Communicating Automotive Benefits of Mexico´s Logistics

Q: What have been AMTI’s greatest contributions to the development of intermodal services in Mexico?

A: AMTI was founded in 1999 because of the importance of intermodal growth in Mexico during that time. Back then, due to the growth of the automotive industry, the decision was made to create a specialized intermodal terminal called Pantaco. The first company to transport containers using intermodal services in Mexico was Chrysler in 1990, assisted by APL logistics. By 1999, other active players in the industry decided to create AMTI in order to have one voice for negotiating with government authorities, customs, and the railroad industry. Over the last 15 years, the intermodal transportation industry in Mexico has been growing between 14-18% every year. This was originally focused on the NAFTA corridors, but before long intermodal transportation began to grow in the arena of privatized imports, mainly at the ports of Manzanillo, Lazaro Cardenas, and the Port of Veracruz. Right now, specifically at Lazaro Cardenas, at least 65% of the port’s containers are moved through intermodal techniques. In Manzanillo this is only around 20-21%, mainly because of the lack of infrastructure, and in Veracruz the percentage is only around 9%.

Q: How does AMTI support logistics companies trying to align themselves with the sector’s dynamism?

A: In terms of what Mexico can offer, there have been more and more industrial parks and free-trade zones working with customs services every year. With those in place, the suppliers used by auto parts manufacturers can handle the merchandise on their behalf, which will improve the supply chain. In those free-trade zones, you bring in a shipment without paying any tax, you can perform all the necessary inventory control, and when the industry requires one specific part, these suppliers can provide it quickly and efficiently.

AMTI has been trying to develop much smoother, singular services with customs at road borders. We have prepared an inbound customs document called a Transit Internal to simplify the process of bringing goods into the country’s internal terminals, changing the way that the whole process is approached. Since NAFTA was established, some importers think that the process of importing broad freight is simple, so they need a better understanding of what they have to implement, after which it becomes much easier to do business with them. Comparatively, intermodal requires a little more communication and preparation. When comparing the transit times and the ease of business between the two modes of transportation, then road is much more preferable. Now, there are specialized companies that offer door-to-door delivery for practically every requirement in the supply chain, helping manufacturers and suppliers to meet their logistic needs and provide a singular invoice for the combination of the services.

Q: To what extent are AMTI and other associations lobbying the government to prioritize railroad infrastructure and help intermodal logistics to grow?

A: Right now, we are having a discussion within the association because there is an opinion that all the investment needs to be made by the railroad companies. These kinds of investments need to be made by the government because railroad companies will unlikely see a return given that the concession for the railroads last for 30 years. The country requires this, so the government must step up. The problem is that we see an absence of authorities in terms of the railroad industry. The Railroad Reform that took place in December 2014 states that the government will create a new railroad agency; so many things should then start to change.

Q: When automotive companies are trying to decide on the best intermodal logistics, how much do these companies consult with AMTI?

A: We have a lot of talent within this association, which now represents almost 50 companies with significant human expertise. These companies operate within the railroads and intermodal terminals, and are made up of consultants, customs brokers, IMC companies, carriers, and Mexican transportation companies, of which we are focusing on trying to involve more this year. The big transportation companies are road-based, but we really need the intervention of these specialized carriers in order for them to understand that intermodal services are quite different to those provided on the road. Their customers are not the beneficial owners; their customers are the carriers.