Customer-Oriented Services a MustBy Alejandro Salas | Mon, 07/13/2020 - 05:00
The highly demanding needs of the automotive industry combined with the presence of numerous world-class logistics companies have spurred a competitive environment where customer-oriented services have become a must. “Automotive companies no longer just demand JIT logistics but also high levels of service and extensive shipment visibility,” says Arturo Olvera, Director of Business Development and Marketing Central America at CEVA Logistics.
Understanding the customer’s needs and responding appropriately are two key ingredients that guarantee success. “We are aware that the automotive industry is very demanding in terms of requirements and delivery times because a logistics issue can result in the delay or stoppage of production. A logistics mistake can make automotive companies lose millions of dollars in a short time,” says Artur Bezerra, President of ONE México.
While the ability to comply with JIT logistics was once a key differentiator, Olvera believes that logistics companies need to focus on different aspects of the delivery process to generate added value for clients and develop long-term relationships. “We prefer to manage all steps of our clients’ supply chains, from raw material sourcing to delivery, rather than handling only particular services like transportation or customs processes.” For Eduardo Aspero, Vice President and Senior Director General of Hub Group, there is a great opportunity in Mexico to shift the transportation industry’s mindset from a transactional, capacity-focused operation to a more strategic, holistic solution. “These integrated services help provide better visibility and assign solutions that can mature over time, offering consistency that is more carrier-friendly,” says Aspero.
Managing the entire supply chain allows for more visibility and larger control of the logistics process, which is why several logistics companies offer this option, often including sea and air freight. “Our sister company MCL handles airborne and seaborne cargo to complement our land-based operations. This allows us to offer an integral service from Canada to Panama. Moreover, we can handle all steps for auto parts logistics, from the import of raw materials to the handling of the final product and then its shipment to North and Central America,” says César Ventura, Commercial Director of Interland Transport.
In addition to the small adequation services that logistics companies can offer, innovation and the implementation of technology are significant opportunities to cater to companies’ needs and provide higher quality. According to a PwC study, Shifting Patterns: The Future of the Logistics Industry, technology is an important avenue to improve the logistics industry’s progress. From data analytics to automation, technology promises reduced expenses, enhanced effectiveness and opportunities for players to make a real breakthrough in how the sector operates.
The bet on innovation in logistics processes is necessary to develop long-term relationships with clients in the automotive industry, says Olvera. He adds that a common mistake of logistics operators is to overcommit their services and promise more than can be delivered. He explains that automotive companies demand high levels of service and constantly require their logistics suppliers to increase the effectiveness and efficiency of logistics operations, so it is important to commit only to what can be delivered. “We need to obtain more cost-savings, avoid additional costs and increase productivity to boost our clients’ operations,” says Olvera.
Reducing the carbon footprint of companies’ embarkments also represents an opportunity for logistics companies to stand out and create customer-oriented services, with strategies that range from intermodal conversion to improving reverse logistics processes. “Intermodal conversion is at the heart of our sustainability initiative due to its meaningful carbon dioxide reductions,” says Aspero. However, Olvera says that reverse logistics services are not as advanced in Mexico as in other countries because of the country’s constrained transportation infrastructure. “Reverse logistics are key to increasing the efficiency of shipments and keeping logistics costs at bay,” he says.
Either through stepping up in the JIT processes, offering full visibility of the cargo or offering specialized-product delivery, logistic companies have adapted their offering to stand out in the Mexican market. “Mexico is a connected country and its industries, such as automotive, require logistics operators that can transport from anywhere to anywhere. Adaptability is a key differentiator,” says Bezerra.