José Luis García
Vice President of Operations AEMCE
DHL Supply Chain Mexico
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View from the Top

Global Logistics Provider Bolstering Mexico´s Talent Pool

Tue, 09/01/2015 - 12:14

Q: What have been DHL’s most significant additions to its automotive offering over the past year?

A: We have incremented our assembly operations beyond minor components. Now, we are assembling parts that require specific dies and tools that need to be calibrated periodically, bringing us closer to the combination of being a 3PL and a Tier 1 supplier. This has propelled us toward improving our quality system, and now, beyond having some of our operations ISO 9001 certified, we are looking into further certifications such as TS16949. We can assemble interior components like the dashboard and the instruments panel, and exterior parts like components of truck cabins, for example. We have also evolved our service portfolio beyond sequencing to include a metering system, enabling the delivery of parts on fully loaded pallets. That makes the external operations of the plant less complicated, resulting in a smaller necessary workforce and the ability to break up full pallets in-plant, lessening their distance from the assembly points.

Q: How did a logistics company find the appropriate human capital to move into that field?

A: We are at a crucial point in terms of talent in Mexico. We have a significant abundance given that we have such a young average population, but proper logistics education is a challenge due to a lack of sufficient academic programs and apprenticeships. Mexico has to set an objective not just to have millions of engineers and technicians, but to make sure they are well-trained in specific areas, particularly logistics. The logistics sector needs to find people that have financial experience, management skills, and leadership abilities. In terms of maintenance, tooling, and fleet management, Mexico needs proper technicians. The country is already working on that, with a four-year graduate program for engineers, and two-year programs for technicians. These programs are effective, creating highly talented technicians after only two years in college.

Q: What kind of challenges does DHL face when trying to access the US market from Mexico?

A: The main challenge at this point is increasing our rail freight capabilities. Mexico has two rail companies in Mexico that need to invest more, given the current limited capacity of the country. On the other hand, these companies expect to have clearer rules from the government on how the rail business is going to progress. Right now, 85% of Mexico’s freight goes via road, which will be unsustainable for the future. For that reason, we need to develop more intermodal systems, even for domestic shipments. Road freight will continue to be very important and investment should continue there. As for air freight, the challenge is that most international freight goes through airports in the Bajio region, Mexico City, Guadalajara, and Monterrey. We need to diversify the shipments between all 89 airports because 30 of them are international, but they are not used for freight.

Q: What are the limitations for fleet ownership in Mexico, and is DHL affected by the restrictions?

A: There is a limitation of gross weight for foreign capital companies, which is about five tonnes per truck. This means we are allowed to have our own fleet for express deliveries, but above that gross weight we need to subcontract other companies, and that represents a potential problem in terms of quality and availability. In Mexico, the average truck is 17 to 19 years old. Around 80% of those trucks belong to really small companies, and normally they do not have proper procedures or quality standards. Signing a contract with these companies is different from working with bigger companies, since they do not have the capacity to respond easily to claims, and prices may vary greatly depending on the quality of the service and the equipment. Having the support of a company like DHL provides a guarantee to our customers that environmental, legal and safety regulations will be complied with.