Logistics Provide Plays It Smart Through Multi-TaskingMon, 09/01/2014 - 12:54
According to Gilles Cudia, General Manager of GEFCO México, his company’s entrance to the market might have seemed late, but it arrived at the right time to claim an important share of the logistics market. “Before we came here, we carried out market studies and concluded that it was safe for us to enter Mexico. The logistics of the automotive industry are very complex and more global than any other industry, so being in Mexico has opened many opportunities for us,” assures Cudia. GEFCO has a presence in 37 countries and offers five main activities: inland transport, overseas transport, customs, finished vehicle logistics (FVL), and warehousing. GEFCO estimates that it will be carrying out the whole of its operations by the beginning of 2015, just two years after starting its Mexican activities in May 2013.
GEFCO provides added value through customization, postproduction operations, and pre-delivery inspections that are done to ensure that there are no problems with the cars. “When a country is as big as Mexico, logistics must be thoroughly organized before they are implemented. We have done this through a range of studies to help us look for an angle to enter the market. Many competitors are already here, such as those from Europe, North American firms and big Mexican players. It does not matter what we do in Europe, this is the place where we have to prove what we can do,” explains Cudia. GEFCO has a special card to play in Mexico: its expertise managing automotive recalls. During one of the largest recalls for GM vehicles in Europe, GEFCO was in charge of logistics for the entire operation. In the last ten years, OEMs have faced a spate of recalls, which can benefit GEFCO’s positioning in Mexico. Although they might be seen as a problem that damages the image of an OEM, Cudia sees this as a way of preventing accidents. By taking care of their customers, the companies improve their image. Apart from that, these recalls are a significant challenge for the logistic companies. “A recall is a reverse logistics process. It is more complicated than just sending a truck to the dealership to load the cars and bring them back. One would think that if we can go from A to B, we can go from B to A as easily. This is definitely not the case, as it is much more complicated,” says Cudia. In Europe, GEFCO regularly conducts this reverse logistics process for cars that have problems. Nevertheless, Cudia is certain that GEFCO’s expertise in reverse logistics cannot be its area of strength to enter a market. “We are not trying to enter a market through this approach. Although recalls have been happening during the last few years because of some safety problems, we wish they would not happen again. We cannot prepare our expansion with this kind of operation exclusively, we need to focus on regular logistics too.”
According to GEFCO’s general manager, the proximity to the US is one of the most attractive features of Mexico. He sees this country as allowing GEFCO to demonstrate its full capabilities in the region before fully entering the US market. “Given that the vast majority of all cars made here go to the US, there are a lot of parts that are crossing the border,” explains Cudia. “It is far more interesting for GEFCO to focus on international flows for now, as this area will continue to outstrip the domestic market. Even as production increases here, it will be impossible for the domestic market to absorb the extra 1 million cars that will be made here per year.” The key for the success of the company is its customers in other parts of the world that support GEFCO because they know how the company works. “We are like a start-up here because we are still small and not well-known in the country. We are becoming more visible one step at a time. It is important for us to have customers from other parts of the world, even when companies here do not know who we are, because our reputation changes once they realize the kinds of customers we have. That already speaks well of us and our services.” At the moment, OEMs are the main target for GEFCO, but the French company is aware that suppliers also provide an attractive opportunity.
Logistics are becoming increasingly globalized, which is a challenge because it implies different types of operations. In just one operation there can be inland and maritime transportation, warehousing, and customs. Cudia claims GEFCO’s expertise in bridging all of these processes is what sets the company apart from its competitors. “We have a solid engineering team for long-term operations, and our partners also subcontract our engineers. This differentiates us in the automotive industry. We organize everything with our suppliers and partners, resulting in a mix of services that we can provide for different activities,” states Cudia. Right now, GEFCO’s strategy is to keep growing and finding customers. As a small company, everyone in GEFCO has to take on several responsibilities, which helps to keep costs low. The company does not have its own trucks and it does not want to invest in warehousing. “We have to follow our strategy and start growing step-by-step. The market is mature and there are many companies that have been wellestablished for years. We have to prove ourselves in this market and then expand,” states Cudia.