Diego Miranda
Marketing Segment Manager Automotive Industry
UPS Mexico
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Insight

Technology, Automation Not Just for Manufacturing

Fri, 09/01/2017 - 14:10

Digitalization and automation are two leading manufacturing trends that have also made their way into logistics. As technology rapidly evolves and clients demand more from their providers, companies must deliver, says Daniel Miranda, Marketing Segment Managers Leader of UPS Mexico.

“UPS is a company made up of engineers,” says Miranda. “Our team continuously works to make our processes more efficient.” The company has made automation and technology integration two global priorities for its future development. In 2015, UPS invested US$1.8 billion to acquire Chicagobased Coyote Logistics, betting on its technology-oriented approach. Coyote Logistics’ advantage was its capability to manage a network of 14,000 road transport operators and 40,000 logistics providers with its own software.

UPS has gradually integrated Coyote Logistics’ technology and according to Miranda, it has already become a pillar of the company’s full truckload (FTL) services. These road shipments between Mexico and the US have increased to the point that the company saw the need to open a Coyote Logistics office in Guadalajara. This office will promote UPS’ FTL and road logistics portfolio within the domestic market. Miranda highlights that road logistics operations between Mexico and the US have been one of the drivers for growth in UPS’ Supply Chain and Freight segment. “The US remains our main partner in ground logistics through our Expedited Ground Freight service,” he says. “This service has allowed us to grow our participation in the automotive industry and we have developed a specialized portfolio for companies that trade between the US and Mexico.”

Together with technology integration, UPS has worked to make road logistics as efficient as possible by taking advantage of Mexico’s airports and internal ports. Managing all customs arrangements at these locations minimizes downtime, which is the third-biggest challenge companies face during their logistics process, according to 82 percent of respondents in a UPS study developed by Grupo Expansión called Exports in Mexico: Challenges and Opportunities (Las exportaciones en México: Desafíos y Oportunidades)

Miranda says the government is working on several pilot projects to unify customs processes, cutting downtime in half. “The government is taking steps to make customs operations much more automated. Now certified importers and exporters with frequent operations are registered by the government to speed up their customs processes,” he says. “All these innovations will eventually help minimize delays and make the process flow seamlessly.”

On top of UPS’ strategy for traditional logistics, Miranda hints that the company has further plans regarding technology integration. “We expect to see an increase in e-commerce operations and this division is one of our main priorities, along with the development of the automotive and aerospace industries,” he says. “Consumers will gradually use the online aftermarket more and we expect significant growth in logistics for e-commerce operations.” This, however, requires an effort from UPS to accommodate clients’ requirements in e-commerce deliveries. Another study by UPS, called Pulse of the Online Shopper, reported clients are demanding higher flexibility in shipping destinations and payment options.

Miranda is not alone in having such optimistic views on e-commerce in the automotive sector. “There are automotive manufacturers that skip retailers to participate directly on an e-commerce platform, including their distribution network, for example,” he says. The Pulse of the Online Shopper report also shows that social media influences shopping decisions for 75 percent of all consumers and 80 percent of millennials surveyed. The aftermarket might be the gateway into e-commerce for the automotive market but Miranda thinks there is also an opportunity to grow these services in B2B operations. As industry participants widen their supplier network, that gives UPS an opportunity to attract providers to its platform. “Especially with manufacturing equipment, suppliers often work globally. It is essential they have a strategic partner to ease international logistics operations,” he says. “We are noticing more and more companies are willing to buy products online and now suppliers can take advantage of the experience UPS has developed in other countries.”