Erik Meade
Country Managing Director Mexico
Panalpina
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View from the Top

The Secret to Success? A Boeing 747

Fri, 12/01/2017 - 15:19

Q: What role does Mexico play in Panalpina’s global strategy?

A: Mexico is a main market for Panalpina in the Americas, even ahead of Canada and Brazil. Our local operation is one of the biggest in the company’s international network and Mexico is ranked among the top 10 countries in terms of importance. In the local market, IATA in Mexico positions us as the second most important company and when we add our charter operations, we come up as the biggest forwarder in terms of air freight volume in the country. We are banking on development within the aftermarket but the Tier 1 and Tier 2 segments offer the biggest growth opportunities for Panalpina.

Q: What advantages can Panalpina offer over other international players in the logistics sector?

A: Panalpina offers a service that no other logistics company can provide in the Mexican market. We control a Boeing 747-8 that travels twice a week to Mexico City after departing from Stansted, UK and passing through Luxembourg and Huntsville, Alabama. The plane has 140 tons of cargo capacity, is environmentally friendly and can be configured to accommodate our clients’ space and volume needs.

With a layover in Huntsville, we are the only company that can target the entire US Midwest. Panalpina chose to control this route and use secondary airports to offer its clients more flexibility, instead of larger cities with saturated airports. This flight is part of the Panalpina Charter Network, which offers an efficient cargo solution controlled by our customers’ needs at similar prices to what other carriers might offer.

We have the added advantage of acting as both a forwarder and carrier. Managing our own plane allows us to compete with airlines and carriers, while our remaining services match those of international logistics players. We manage 70 percent of our operational capacity as forwarders and we negotiate with the same airlines in the same way as other forwarders in the market. But we can offer our clients an additional 30 percent cargo capacity that no other player can provide. When airports are saturated, we still offer the possibility of moving that 30 percent.

Q: What other benefits does having the Boeing 747-8 provide?

A: Companies may experience several incidents during the manufacturing process and this plane allows us to address our clients’ emergencies so they can avoid any production stops. With this aircraft, we do not have to depend on other airlines nor do we have to compete with other forwarders for cargo space. Our Boeing 747-8 has been attractive for both imports and exports. Our clients enjoy the flexibility we offer.

Q: Aside from its added value in air freight, what can Panalpina offer to clients?

A: On top of our air freight and charter services, we also offer buyer's consolidation services and maritime logistics. Our buyer's consolidation service is for companies that have a supplier network distributed across Europe and Asia. We manage shipments from different countries and consolidate them into one big shipment to avoid extra costs for the client. Panalpina also offers consolidated logistics services including warehousing, distribution, packing, order picking and an overall end-to-end logistics chain.

Q: What areas of opportunity do you see in Mexico’s logistics infrastructure?

A: A future advantage we see is the availability of a new and larger airport in Mexico City. Saturation at the current airport is a serious problem for us because the airport prioritizes passengers over cargo. The government should incentivize the construction of more airports throughout the country, mostly because the issue directly relates to Mexico’s competitiveness. The Bajio region is growing but some locations would benefit greatly from better air connectivity. This could boost supply chain development and minimize added logistics costs.