Ingo Babrikowski
CEO
Estafeta
/
View from the Top

New Investments to Match Increasing Operations

By Ricardo Guzman | Mon, 09/21/2020 - 13:09

Q: What challenges and opportunities has the COVID-19 pandemic created for Estafeta?

A: Mexico needs to continue working and moving, which means supply and logistics are essential. Home deliveries have grown a great deal with the pandemic and there is a huge opportunity there. Our operations rocketed almost 50 percent, a figure well above the increase seen during the top sales season that starts with El Buen Fin (the Mexican Black Friday) and continues through Christmas and the December holidays when we usually record a 30 to 35 percent increase in our regular deliveries.

Among the challenges is the need to comply with all health and hygiene protocols, both for our staff and facilities. That is having a major impact on our daily operations. We need to better manage our routes and to expand our fleet. Just to abide by social distancing protocols, we needed to expand our work stations and adapt to fewer people working simultaneously in the same space. Every global cargo flight that was delayed and all the commercial flight cancelations also worsened the impact on the industry.

 

Q: How have these changes impacted your business plans or current expenditures?

A: We increased our investment ceiling 25 percent in 2020 to MX$830 million (US$39.4 million), both to adapt our work units and also to be closer to clients’ houses. During the pandemic, we inaugurated eight additional units, four of them in the Mexico City metropolitan area, in San Martin Obispo, Ecatepec, Azcapotzalco and Benito Juárez

There was an impact on costs since we pay for the new units, but it was worth it considering how fast the openings happened. Finding a place, adapting it and starting operations can take up to six months and we managed everything in one or two months. That was a major challenge and I have to acknowledge all the support given by authorities to speed up the process. While many companies have had to close their doors and terminate jobs during the pandemic, we are hiring. We were lucky to be designated an essential industry and have hired up to 1,500 new positions for a total 9,000 employees nationwide.

Besides these eight new operation centers, we are also opening six new facilities nationwide, two of those in Monterrey and Guadalajara to reinforce our capacity in these strategic cities during the December holiday season. We also added an additional plane to our fleet to strengthen our capacity and make sure we can provide the best service to our customers. This plane, the fifth our fleet, will boost our air cargo capacity by 20 percent.

None of this has been easy and I must thank our entire team for their outstanding job. We are a service company that relies on people and I am very impressed with their performance.

 

Q: What is your assessment of how e-commerce and other digital tools are shaping the future?

A: Despite being locked down and with most stores being closed, people found a way to buy the goods they needed. E-commerce took a major step forward during the pandemic; the same development expected to take from three to six years was achieved in only three months. People who had never used e-commerce before were forced to use it and they are realizing that it is safe and will use it again. We are experiencing a cultural change.

The increase in orders also created new challenges, which forced us to make a decision: either we reject new orders to secure the same quality and delivery times for all our deliveries or we help our clients and take every order, albeit delaying the process for several days. We chose to help people and work hard on every delivery. The same happened with providers in supply chains; they are also moving into e-commerce.

 

Q: Besides e-commerce and augmented reality in warehouses, how is technology impacting your operations?

A: One of the main lessons we have learned is that we need to improve our communication with the final client. We are using new apps like Apple Business Chat and Google Business Messages, which are connected to our bots that respond to questions from customers.

At Estafeta, we are constantly investing in technology, mostly in communication and tracking systems. We were the first logistics company to track shipments in Mexico 24 years ago, in 1996. We also have the Estafeta University, which is an e-learning digital platform, and constantly use other channels to effectively communicate with our couriers. It was easier for us to adapt our operation and cope with the extra workload during the pandemic.

 

Q: How can the authorities help the logistics industry during these difficult times?

A: Security is the main challenge for Mexico. We move products on highways at night and we feel insecure about this. I believe there is a good opportunity for Mexico to improve security conditions to boost our operations.

Photo by:   Estafeta
Ricardo Guzman Ricardo Guzman Editor

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