Textile Logistics Provider Sees Greenfield Opportunity in AutomotiveSat, 09/01/2018 - 11:20
Q: What is Onest Logistics’ strategy to penetrate the automotive industry?
A: Onest Logistics wants to tackle Tier 2 and 3 automotive suppliers with subassemblies, maquila, storage and just-in-time (JIT) deliveries. The company operates almost 400,000m2 of storage space, which has helped us build expertise on inventory control and maquila operations. The company can establish operations centers to service Tier 2 and 3 companies in any part of the country where we can receive primary resources and manage their transformation and quality control before delivering the final product. Onest Logistics can work directly on the assembly line or make JIT delivery.
Q: What advantages made large end consumer companies select Onest logistics as their logistics provider?
A: Our main value is a highly flexible model that adapts to the needs of each client. We understand that some may want a fee per piece or per box, a storage place with or without racks and equipped with more or less sophisticated systems. The company designs tailored solutions and enables clients to use storage space and manage the numbers of workers they need according to their requirements throughout the year. Capacity is what differentiates Onest Logistics from the rest. Contrary to our international competitors, our capacity reinforces any operation when support is needed. International logistics suppliers have the support of massive capital but do not necessarily have enough experience. Onest Logistics’ team has worked in logistics for over 27 years; we have seen and transformed the third-party logistics (3PL) sector in Mexico.
Q: What is Onest Logistics doing to become the leading logistics company in Mexico?
A: There are huge differences between Onest Logistics and other providers, mostly in terms of capital and the number of international contracts. Despite this, Onest Logistics has grown domestically far more than its competitors. Onest Logistics enjoys solid organic growth and we are working to associate with another logistics company, which could possibly lead to reaching DHL’s size in Mexico by 2019.
Q: How is Onest Logistics’ client portfolio distributed across markets?
A: About 53 percent of our sales are in the textile market while the consumer market accounts for 22 percent. The rest is divided among the cosmetics and perfumes markets and our services to manufacturing plants. The automotive industry presents a huge opportunity for Onest Logistics and we expect that between 10 and 15 percent of our sales will come from the automotive market by the end of 2018. If we play our cards right, this percentage could grow to 30 percent or even 50 percent by 2019 and 2020. There are only a handful of 3PL suppliers in the automotive industry and most are small, local companies. Onest Logistics’ size and greater infrastructure can help us manage the entire supply chain of a certain region, starting with operations of 5,000-50,000m2. We are interested in playing a good role in the development of Tier 2 and Tier 3 suppliers.
Q: How has e-commerce affected Onest Logistics’ operations and how is the company harnessing this trend?
A: Onest Technologies is ready for the e-commerce boom. E-commerce allows the dissemination of inventory across the most important commercial points of the country to ensure regular stocking and better services for our clients. This accounts for less than 10 percent of our sales despite our large investment in this trend in the past four years. However, Onest Logistics expects this share to eventually grow to half of the company’s sales since e-commerce represents between 40 and 60 percent of the company’s sales volume in several markets. With the biggest fashion group in the world, for example, we deliver between 10,000 and 12,000 daily orders. Our goal with e-commerce is to develop inventory poles and provide deliveries through specialized shipping companies. At the same time, we have stablished a strong reverse logistics operation to reduce costs and optimize our shipments to and from distribution centers, especially in under-24-hour deliveries.