FedEx Packages Strategy for New Entrants

With its multiple free trade agreements (FTAs), including the Trans-Pacific Partnership (TPP) deal, Mexico has an open door for auto parts manufacturers looking for a new production or distribution site. A booming automotive industry and a prime location at the doorstep of the US add to its advantages. The auto parts market is valued at approximately US$85.5 billion, according to Óscar Albin, Executive President of INA. US$65 billion of this production is exported to other markets and 90 percent lands in the US. For logistics companies there is a clear opportunity to target all levels of the production chain. FedEx is among those, as it looks to tap partners among the latest entrants to the market. “The company is taking advantage of its global contracts and agreements to target all new companies in Mexico, aligning cross-border team efforts,” says Jorge Torres, President of FedEx Express Mexico. “We do information distribution. From the first flashes of an idea to the ultimate design of a product, we offer key solutions to all our automotive clients.”

Just-in-Time operations are crucial for maintaining the profitability of all manufacturing operations. Nissan’s plants in Aguascalientes, for example, deliver a finished vehicle every 37 seconds, according to the Japanese auto maker. This means that losing even a minute could cost thousands of dollars for the company, Torres says. “With that in mind, FedEx has developed solutions designed to accelerate the supply chain. The company has significant experience in the auto parts sector and has specialized solutions for urgent deliveries. We also have service shops in major cities, so all maintenance on FedEx vehicles can be organized around a clients’ schedule.”

FedEx has worked intensively to translate its experience, flexibility and adaptability to its services, allowing clients to develop tailor-made logistics solutions. “Innovation is a strong suit for the company,” Torres says. “It is focused on creating cargo consolidation services, personalized customer attention and support for paperwork for all imports and exports.” SenseAware, one of its products, is an information and tracking system that monitors the status of every shipment and sends an alert for any critical event.

As the industry evolves, so do commercial agreements between economies. The TPP is the perfect example of how new relationships will impact exports and imports, pushing companies like FedEx to innovate and improve their operations. “The agreement specifies customs releases of express deliveries must be ready within six hours,” explains Torres. “This will help our clients put their products in the hands of their customers much faster, leading to an overall increase in competitiveness.” The agreement will amplify opportunities for service providers such as FedEx to operate abroad and has new dispositions that will help ensure the correct operation of the TPP region’s supply chain.

With growth, however, come new challenges. Sustainability practices have impacted the production chain, including logistics. To address these issues, the company created the Mobility and Accessibility Program (MAP) in collaboration with EMBARQ. “MAP is a corporate social responsibility model based on shared values and the commitment of high-quality employees,” says Torres. “It takes advantage of FedEx’s expertise in vehicle management, telematics, fuels and automotive technology, branding and marketing, as well as driver safety to create mobility and accessibility in the least harmful way to the environment.”