French Giant Seeks Growth in MexicoFri, 09/01/2017 - 11:40
Q: How is GEFCO positioned in the Mexican market?
A: We are in a transitional process. The company is growing and establishing relationships with other businesses. Every company starts with someone and our first partnership was with Peugeot. From there, we grew our presence and approached other companies worldwide. We can offer automotive companies every service they need to grow their operations, including vehicle transport, internal logistics and auto part shipments for the aftermarket. We endeavor to improve our portfolio in a local way, supported by our global experience. Most of our competitors are specialized either in inbound or outbound operations. Our advantage is that we can do both. Our participation in Mexico is expanding and on average, we are growing our revenue by 30-35 percent each year. We are still a small player in the country but we are getting stronger.
Q: Your solutions are handled by a control tower that coordinates GEFCO’s entire supply chain. How does that work in Mexico?
A: The control tower is located in Paris and works with Mexico to coordinate the work with Peugeot Argentina and Brazil. This tower coordinates auto part shipments to Peugeot’s facilities in these countries. These operations combine many types of transportation to reach their destinations. Sometimes we combine ground transportation with storage, sea containers, customs services and whatever our customer needs. Our control tower is in charge of measuring all distances, estimated arrival times and costs, so we can align all operations to the client’s budget. The experience we have in the automotive industry has also helped us expand to other sectors, working together with our customers to continuously improve.
Q: What hurdles have you identified to improving logistics operations in Mexico?
A: The logistics market in Mexico is big and has great potential. However, we need more investment from the government in better and safer infrastructure. In theory, this is not the responsibility of the logistics companies but we are the ones that suffer due to bad road conditions. Even when we have the technology, the infrastructure can make logistics operations go wrong. This keeps us from improving our quality and satisfying the demands of our customers. The public and private sectors must work together to solve infrastructure issues and put new projects in motion as soon as possible.
Q: What environmental strategies is GEFCO implementing in its operations?
A: We have two long-term projects with other companies to build reverse logistics services. However, to make this viable for the market, we need the participation of companies willing to share their packaging. We must also establish a solid network with recognized routes to make our transportation operations efficient. Furthermore, we need to understand if our clients use cardboard, plastic or pallets and how they usually transport their products. Without that information, we would only waste resources. This service is still incipient in Mexico because there are few clients willing to participate.
Another element of our environmental strategy is to keep trucks in the best possible condition. As soon as we grow our customer base, we will be able to do more in the sustainability area. I expect to see electric heavy-duty trucks in the future. Electric cars are already here, which is why I think it is part of our responsibility to innovate with these kinds of solutions.
Q: What are your growth expectations for 2017 and how does innovation impact your planning?
A: Our expectation is to maintain 35 percent growth, just like in previous years. We are always looking to reduce our costs. We know that logistics costs are a key part of supplychain development, so we must be creative enough to keep our prices competitive by introducing new technologies. Online operations are growing, for example, which means we need to adapt to new e-commerce strategies and learn to compete in new markets. The automotive sector is always evolving and we need to keep up with our clients’ growth.