granting operating conces-
sions to private operators, which
typically pay most of the development costs, benefits rail, port, and
intermodal services, says Carlos
Bouffier, an independent consultant
who works with the consulting firm
TranSystems. The government often
provides assistance to private infrastructure projects in order to create
jobs and boost local economies, he
says. Recently, for instance, national
and local governments helped to
build roadways, utilities, and industrial parks for vehicle-assembly
plants and associated parts manufacturers, Bouffier notes.
There’s more work to be done.
Some intermodal yards, such as the
one at Monterrey, are badly congested, and funding problems have
delayed construction of container
terminals at Punta Colonet, says
Ben Fuqua, a vice president with
TranSystems. There is some good
news on the intermodal front,
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though. The Port of Lázaro Cárdenas on
Mexico’s West Coast boasts a new container terminal and expanded shipping services. The Kansas City Southern de Mexico’s
rail service from that port has opened up
the market for importing raw materials and
other products for final assembly inland,
and provides rapid access for the finished
goods to U.S. markets, Fuqua adds.
Facilities and technology
Not too long ago, you could safely assume
that warehouses and distribution centers in
Mexico would be inefficient, mistake-prone, manual operations. That’s no longer
the case for facilities that serve large
Mexican and multinational companies.
“There’s been tremendous improvement
in warehousing,” says Ryder’s Sevilla-Sacasa. “If you go back 10 years, it was difficult to find a very good warehouse. Now,
I would say we operate five million square
feet of warehouse space in Mexico, and all
of it is AAA, state-of-the-art facilities with
very, very good security.” It’s still not easy to
build those warehouses, though. According
to the World Bank publication Doing
Business in Mexico 2009, the biggest obstacle to building a warehouse is getting utility connections, such as water, telephone
lines, sewers, and electricity.
Many operations rely on the same warehouse management systems and transportation management systems that are
popular north of the border, and workers
use similar types of equipment and software to store, pick, pack, and ship products.
In fact, vendors of material handling and
dock equipment say that Mexico is one of
their fastest-growing markets.
Mexican companies are under the same
cost and service pressures as their counterparts up north, and that’s boosting investments in supply chain technology, says
Francisco Giral, CEO of NetLogistik, a systems integrator that represents RedPrairie,
Vocollect, and UPS Logistics Technologies
in Mexico and Argentina. “We still have a
five- to 10-year gap [in technology compared to the United States],” he says, “but
that’s diminishing.”
In the past, companies typically relied
on homegrown applications, but sales of
best-of-breed solutions have climbed in
the last five years. One reason is that most
