Logistics Provider Needs Supply Chain VisibilityMon, 09/01/2014 - 11:58
Like butter scraped over too much bread, large shipment and logistics companies face the danger of spreading their operations to such an extent that they lose focus of their main core business. Daniel Miranda, Automotive Marketing Segment Manager of UPS Mexico, stresses the importance of overlapping a global logistics strategy with a local one to prevent this loss of focus. Considering the worldwide reach of the automotive industry and the fact that most decisions take place in overseas headquarters, close ties with local branches is essential. As a carrier and forwarder, UPS further maintains its unified front through its software system. “Our systems are the same around the world. The tracking number assigned in China for a Less-Than-Container-Load (LCL) shipment remains the same when it arrives to the US or Mexico,” Miranda explains. “All our network and operation hubs are connected, creating a seamless process for the customer.”
UPS’ ability to strike a chord on a local and global scale makes it possible for the company to identify the most important logistics needs of the industry. In response to the close commercial ties Mexico has with the US, the company designed a new product called Cross Border Connect (CBC). This service integrates UPS’s brokerage capabilities to reduce customs delays associated with border regulations and lengthy paperwork. This means there is a faster transit of cargo that allows companies to have reliable networks and be better positioned within the supply chain. Having identified issues at the border surrounding clearance processes and the resulting bottlenecks, this solution eases the crossing of goods. Miranda shares a success story with Chrysler’s aftermarket brand Mopar. The company was experiencing issues with visibility, customs delay, and lack of control because the packages were small in volume. “In response, we developed a solution where we automated the outbound processes and this offered visibility,” Miranda explains. “These tools not only gave access to the shipper, but also the distributor, buyer, and end customer,” he adds. Miranda points out that the key aspect of visibility is the availability of information in the same platform. “In the logistics industry, other companies use different platforms for different applications, whereas we integrated all of our services into the same system.” UPS’ fleet covers 35,000km per day in Mexico, servicing over 30,000 zip codes, so connectivity is a crucial element in maintaining its network. “We have more than 390 access points in Mexico where our clients can ship their cargo, in addition to having a presence in every airport,” Miranda comments. These service centers are oriented to the automotive clusters spread across Mexico.
In 2013, UPS launched a new product, Preferred LessThan-Container-Load (PLCL), an expedited ocean freight service between Asia and three Mexican cities: Monterrey, Mexico City, and Guadalajara. This service was initially launched in Japan in 2010 and in just two years, demand led to the expansion into the US from 27 Asian ports and seven Western European ports to the US, Canada, and now Mexico. “In this service, if a PLCL arrives from China, instead of taking it directly to a Mexican port, it goes to Long Beach, California. From there, it makes an inbound movement to Laredo and then to the three cities in Mexico,” Miranda explains. This service was created to meet customer demands resulting mostly from the growth of US nearshoring, as Mexico is quickly becoming the preferred nearshoring location for US based companies looking to manufacture goods for NAFTA. In order for PLCL to work, it uses the UPS CBC service, which integrates include speed, pricing, enhanced visibility, and reliability. UPS’ PLCL can potentially cut a typical three-week LCL ocean transit time by up to 20% and offers cost savings of up to 60% versus standard UPS air freight. What distinguishes PLCL from any other ocean shipment is the level of visibility it offers to customers. The integrated software ensures that companies can anticipate and control their inbound supply chain operations. This service is useful if the component is crucial for a just-in-time procurement mode that needs to arrive as quickly as possible to the warehouse. Miranda describes a success story where one of UPS’ clients was shipping transmissions to the US using charters: “UPS suggested carrying out the clearance at the airport, which is 30 minutes away from their site, and take it to the customers’ warehouses in the US. While it would take longer, it cost 30% of what the company used to pay.” This supplier used this service for urgent shipments and now uses it as the normal mode of transportation.