Adopting the "Made in Mexico" Approach to LogisticsMon, 09/01/2014 - 12:52
Q: How is Hellmann positioning itself to take advantage of increasing investment in the Mexican automotive industry?
A: We have a dedicated automotive team of 45 people spread across our seven branches that take care of our automotive clients and their needs. Our client base consists mostly of suppliers like Grupo Bocar, Johnson Controls, Federal Mogul, Continental Automotive, Mann+Hummel, Benteler, and ThyssenKrupp. We develop relationships with our clients locally but we apply our expertise globally. The reason we focus on Tier 1 and 2 companies is that the profit margins are much higher than with OEMs. We still work with Nissan and MAN Truck & Bus in Queretaro, but these are smaller operations.
Q: How do you distinguish yourself from other international logistics conglomerates in the Mexican market?
A: The main difference between Hellmann and other freight forwarding companies is that we are a familyowned company with a local philosophy. We entered Mexico in 2001 through a joint venture with a customs broker and have developed our expertise in the Mexican market over 13 years. We have discovered that when you operate in a region like Latin America, business must be very personalized. To maintain that personalized approach, human resources are crucial. The best company with the best procedures in place is bound to fail if it does not have the right human resources; therefore Hellmann makes sure to maintain a low turnover rate. We also keep the numbers of international staff very low, whereas other companies bring international people into key positions. For 2014, in collaboration with our global HR team, we are implementing a new program that will enable our workers to go abroad to our branches in the US, Germany, and Hong Kong. We offer our workers the right motivations in the middle and long-term; this has led Hellmann’s operations in the Americas to have the lowest turnover rate.
Q: To what extent is Hellmann focusing more on the Mexican market rather than on international freight?
A: We are certainly identifying a shift in the automotive industry’s manufacturing strategies as factories begin to move from Asia to Mexico. This will not be noticeable in the short term but it will gain momentum over the next five to six years. My personal perception is that there will be a drop in volume of automotive parts coming from China. At the same time, there will be an increase of raw materials coming from other parts of Asia, and the European market will remain stable.
Q: Potential logistics bottlenecks are a real concern for the automotive industry. How are you helping your clients through this dilemma?
A: The lack of infrastructure is a great problem for our customers. From the early stages, we work with our customers on the strategic decisions that determine the location of their plants. Mexico’s infrastructure is underdeveloped, and it will take at least 15-20 years to reach the level where Europe and the US are today. We prepare our customers by making them aware of the situation. We bring all of our automotive clients together every two years in workshops where they can exchange ideas and best practices. During these workshops, we present them with the current status of Mexican infrastructure and our predictions on the development of the industry within the country from an international perspective. This campaign has been fruitful; it has led to our clients adopting various development strategies after frank and open discussions.
Q: Automotive clusters are trying to simplify customs procedures by installing FTZs, or having US customs processes done inside the parks. To what extent is this strategy plausible?
A: The Bajio region has more potential for this process, as the customs office and the state governments are more flexible there. The governments are actively trying to attract companies and make the location more attractive for investment. This simplified process can only be possible if the reforms are successful and give the forwarder more rights and flexibility in the customs procedures. The only inflexible part of the Mexican supply chain is the customs process. For Mexico to be more competitive, it needs to work on its infrastructure and optimize the customs processes. The procedure is currently the same for transportation by sea or by air. Every permit requires a customs broker.