Infrastructure, Versatility Required to Harness Nearshoring

Q: What challenges did xpd encounter during the transition from Europartners Group to xpd global, particularly regarding rebranding and operational adjustments?
A: We faced challenges managing changes, especially due to our strong attachment to the brands we built from scratch. However, the pride of belonging to a global group with a presence on five continents, such as xpd global, is worth it. Our rebranding has enabled us to standardize our global processes and systems, bringing transparency and automation to our communications and data management. This has minimized errors and maximized efficiency. For our customers, this means higher data quality, better supply chain visibility, and a more consistent experience worldwide.

Q: How has xpd global's transition aligned with the evolving trend of nearshoring and its impact on the logistics sector?
A: Nearshoring has been beneficial for us as a Mexican logistics company specializing in the manufacturing sector. We have seen a significant amount of investment in the relocation of production facilities in the country. Our presence in North America, Europe, and Asia allows us to provide comprehensive relocation services, including trade compliance coordination, legal matters, and value-added services. This has also simplified the experience for North American clients who often face challenges with Mexican customs. Having a single company with a unified team in all of these countries has made the service experience much easier for our clients.

Q: Which of xpd global’s products and services are experiencing higher demand due to nearshoring? 
A: Warehouse services have seen a significant increase in demand, with companies looking to optimize their logistics channels by having more distribution centers. There is also a growing need to integrate solutions with clients' existing systems, such as ERP, to provide real-time visibility from order placement to solutions like Purchase Order Management. This level of integration offers clients versatility in decision-making, such as combining purchase orders to save costs on shipments or using a mix of expedited and standard shipping for different parts of an order.

We have noticed increased interest in nearshoring from industries like automotive, pharmaceuticals, medical equipment, high-tech electronics, and aerospace. Automotive is our largest market and we provide it with tailored solutions from planned to time-sensitive logistics services. Many clients are also utilizing 4PL platforms, and we are actively integrating with them to be their trusted provider.  These platforms allow for fast decision-making, sometimes within 15 minutes. Our 4PL solution is being tested with a couple of clients and has received a positive response. We are confident it will be a valuable addition, especially in today's volatile business environment.

Q: What changes are necessary to address the increase in demand that nearshoring will bring to the Mexican logistics sector? 
A: There is much to be done, particularly regarding infrastructure challenges. Ports are operating at maximum capacity, with Ensenada reportedly at 116% and Manzanillo at 93% according to the latest updates. Despite some investments and expansion plans, there is a need to accelerate infrastructure improvements. Road infrastructure is also lacking proper maintenance, with many roads not even painted. Border crossings into the United States are also congested, and railway options are limited and not optimal.

Bureaucracy and documentation remain complex in Mexico compared to other countries, highlighting the need for automation and technological advancements to simplify processes. Security challenges on roads, particularly due to organized crime, pose risks to drivers and increase insurance costs, affecting overall logistics. There is also a shortage of skilled personnel, not just drivers but also trained logistics professionals. From xpd global, we are doing our part in investing in training and education for our talented professionals, because we know that is crucial to fully harness Mexico's potential for growth in a structured manner.

Q: What geopolitical events should freight forwarders and logistics companies closely monitor to prepare for potential changes?
A: This year, Mexico, the United States, India, and other countries that are significant for international trade are facing crucial elections. We need to understand the changes in regulations that can impact global logistics that new governments can bring.

For instance, environmental regulations are crucial, as there is a global agenda to reduce CO2 emissions and transition to cleaner fuels, which puts pressure on airlines and shipping companies to evolve their operations, often leading to additional costs passed on to consumers. Companies must balance these factors to achieve these goals and not compromise operations. 

We must also closely monitor issues such as the US-China diplomacy and trade negotiations, and the conflicts in the Red Sea, the Middle East, and Russia-Ukraine. It is essential to stay vigilant and understand their impact on logistics operations, energy, and food supply chains.

Q: What are xpd global's expansion plans for the next six years, including new office locations?
A: We have an aggressive expansion plan, aiming to be the most global Mexican company. We have 91 offices in 33 countries and are opening offices in England, Italy, and France in May 2024, followed by the United Arab Emirates, India, and Taiwan in June. By 3Q24, we plan to open offices in South Korea, and in Japan in the last quarter of the year.

Our main objectives include being closer to our clients to offer them the best of both worlds: local experience combined with global expertise. This customer-centric approach allows us to design tailored solutions based on a deep understanding of our clients' needs. We also focus on enhancing our product solutions, aiming to design agile connections that deliver faster results and mitigate risks. To achieve this, we operate 24/7 across all six continents, utilizing a "following the sun" strategy to provide continuous service. Our expansion allows us to efficiently bring products from manufacturers in the European Union and Asia to Mexico. This expansion also enhances our ability to coordinate project cargo, which requires special expertise and credentials to handle dangerous materials like chemicals.

Our approach includes having dedicated in-house team members for clients, offering peace of mind and allowing clients to focus on their core business. We also conduct in-depth studies to optimize the entire supply chain, involving not just our clients but also their suppliers and their suppliers' clients, creating efficient logistics networks. Our goal is to be the No. 1 provider of time-sensitive and time-critical cargo solutions for manufacturing companies by 2030.

Q: How will xpd global’s approach underpin its expansion strategy?
A: Our approach in 7 pillars will underpin our expansion strategy. First xpd global is People Focused, and committed to creating a supportive, innovative, and empowering work environment. We have been ranked by Grupo Expansion as one of the 10 best companies to work for, ensuring our team is motivated and dedicated to taking exceptional care of our customers.
Secondly, we are leveraging technology, such as advanced digital platforms, for efficiency and real-time visibility, using AI and automation to optimize routing, forecasting, and inventory management. Third, we continuously seek strategic partnerships with the most reliable carriers to stay ahead in innovations and standards.
Fourth, our solutions are customer-centric, with tailored services to meet specific client needs and build long-term relationships. Five, one of our main differentiators is a global reach with local expertise, establishing regional hubs in the most important gateways for quick response and local market understanding.
We are also investing in sustainable practices, adopting eco-friendly logistics solutions to serve environmentally conscious clients. Finally, we are investing in a scalable infrastructure too, with robust Information Technology (IT)  systems and flexible logistics solutions to handle growth efficiently.

xpd global is a Mexican freight forwarder specializing in time-critical cargo integrated logistics solutions for the automotive, aerospace, manufacturing, and technology industries, among others.