Outsourcing Logistics to Speed Up Customs ProcessesMon, 10/21/2013 - 11:54
The rule of economies of scale is rarely disproven: generally speaking, the larger the scale of a company the cheaper the price it is able to offer. “Because we deal with suppliers from many different companies it is easier for us to get better for whatever they are buying, than it would be for them. If a company is not experienced in this area, and just buys the equipment it needs, dealing with the taxes itself, it will often cost them more,” says Luis Martínez, Co-Founder of TAC, a company that supplies equipment and logistics solutions for a number of different industries ranging from aerospace to mining, and its sister company, LUEMAR, which is based across the border in El Paso, Texas, providing a similar logistics service. “TAC is one company offering many services, which means that we are just one company to deal with and we represent just one additional cost, rather than several.”
The deals Martínez refers to are part and parcel of the border services that TAC offers its customers on both sides of the border, which includes customs services for products both entering and leaving the US, from and to Mexico. Helping in these processes is the fact that the company has its own customs broker, is C-TPAT certified, and is a member of the Free and Secure Trade Program (FAST), meaning that customs processes can be fasttracked. The company is also in the process of getting NEEC certified, which on the Mexican side will mean entering a specific line that avoids certain inspections, thus serving to speed up the process even more. “The fact that we integrate everything under one roof is important. We do customs brokering, and we have a presence in every port and crossing point, which all differ from each other. I can tell our customers exactly what will happen when they arrive at each border point, because the requirements differ slightly between all of them. Just because one entry point is closer, it might not necessarily be an easier or less costly place to cross,” explains Martínez.
The company’s heavy focus on the import/export side of logistics services makes it a very good match for the mining industry, given how internationalized it is. “The mining industry’s needs are very different, because mining operations require a lot of heavy machinery, which involves more yard work rather than just plain warehouse work. We develop a website for every customer so that our clients can track the transportation of their equipment in real time,” explains Carlos Lara, Co-Founder of TAC. “For the most part the mining industry consists of foreign companies operating in Mexico, and they are not equipped to overcome the logistics challenges of supplying the industry,” adds Martínez. “The remote areas in which the mines are located, and the size of the projects, made mining a good business opportunity for TAC.”
TAC’s local knowledge and logistics experience provides the company with the necessary skills to overcome the logistical challenges of operating in Mexico, particularly on isolated mine sites, which is an area where non-local companies particularly need help. “If a company thinks that two points are 30km apart we often have to interrupt and tell them that it will take several hours to drive that distance, or that the truck they are considering using will not be able to make it the whole way,” says Martínez. “By knowing the area and the region we can predict costs much better. Local expertise means that we know the realities of whether a truck can cross at a certain point or not, and how transportation challenges will affect the cost of logistics. Knowing that we can supply things locally, and with good quality, makes our customers realize that they do not need to bring products all the way from Canada or the US.”
Based in Chihuahua, the company has grown 40% each year for the last five years, and now has a team of 200 staff predominantly serving the automotive, aerospace and mining industries. Mining now represents 12% of the company’s sales in logistics, though the mining industry does also buy TAC’s products through distribution channels. Martínez emphasizes that the mining industry will play a significant role in the company’s ongoing growth. “We are becoming global thanks to the mining industry. Whoever supplies the mining industry is not just working locally; they have to work with the entire world.”