Antonio Vargas
CEO
Mexproud Shipping
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View from the Top

To Guanajuato and Beyond

Fri, 09/01/2017 - 12:15

Q: What is the company’s approach to the automotive industry as one of the few Mexican players in the freightforwarder business?

A: We do not work with OEMs directly. We work with auto parts suppliers, handling their imports and container shipments. However, given the growth in light vehicle production of recent years, we are exploring the opportunity to become a partner for automakers. We are already looking into acquiring car-hauling trucks and we expect to enter this business presently.

The automotive industry currently represents 9 percent of the company’s total revenue. Our growth in the sector is parallel to the growth in Mexican exports to the rest of the world. During the first half of 2017, the industry registered an increase of 14 percent in the number of light vehicles exported. Meanwhile, our business grew 16 percent in comparison with the figures from 2016.

Q: What added value can you offer automotive companies that would make them choose Mexproud Shipping over international competitors?

A: We operate according to the just-in-time philosophy implemented by Toyota and other industry leaders. Our goal is to always deliver components on time to our customers. This is a common standard among logistics players but the added value we deliver is our close relationship with ports and customs agencies. This helps us solve any problem and avoid delays at the docks or during customs checks. Many of our volumes come from Asia, which means most enter through the Lazaro Cardenas and Manzanillo ports. We have a direct relationship with local authorities and we do not have any problems in any part of the process during cargo transportation. Our operations are based on service, rather than cost. If companies want to find the cheapest way to ship their cargo, the most effective way is to contact carriers directly. However, we can offer them the guidance to avoid any problems during the import and export process, which is also why we are not focused only in one industry. That being said, we see considerable business opportunities in the automotive sector, which is why we opened new offices in Leon to target automotive companies directly.

Q: What do you see as the main obstacle that could hinder your growth and operations in Mexico?

A: The federal government has invested heavily in logistics infrastructure. An example of this is the port of Veracruz and the specialized automotive terminal in Lazaro Cardenas, a port with booming operations. Security was once the big concern in Michoacan — where Lazaro Cardenas is located and where most of our operations are — but the government has worked to make sure clients know there are much fewer criminal incidences in the area.

However, there are still areas requiring improvement and to this day it has been a challenge to deal with the low capacity of the existing infrastructure. Authorities should continue making infrastructure a priority, especially considering the projected growth in automotive exports. This industry is based on timely deliveries that ensure proper just-in-time operations. Delaying shipments even by just a few hours can lead to negative effects for the entire supply chain.

Q: How important will the automotive industry be in the company’s growth strategy and what new projects are you planning to start?

A: Overall, our plan is to grow 30 percent in 2017 and the early figures for the first half of the year show we are on track to reach our goals. Growth in the automotive sector will certainly boost our numbers but we are also relying on increasing our operations in other industries. Our offices in Leon will also help us attract more business in the Bajio region and our midterm goal is to grow our footprint outside Mexico. We opened a branch in Beijing in July 2017 because we see great opportunities to attack this market and take advantage of the commercial relationship between Mexico and China.