Technology Setting New Logistics Standards: Kerry Logistics

Q: How is Kerry Logistics expanding its warehouses and refrigerated services in Mexico? 

A: Kerry Logistics Mexico has made significant strides in its 2024 expansion plans. The company has successfully finished its first warehouse in Tepotzotlan, State of Mexico, which covers 20,000m2 but will expand to 50,000m2 by the end of the year. We will also open additional warehouses in Guadalajara, Monterrey, and the Bajio region. Kerry Logistics is also expanding its perishable goods vertical by establishing new distribution centers in Mexico City, Guadalajara, and Monterrey. 

Q: Which industries are increasing their demand for your services as a result of nearshoring? 

A: Kerry Logistics has seen a significant increase in demand from the meat industry in Mexico, particularly for protein exports. The company has specialized in the transportation of meat products and is now expanding into the complex market of perishable goods, such as vegetables, berries, avocados, and strawberries. Despite the challenges and limited availability of specialized equipment for these products, the high demand and low availability of transport options for perishable and frozen goods, compared to dry meat, have made this vertical a priority for the company. This focus reflects Kerry Logistics’ strategy to meet growing market needs in sectors where fewer competitors are involved.

Q: Besides warehouses, in which areas is Kerry Logistics investing to meet market needs? 

A: Kerry Logistics is implementing several key strategies to meet Mexico’s infrastructure demands. The company is forging strategic alliances and meticulously evaluating and certifying its suppliers to address the acute need for efficient transportation and logistics solutions. This proactive approach aims to overcome infrastructure limitations, which were exacerbated by nearshoring.

Roads and ports are experiencing significant strain, with some ports even facing congestion. Kerry Logistics underscores the urgency for the Mexican government to collaborate with US authorities to improve infrastructure and accommodate the growing demand. This situation is compounded by the geopolitical factors influencing nearshoring, particularly the trade tensions between China and the United States, which have accelerated the shifting of manufacturing to Mexico.

Q: What opportunities does Kerry Logistics see in the Mexican market?

A: Mexico has an opportunity to become a pivotal logistics hub for not just the United States but also for Latin America. Many companies are setting production facilities in Mexico to serve this broader region. This shift is particularly relevant for industries like automotive, which are focusing on the Latin American market rather than exclusively targeting the United States.

The company anticipates that political developments in the United States, including the upcoming elections, will impact trade policies and infrastructure investments. Kerry Logistics expects that post-election, there will be a realignment of trade agreements and a stronger focus on maintaining and enhancing international trade commitments between the United States, Canada, and Mexico. This realignment will be crucial for sustaining the growth of Mexico’s logistics sector and ensuring that it can effectively support both its domestic needs and its role as a key player in the global supply chain.

Q: What characteristics does Kerry Logistics look for when making a partnership? 

A: We prioritize several key factors. First, we look for partners that are well-positioned within Mexico and have robust infrastructure. Potential partners must also have all necessary legal certifications, processes, and operational standards in place, and adhere to logistical regulations. This is crucial because the logistics industry in Mexico is composed of a wide range of operators, but many operate irregularly and unregulated players that can create significant issues.

Kerry Logistics, especially when dealing with Chinese companies, places a heightened emphasis on stringent quality control measures. These clients demand high standards and rigorous certification processes, reflecting a broader trend toward professionalizing the sector and ensuring compliance with industry regulations. 

Q: How is Kerry Logistics integrating emerging technologies into its logistics operations? 

A: Kerry Logistics is actively integrating emerging technologies such as AI and ML on a global scale. At the corporate level, the company is focusing on AI, implementing advanced systems for communication, tracking, and digital platform management. These technologies are increasingly vital as Kerry Logistics expands its use of AI to enhance operations across its 56 offices worldwide. The integration includes sophisticated mechanisms for data collection from various sources, including social media and communication networks, which are becoming more complex and integral to logistics. The company is also addressing generational gaps and evolving digital platforms, recognizing that AI and digital technologies are reshaping the logistics industry and setting new standards for the future. 

Kerry Logistics prioritizes protecting its systems against potential threats. The company employs advanced security measures to monitor and control any hacking attempts or security breaches, reflecting its commitment to maintaining robust defenses as a publicly traded entity. 

Q: What are the key challenges Kerry Logistics faces in last-mile delivery, and how are you overcoming them? 

A: Kerry Logistics faces several significant challenges in last-mile delivery, with security being the most critical. This issue affects the entire logistics sector and requires a collaborative effort between authorities, private companies, and governments in both the United States and Mexico. Another major challenge is infrastructure. Ensuring optimal service for clients requires effective positioning and utilization of infrastructure, which remains a key obstacle. We are actively working to address these issues, but overcoming them involves ongoing efforts and improvements in both security and infrastructure.

Q: Considering the rapid growth of Mexico as a production hub, how is Kerry Logistics planning to scale its operations to meet the expected surge in demand? 

A: To scale its operations and meet the expected surge in demand, Kerry Logistics is implementing several strategic initiatives. The company is developing new services tailored to the needs of its clients, leveraging its unique advantage as a Chinese-owned enterprise. This advantage is particularly beneficial given that many of our clients are also Chinese companies.

A key component of our strategy involves overcoming language barriers. We have a dedicated team with expertise in Chinese, Spanish, and English to facilitate communication between Chinese companies and their Mexican operations. This team helps bridge the gap created by language and cultural differences, which has been a significant challenge. 

Q: How will Kerry Logistics navigate the ongoing tension between China and the United States, and the potential for increased tariffs? 

A: Kerry Logistics maintains a strategic perspective, focusing on long-term vision and adaptability. Automotive tier 1 and 2 suppliers, for example, are likely to shift their focus toward Latin America to mitigate the impacts of tariffs and trade restrictions. These suppliers will need to navigate the changing trade dynamics by diversifying their supply chains and considering alternative markets.

China is positioning itself to capitalize on opportunities in Mexico over the next five years, recognizing the country’s growing importance as a strategic market in the Americas. While trade tensions and commercial conflicts will persist, global markets will continue to evolve and adapt. The broader market dynamics mean that no single country or region, including Mexico, the United States, Canada, or the European Union, can remain entirely dependent on China’s policies or trade decisions. Kerry Logistics is focusing on navigating these complexities by aligning with long-term market trends and preparing for shifts in global trade patterns.

Q: What are Kerry Logistics' plans for the next six years?

A: Kerry Logistics has ambitious plans for significant expansion and development. The company, which was acquired by the largest airline in China two years ago, is focusing on enhancing its global logistics network. The acquisition has provided Kerry Logistics with a large fleet, including 98 Boeing 747s, and access to a major logistics hub in Wuhan, China. This expansion is set to include new routes, with plans to start regular flights from San Francisco to Mexico by mid-2025.

Kerry Logistics aims to establish itself as a direct competitor to major logistics providers, particularly in the parcel cargo sector. The company is expanding its distribution centers and integrating air cargo operations to better serve the Mexico-China route. Negotiations are already underway with key airports in Mexico, including the Felipe Ángeles International Airport (AIFA) and the airports in Guadalajara and Monterrey, to facilitate this growth.

Kerry Logistics is also focusing on e-commerce. We handle e-commerce shipments from the United States for major platforms like Temu, Shein, TikTok, and Amazon. Kerry Logistics will also develop new e-commerce warehouses, distribution centers, and last-mile delivery services in Mexico. The company is also working to strengthen its brand presence in Mexico, while expanding its reach across Latin America. We plan to open new facilities in Colombia, Chile, Argentina, and Central America, positioning Mexico as a central hub for Kerry Logistics’ operations in Latin America.

Kerry Logistics is an Asia-based, global 3PL with a highly diversified business portfolio and the strongest coverage in Asia. It offers several supply chain solutions, including integrated logistics, international freight forwarding, and industrial project logistics.