Adding Value to Transport Through Innovation

Q: What is TIBA’s added value in the logistics segment?

A: We have a strong added value called Fast Track Innovation by TIBA, which is an innovation process that helps us identify areas of improvement within the supply chain of our customers through Design Thinking workshops. We have a clear understanding that our sector is increasingly saturated and mature. International transport has become a commodity. High quality service, on time deliveries and real time visibility has become the standard so our vision is to focus on innovation and achieve efficiencies in our clients’ supply chains. After an assessment of the end-to-end supply chain, we identified areas of improvement and alongside our customers we design a solution, create prototypes and test them in a very short term. The process is creative and dynamic as we address challenges through an agile project format that can deliver value in weeks instead of months. The project was launched last year and clients have reacted enthusiastically to this fresh approach.

Besides our innovative market approach, a key differentiator of TIBA is our high focus on particular industries and niches. We know our strengths and we are clear on where we can deliver real value to our customers. Having a deep expertise on specific industries and not being scattered across all existing industries, makes our clients value and trust us with their businesses.

Our main sectors are renewable energy, consumer goods, high tech & telecom, automotive, healthcare and building materials. In addition, we have built unique solutions for some niches such as bulk liquids and hotel logistics.

Q: How do you create added value for renewable energy clients?

A: TIBA has developed strong specialization in solar and wind energy throughout the years. To move wind turbines, you need an engineering plan, study the route end-to-end, carefully design loading and unloading processes and select specialized carriers to handle the shipments. Carrying large dimensions objects and of extraordinary weight to remote locations requires a great deal of specialization. Our company’s engineers have the required technical expertise to oversee these projects. We also have people who have a history in the renewable energy sector. A couple of them worked several years for the industry-leading manufacturers which gives us a clear understanding into what our customers expect from us. All these give us a competitive advantage in this sector.

Q:  What is the state of Mexico’s infrastructure networks?

A: Mexico is lagging behind from a logistics viewpoint. Port developments in Veracruz and Tuxpan, for example, will help improve transport times as capacity increases. However, highways, and especially railways, are behind. In air transport, NAIM’s cancellation will affect Mexico greatly. This was going to be the driver of international logistics that would greatly help position Mexico as the hub for Latin America. Miami is the natural hub for Latin America, but with recent global trade tensions, companies are looking elsewhere. The primary destinations are Mexico City or Panama. If the airport had gone through, Mexico would have been the definitive option.

The economic situation in Mexico has definitely impacted some industries in which we participate. However, tensions between US and China and the US and the EU have also made Mexico more attractive. In the last few months, I have spoken to many Chinese manufacturing companies that want to migrate here. At the same time, there is greater demand from the US for Mexican suppliers, primarily in raw materials. The world is demanding more infrastructure capabilities from Mexico.

Q: What are your views on the development of regional airports in important manufacturing areas?

A: Queretaro is among the airports with the most growth in terms of cargo volume. Charters from important logistics airlines are flying into Queretaro for industries such as automotive and aerospace. Guadalajara is historically also an important airport. However, neither has the connectivity in terms of flights with the rest of Latin America. As a result, a great deal of cargo is transported on passenger flights. To take on a bigger role, these airports would need a concerted effort from multiple players to ensure an increase in international flight connections and cargo storage capacities. This is unlikely in the short term.  

Q: What are the main errors that clients commit when transporting cargo to Mexico?

A: The main challenge is the lack of updated information regarding the frequent changes in regulations in the country. For example, not having the right advisory regarding NOMs. If merchandise arrives at the airport or port and the importer does not have the right permits, then products are held up at ports where importers have to pay for storage and demurrages and companies sometimes end up missing their commercial targets. These errors cost companies money.

This has particularly been a headache since last year, with many new requirements from the government. Even companies that have been bringing goods to Mexico for a long time experience this. The issue can be resolved with appropriate advisory and planning. We have a special customs advisory service for this that works together with customs agents.

Q: What short-term opportunities do you see in the market?

A: TIBA has an aggressive plan for Mexico. We want to double our size in the next five years using our innovation model. We expect that by the end of this period, Mexico will be the most important country for the group. Trade conflicts definitely have opened up an opportunity, particularly with respect to the supply of basic products to the US. These include foodstuffs or hygiene products. In the end, the gap between what used to be very large international freight forwarders and local players is smaller. Everyone is using the same carriers. It is no longer a question of muscle against muscle, but who can provide real added-value to the supply chain.

TIBA Group is an international freight forwarder, customs broker and logistics operator with 50 offices worldwide. Mexico is the company’s second-largest market