Logistics Services Act as an Extension of the Client

Q: In which sectors has Grupo TM found the most opportunities in the Mexican market?

A: We participate in the automotive, electrical appliances, aerospace, food and beverages, retail, manufacturing, electronics and textile sectors. For a couple of years now, the instruction from our board of directors was to bet heavily on segment diversification so as not to depend solely on one industry. Three years ago, the company was 100 percent reliant on the automotive sector. Today, our dependency on that industry has been reduced to between 50 and 60 percent.

Q: What are the challenges that logistics companies face when offering solutions to diverse industries?

A: We customize the service for each industry and we offer added value according to the sector. We believe that logistics and transportation in Mexico, and in the world, have changed because supply chains are more integrated. The traceability, visibility and flexibility that each industry needs are very different. Although the certifications, processes and regulations are the same for each sector, our service capacity is personalized. This is not easy because the specific services that clients demand require extensive research. For instance, for each driver that we have on the road, we have on average one person in areas such as sales, operations and customer service who configure and design services and ensure that each trip is carried out to the standards that each client requires.

Q: Traceability is a trend in the logistics sector. What is the biggest challenge for logistics companies in Mexico to achieve this?

A: Technological innovation and the development of systems within the organization are key. Although there are very robust platforms like Oracle that companies can buy, it is always important that the IT area of the company is involved in the development of applications around Radical Precision Engineering (RPE) or other interfaces to connect with customers. If a transport and logistics company does not have an IT area, it cannot participate in high-value chains nor can it participate in foreign trade with countries like the US or Canada. It is extremely costly and complex to delegate this responsibility to a third party and not have it within the company.

Q: What trends are emerging in the industry and what are the greatest customer needs?

A: Safety and care for the environment are definitely trends and needs in the industry. Audits now include issues that clients did not request before, such as contracting processes, security standards and protocols and regulatory compliance. In the past, customers limited themselves to the company signing an agreement based on commercial terms and the ability to offer the service. Now, clients make sure that the company complies with all regulations and that the company has a structured Corporate Social Responsibility (CSR) policy. 

The sectors that transport high-value merchandise are much more concerned about how providers comply with factors such as fiscal and employer obligations and with all the regulations of the Ministry of Communications and Transportation (SCT), among many other things. But it is not only necessary to have the documents that prove you are certified; companies must also validate the degree of compliance. The industry has become more complex and we have to understand that we are business partners to our clients. We are responsible for their inventories and raw materials. This means that while we are transporting merchandise, we become an extension of the company.

The trend in the logistics industry is for the provider’s communication systems to connect to the customer’s communication systems in real-time to receive information, status and documents that demonstrate that the service has been concluded. This allow both sides to continue their processes more effectively.

Q: What impact has the COVID-19 pandemic had on the Mexican logistics industry?

A: COVID-19 is going to cause a revolution in the logistics industry. It is a fact that the world is approaching one of its worst economic downturns. We choose to look at this is as a disruption in the way of doing business. There is a before and after in the way in which we are operating today amid the ongoing pandemic. Since the health crisis began in Mexico and the government ordered the closure of non-essential operations, we have issued more than 35 initiatives within the company to take care of employees’ health and to have flexibility in administrative areas to manage how they can work from home. This has forced us to digitalize the company beyond the plans we already had.

Grupo TM is a provider of transportation and logistics services, including handling of industrial, commercial and retail merchandise. Grupo TM offers LTL, FTL, maritime, air and hand carrier services