Rudolf Hess
President and CEO
R.H. Shipping
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View from the Top

Bringing Mexico and the World Closer

Thu, 09/01/2016 - 11:01

Q: What advantages does R.H. Shipping offer to the automotive industry?

A: This sector’s unique characteristic is that everything has to be delivered punctually. The automotive industry does not normally stock large inventories because spare parts are expensive. If the production line stops, the company will incur stratospheric costs. The complete product offering we present to our clients includes management of air, sea, land and rail freight, as well as hand-carrier operations where our people deliver components personally to the client. We also offer customs support services and insurance consultancy if the cargo is lost or suffers any damage. We manage transportation operations for Volkswagen, which is a demanding client in terms of quality and efficiency, and we believe our product portfolio will help us increase our presence among automotive clients. Our rail presence is particularly strong since R.H. Shipping transports approximately 40,000 containers from Asia every year and 90 percent are sent by rail to Guadalajara, Mexico City and Monterrey.

Q: How important is the sector to your business and what is your strategy for the industry?

A: It has been a crucial sector for us and our goal is to increase our list of automotive clients. We want to increase revenues from this industry tenfold. For this, our sales strategy is focused on automotive companies through our offices in Queretaro and Leon, Guanajuato. We are strengthening our operations in Leon and considering opening new offices in Aguascalientes and San Luis Potosi. We also have an office in Monterrey to target the north of the country and the US and we are expanding our workforce in that region. The company just hired a new branch manager for this office to develop the northern and northeastern part of the country.

Q: What do you need to do to cultivate your participation in the sector?

A: We need to improve our workforce in the Bajio region, which is a challenge the whole industry faces. We also need to plan how to compete with international companies that offer the same services at much lower costs. We do not have unlimited funds to subsidize our operations but we can deliver much more personalized services at a fair price. Clients often need to deal with dozens of people in international corporations. R.H. Shipping’s customers have direct contact with their sales representative and the person in charge of their operations. Unfortunately, many companies give their business to the cheapest company in the market or they prefer a global company capable of backing up its operations in case of any mistake. We offer that same assurance to the client, but we cannot subsidize our rates. For now, we will focus on individual businesses but we will eventually start to participate in large automotive tenders.

Q: How is R.H. Shipping making its operations more costeffective?

A: We are establishing closer relationships with air carriers in Europe and Asia and we are already working with the most important agencies specialized in air freight. For export operations, we have also built strong bonds with local and international air carriers thanks to our membership with the International Air Transport Association (IATA). This entity regulates all airfreight operations and payment collections on behalf of airlines. In 2014, the association ranked us eighth among other freight forwarders in the market, all of whom were global players. In January 2016, we reached third place and one month later second place, just behind Kuehne + Nagel. We have a strong position in terms of exports and that gives us excellent bargaining power with all airlines to reduce costs.

Q: How does R.H. Shipping divide its business areas?

A: Approximately 50 percent of our revenue comes from imports from China and Asia, via both air and ocean freight. This includes products from the electronics, oil and gas, automotive, consumer goods and general manufacturing sectors. Ten percent of our operations focus on domestic and international land logistics. We have an office in Houston that focuses on oil and gas freight, as well as cross-border business. Around 20 percent of our business comes from European companies and the remainder comes from South America. This makes our operations in Mexico key to our development.