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Analysis

Transparency and Reactiveness to Transport Challenges

Tue, 09/01/2015 - 12:33

Considering that 56% of the total cargo in Mexico is moved by truck, many companies focus on this segment. However, multimodal logistics offers many advantages to manufacturers and distributors, and is the area of expertise on which DSV Sea & Air focuses, offering an alternative to competitors who mainly offer rail and road logistics. Mexico’s many free trade agreements with Europe and Latin America offer a particular advantage to the company, given that most of its automotive clients are based in Germany and Spain. DSV comes from a trucking background with a fleet of more than 17,000 trucks in Europe, which has provided the company with substantial experience in the traditional logistics model, allowing it to develop a reliable and cost-effective service for its customers. DSV has a strong network of OEMs, Tier 1, Tier 2, and Tier 3 clients, and also offers warehousing services for companies that have their own logistics.

Most of DSV’s contracts are for import logistics, while exports to Europe, Asia, and the US represent between 2-3% of its revenue. Having grown from zero shipments three years ago, to 800 shipments per month to and from the US, DSV Mexico has expanded significantly. Moreover, transporting products by truck from Mexico to the US remains a more expensive option than sending them by sea via Asia. Approximately 37% of the company’s sales come from the automotive sector, making Mexico an extremely relevant market for DSV and one of its top ten countries in terms of profitability. Furthermore, Koehnke and his colleagues are now working with the Automotive Cluster of Guanajuato, looking for new ways to increase awareness of the brand.

DSV tries to maintain an international outlook. In that sense, temporarily relocating workers from many European countries has meant that Mexican workers have learnt about European work culture, while Europeans have discovered new things about the Mexican market. “It is a win-win situation,” explains Torge Koehnke, Managing Director of DSV Air & Sea Mexico. “Our European employees learn more about the logistics business, and they help us communicate with foreign companies.” Furthermore, DSV trains its staff in every area of the business so that operators know how to run each department comprehensively.

DSV has developed solutions specific to the Mexican market, which offer transparency throughout the whole process. “We cannot provide a solution for every problem, but we can offer our clients an insight into the situation and possible alternatives for shipping their most urgent products,” expands Koehnke. Many customers, especially those in the automotive sector, require backup services as soon as any problems appear. DSV is equally competitive in trucking as it is in sea and air transportation, and its online platform offers a great way for companies to plan their timeframes and costs, according to their destination and shipping information. Furthermore, in case of a strike in the trucking sector, DSV will remain largely unaffected since it operates its own fleet. The multimodal approach is what gives DSV its privileged position in the market. “We try to promote our multimodal services, but there is still resistance from Mexican clients that are accustomed to definite trucking services and timeframes.” Koehnke primarily attributes this to the difference in transportation time.