Considerations Driving Fleet Purchasing Decisions

Logistics service providers play dual roles in the growth of the industry. While being tightly connected to the supply chain through the supply of distribution and logistics services, they are also prized customers for the OEMs, amassing fleets that require regular renewal. “Estafeta is a partner that is fully integrated across the industry’s entire logistics chain while having a fleet of over 2,500 vehicles that is renewed every five years,” explains Ricardo Becerril, National Director of Operations for Estafeta Mexicana. As a fully Mexican company operating within a vast network, Estafeta has had to adapt to the internationalized conditions of the Mexican market, starting with its fleets. “We have close ties with the OEMs, and we work alongside them in the design process of our fleets,” explains Becerril. “We also have close ties with the body builders and main suppliers of parts.” When choosing a new brand, Estafeta has strict criteria that OEMs must comply with. “Principally, we verify that the producer has the flexibility to design our vehicles according to our specifications,” Becerril comments. “There must always be a lot of interaction and customer service. Spare parts are important to us because while we have our own certified workshops, we must have full coverage in order to ensure efficient operations.” OEMs benefit from close ties with fleet owners such as Estafeta, as they can trial products for the wider market. “We are trying out natural gas units with Mercedes-Benz and we will measure their durability, maintenance, cost efficiency, and performance,” states Becerril.

Flexibility is a critical component in Estafeta’s fleet purchasing and management strategies. “Estafeta’s cargo is based on volume and not weight, and our containers are specifically designed to have the maximum volumetric capacity,” says Becerril. This means that more cargo can fit into one shipment and according to Becerril, this specification offers 30% more efficiency in capacity than any other vehicular format, enabling companies to save on fuel and mileage. The Estafeta fleet has patented containers that have been specifically designed for the company’s operations. “Our containers are not attached to the chassis, which means we can exchange containers that are full with empty ones so there is no time wasted between deliveries,” Becerril describes. “Conventional truck designs would need three trucks, but our designs allow us to only need two.” To acquire these low-bed containers with special configurations, the company must go directly to the body builders. While other companies are increasingly opting for leasing, Estafeta only leases 30% of its containers. “We maintain this small percentage because leasing companies do not have flexibility in terms of container styles. Therefore, our policy continues to be direct acquisition,” Becerril maintains.

Estafeta’s product offering is located where the roles of service providers and automotive clients intersect. “LTL is a new product tailored to the needs of the automotive industry and it entails the consolidation of cargo,” Becerril clarifies. “LTL is for urgent, next-day delivery of parts that arrive either to a distributor, specialized workshop, or retail shop.” Becerril is keen to point out that this particular service is fully integrated in the supply chain from manufacturing to the aftermarket. LTL involves the consolidation of shipments of different sizes and characteristics into a single container for a single destination. According to Becerril, other logistics providers wait for trucks to be completely full before sending them to their destination, while Estafeta’s trucks depart regardless of whether they are at full capacity or not. This strategy would seem to translate to high fuel costs and inefficient operations, but Estafeta points to the brand variety within its fleet as enabling it to keep costs steady. “We focus on several OEM brands: we have two brands for trucks, two for box trucks, and two for vans.” Depending on the demand for a certain destination, the company defines the vehicular format to be utilized. “If there is sufficient quantity to fill up a truck hauling two trailers, it is sent. If not, then a single carrier is chosen and so on,” Becerril tells. Closely designing the routes and logistics not only increases fuel and operational efficiency, but the characteristics of the fleet itself enable the company to offer accessible solutions and flexibility in its product portfolio.

The company continues to overcome hurdles in its growth trajectory, as despite the adverse economic conditions of 2013, it grew by 6% nationwide and by double digits in certain regions. The new obstacle looming on the horizon is the future restriction on trucks hauling two trailers. “The use of two trailers has some operational cost benefits,” Becerril admits. “Their prohibition would be a terrible blow for transportation and logistics companies.” He believes such a ban would also cause costs to go up exponentially and the environment would suffer. “It will damage the sustainable practices of the company and of the entire supply chain,” he disputes. The ban is attributed to the lack of regulation in the transportation sector. “The sector is unregulated. The fault lies with informal companies that go beyond weight, speed, and dimension limits. Even worse, their vehicles are in terrible condition,” he opines. “However, Estafeta makes sure that when our units have travelled beyond 1 million km, they are swiftly replaced with vehicles containing engines that meet the latest norms dictated by the government.” Estafeta expects that, through its tailored product portfolio, it will grow by 11.5% in 2014, reaching net profits of US$33.8 million. US$6 million would then immediately be re-allocated to the renovation and expansion of Estafeta’s fleet.