Underserved SMEs a Significant OpportunitySat, 09/01/2018 - 10:36
While big logistics operators with global presence developed solutions to cater to OEMs and large Tier 1 suppliers, SMEs in emerging markets such as Mexico are being underserved, according to Miguel Trejo, Sales Director of Agility Logistics. Operators are missing a clear opportunity, he says.
“Not all companies have the same access to a logistics operator,” Trejo says. “We have found great business potential among SMEs that the big fish have left unattended.” As a Kuwait-based logistics operator with presence in over 100 countries, Agility Logistics focuses on offering support to small and medium importers and exporters, in addition to some of the world’s largest corporations. The company takes advantage of its experience in international trade, its global presence and technological prowess to help foreign clients come to Mexico and local clients to participate in global trade.
In a country where up to 52 percent of the GDP is generated by SMEs, according to INEGI data, the importance of helping these companies to integrate into global supply chains cannot be stressed enough. More so when it comes to the Mexican automotive industry, which contributes with approximately 3 percent of GDP and 18 percent of the country’s manufacturing GDP, according to ProMéxico. Trejo says Agility Logistics is in an excellent position to boost Mexico’s GDP thanks to its 32 years of experience in the country and its origins as a company from an emerging market.
While logistics operations have achieved significant milestones globally, Trejo underlines the gap in logistics between developed and developing economies. “Logistics generally are more advanced in economies such as the US or Europe while less-developed Latin American countries often have fallen back,” he says. Yet, automotive FDI keeps pouring in and Agility Logistics has found a niche among suspension and seat component providers that seek to grow their business in Mexico. The company has advocated itself to developing technology that eases logistics processes for international trade. According to Trejo, the company wants to be seen as a technology company that collaborates in the area of logistics.
To this end, the company released in 2018 its Shipa Freight platform as a way for companies to use digitalization to boost their logistics operations. “Clients can enter this digital platform, quote their seaborne or airborne shipments in a complete or consolidated container, book it immediately and pay online,” says Trejo.
“Shipa Freight is a simple, technology-driven answer for small and medium-size businesses trying to take the complexity out of their international shipping,” said Tarek Sultan, CEO of Agility at the company’s release of its newest platform. “It gives them the transparency, flexibility, competitive pricing and customer service that the industry offers only to multinationals and high-volume customers.” The company has a database with millions of quotes so that whenever users access the platform, they can know exactly how much they will pay for a shipment according to weight, origin, destination and the type of commodity that will be transported. “This gives clients complete clarity throughout the shipment process,” Trejo says. “Clients can further mitigate their risks by buying insurance for their shipments straight from the platform.”
The introduction of Shipa Freight is Agility Logistics’ effort to make logistics in Mexico a more streamlined process. Trejo, however, still sees other obstacles that the country must overcome to consolidate its position as a logistics hub. “The 2012-2018 federal administration made a significant effort to develop logistics infrastructure with great-scale projects such as NAIM and improvements to ports and railroads.” Improved operations in the Manzanillo, Veracruz and Lazaro Cardenas ports have been crucial for the company’s results but there is still much to do for Mexico to reach its true logistics potential.
Offering greater certainty to logistics operators and transportation companies while increasing security should be top priorities for the 2018-2024 federal administration, according to Trejo. “We cannot forego the development and specialization that Mexico’s automotive industry has reached and that includes logistics processes and infrastructure.”