Client Proximity Helps Create GrowthFri, 12/01/2017 - 17:03
Q: What drove Hellmann’s growth in 2016?
PZ: Depending on our line of business, we are growing between 10 and 15 percent year-on-year, which is above the logistics industry’s average of approximately 5 percent. Service has been a priority for Hellmann and has been the cornerstone of our growth. Unlike other companies that focus on building their commercial presence first, we seek to be as close to our clients as possible so we open offices wherever we are needed. We prefer to not offer our services when we know we cannot comply with clients’ requirements and we have found they value this honesty. There is nothing worse than failing a project and having a negative reputation preceding you. Our staff is also a huge part of our success.
Our talent turnover per year is less than 1 percent, which gives clients confidence in how things are run at our company. Companies always deal with the same person and they are certain their cases see continuity. At Hellmann, we always try to develop our own talent first, before hiring someone new to fill a high-level position.
Q: What are Hellmann’s plans to offer added value to clients?
HR: In Mexico, 40 percent of our operations are managed through sea freight, 40 percent with air freight and the remaining 20 percent is divided between road freight and intermodal services. We have enough in road, rail, sea and air transportation and we also offer sequencing and distribution solutions. Now, we are trying to bring all that knowledge to Mexico and work directly with several OEMs in the country.
PZ: Having developed our sea and air freight services, it is time to bring our warehousing and distribution operations to Mexico. Challenges regarding local infrastructure make these services crucial for clients to remain competitive. We are analyzing how our clients’ distribution centers are spread across the country and based on that, we are creating the best solutions for the company together with the heads of our sea and air transportation departments and Honorio Rodríguez. This helps us minimize waste in the supply chain, which is where we see the biggest opportunity in the Mexican network.
Q: What do you see as the main obstacles for Mexico to grow as a logistics hub?
PZ: Road and rail infrastructure are reaching their peak. Meanwhile, sea and air transport providers are not normally aligned to the needs of the market, causing situations of over or under-capacity that have to be addressed. Ports and customs offices are also critical factors that cannot be overlooked. Mexican ports are among the most expensive in the world. All customs offices have different points of view and bureaucracy is increasing costs radically. The only way for Mexico to compete with other logistics hubs is to integrate customs agencies into the supply chain.
Investment in logistics infrastructure and human capital development is vital for Mexico’s growth. Talent will be Mexico’s tool to compete with more advanced economies and companies can contribute by helping young people reach their full potential.
Q: How have Hellmann’s operations in Mexico impacted your client-attraction strategies?
HR: We are selective with our clients because we think we can offer a better service if we remain specialized. Many of our existing contracts have been sealed thanks to referrals from our existing network.
PZ: As a family company, we are flexible enough to transform our operations locally and globally. We react quickly, which has proven to be a clear advantage. But not all companies match Hellmann’s philosophy and just as we choose our providers, we choose which companies we can cater to. The only way to have a healthy client portfolio is to have a mixture of big, medium and small clients. Moreover, clients that move one container per month are just as important as those moving 100 containers in that same period. Rather than just numbers, clients are faces that we recognize each day.
Q: How is Hellmann innovating in technology?
HR: Our real-time, end-to-end cargo monitoring system for sea, air and road transportation, Hellmann Smart Visibility, is gaining ground in the market thanks to its security advantages. We have also created a variation on this platform called Sky Angel, which connects cargo directly with the police force. The original platform allowed clients to know where the cargo was and how the operator was performing. This new version sends an alert to authorities, shortening the time of response in case of any eventuality and increasing the recovery rate of stolen containers.
The original Smart Visibility add-on is a growing technology advantage and we keep working to improve it. Customs cannot release the system as part of the cargo, representing added costs for clients. This has forced us to limit this solution to the export market. With Sky Angel, however, we have had more success in national freight. The biggest security risks are in the last stretch of the cargo’s journey. We presented this product in 2017 and are gradually overcoming the fact that prevention culture is not that common in Mexico.
Q: How do you see developments in the relationship between Mexico and the US impacting logistics operations?
HR: Due to our German origins, our biggest market opportunity is in logistics operations from Europe, Asia and South America. But what we have seen from the US-Mexico relationship was more fear and uncertainty than an actual negative impact to general operations. Companies also have many markets to develop other than the US. Although the US remains one of Mexico’s biggest clients, companies are taking advantage of Mexico’s other trade relationships. The only clients that remain more cautious are those that supply predominantly to OEMs in the US.