Exponential Growth for Logistics DivisionThu, 09/01/2016 - 12:09
Q: How is FEMSA developing its logistics division and how is that helping the company’s overall operations?
A: FEMSA’s logistics division has grown exponentially, which is extremely important for the company’s overall operations. In 2015 we acquired two logistics companies. ZIMAG is a Mexican entity with over 36 years of experience in warehouse, distribution and logistics. Atlas Transporte e Logistica in Brazil has over 60 years of experience in handling and product distribution. The integration of both companies has been a success and we are excited about the future. It is our responsibility to serve their clients with the same level of quality and determination we give our own. These companies will bring a whole new level of specialization to complement our operations, making us a stronger logistics company. We are expecting growth in Colombia, another major market for us. Peru, Brazil and Mexico are the most important markets for FEMSA Logística and although Brazil is experiencing a difficult economic environment we believe the tide will change in the short term.
Q: How has FEMSA Logística improved its maintenance operations?
A: This is a fundamental business area that is only operational in Mexico, although we will soon expand to Colombia. If companies are not willing to outsource their logistics processes, we can still offer fleet maintenance. We developed a broad network of maintenance shops across the country with standardized processes and we service over 35,000 vehicles. Given that Colombia’s market is similar to Mexico, we expect many opportunities there. FEMSA Logística will open its Mecánica Tek division in Colombia in 2016.
Q: In what ways has FEMSA Logística worked on its environmental strategy?
A: FEMSA Logística has its own sustainability report, making us pioneers in Mexico since not every company does this. Our standards follow the G4 of the Global Reporting Initiative methodology. We are committed to improving the environment. Our sustainability report has improved over the years and so have our internal practices. FEMSA is now being certified by Lloyd’s Register Quality Assurance (LRQA). We understand the importance of due diligence not only as FEMSA Logística but the company as a whole.
From an environmental standpoint FEMSA Logística is focused on vehicle emissions. We are constantly stressing the importance of using better equipment and the right combination of technology in our trucks. We perform maintenance on our trucks on a regular basis, improving their efficiency while reducing their impact on the environment. We have our own sustainable mobility program, which implements enhanced technological developments in the company’s vehicles. The evaluation is not only done from a cost-effective standpoint but also takes into consideration the effectiveness of clean energy. When FEMSA Logística can prove newer technologies such as electric vehicles can be used efficiently, we will bring them into our operations. We are evaluating the viability of implementing electric vehicles in our light vehicle fleet but Class 8 trucks might still take a while to include these advances. Double trucks need too many batteries, meaning we would lose our efficiency. We have evaluated different alternatives, such as natural gas. FEMSA Logística has already tested vehicles that use a mix of diesel and natural gas. Our initial tests have been extremely favorable. For small distribution trucks, hybrid and electric vehicles seem to be the best alternative.
Q: How does FEMSA Logística sytematically renovate its distribution fleet?
A: FEMSA Logística systematically evaluates the total cost of ownership of all its units. If we can retain our vehicles for a long time, we do. This is a natural way of doing business. Nobody wants to invest more than needed, especially if the equipment is still reliable and functional. Safety, lawfulness and productivity must be kept in mind at all times. All in all, it comes down to fuel efficiency, maintenance costs, vehicle costs and productivity. These variables are always there they shift constantly, which forces us to keep a close eye on market trends. Of course, the ideal scenario would be to renew our fleet every year but this is not economically feasible.