View from the Top

Transportation Services Pave Way for Talent Retention

By Alejandro Salas | Fri, 03/29/2019 - 05:00

Q: What competitive advantages does Transportes LIPU get from being part of Grupo Traxión?

A: Our relationship with Grupo Traxión gives us solid finances and strict financial discipline. Transportation of either goods or passengers is a capital-intensive industry. Some companies may need between 40 and 100 buses to transport their personnel. Multiplying this by the cost of each bus results in an investment of several million pesos. Having the financial capacity to face these operational costs is a great advantage for Transportes LIPU.

Grupo Traxión is the only transportation company listed on the BMV, which demands strict financial discipline that translates to a better service. Ever since we went public, Transportes LIPU has committed to growing its invoicing at a rate of 18 to 20 percent per year. This rate was reached in 2018 and we expect to keep this momentum through 2019.

Q: What are the risks of not having a quality personnel transportation service in place?

A: Not having this kind of service could lead to trouble when hiring and retaining people. There is fierce competition to capture staff in automotive-intensive regions like the Bajio and companies that do not offer these services may lose talent to those who do. Without transportation services, people are forced to pay a great deal of money to reach their workplace, wasting time along the way. In addition, evening and night shifts are usually not compatible with public transportation schedules. Public transport also does not offer the same comfort and personalized service offered by private staff-transportation companies.

Q: What should clients look for in a personnel transportation company?

A: It is important to look for solid infrastructure that can support both units and operators. The ability to provide maintenance, train drivers, as well as investing in technology and guaranteeing fuel supply are key differentiators that ensure passenger safety. Ensuring workers arrive on time is another important factor. Production line stoppages are extremely expensive for automotive companies, so late arrivals of buses transporting 45 workers could have a huge impact on a plant’s productivity.

Q: What role does technology play in increasing Transportes LIPU’s operational efficiency?

A: Investment in technology has helped us discover a whole new world in terms of transportation. In 2017, we started implementing telematics and now it plays a key role in our decision-making process. All our buses are connected to Traffilog’s telematics systems, which helps us understand the driving habits of our operators and identify opportunities for improvement. We can also detect bus malfunctions in real time and prevent further damage to the units thanks to a preventive maintenance strategy.

Technology has also made transportation operations easier by using data to design efficient routes. Our latest implementations ensure efficiency in the assignation of operators, units and even the lot where each unit is parked. Now that these operations are digitally mapped, Transportes LIPU can anticipate the most efficient scenario and work toward it, which translates to greater fuel-efficiency and much lower variable costs.

Q: How is Transportes LIPU embracing sustainability in its operations?

A: Transportes LIPU started purchasing buses powered by Euro V diesel engines in 2018. We expect the adoption of more efficient engines will continue in Mexico as new emissions regulations are enforced. In terms of CNG, we have explored various options to become the first company in the personnel transportation sector to use this technology. In collaboration with Hyundai, Grupo Traxión invested in the acquisition of its first gas-powered vehicles at the beginning of 2019. These units will be used to cover part of the company’s operations in Tijuana.

It is difficult to implement natural gas motorizations in Mexico due to the limited natural gas supply in several regions of the country. Moreover, using these technologies does not translate to reduced operational costs. CNG engines are more expensive and raise the final price of buses. This price increase could be compensated over time because gas is cheaper than diesel, but lack of availability makes this difficult. Increasing CNG coverage in Mexico, improving government incentives to ease the acquisition of CNG vehicles and developing the know-how necessary to provide maintenance to these technologies are key areas that must be addressed.

Alejandro Salas Alejandro Salas Senior Editorial Manager