Justin Facey
Regional Director
TIBA Mexico
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View from the Top

Solving Complex Oil and Gas Transportation Challenges

Wed, 01/21/2015 - 11:40

Q: What services has TIBA created or adapted to satisfy the oil and gas sector’s logistics needs?

A: TIBA offers many services related to customs, imports, exports, airfreights, sea freights, and project cargo. We created a specific division for the oil and gas industry, with engineers who are both specialized in project cargo and who know the oil and gas business very well. We offer a 24/7 service, which is crucial, as cargo does not obey a 9-5 schedule, and we are making sure that our people, who are one of our main assets, are well trained in shipping terms, insurance, market trends, or customs reforms.

Q: What flagship projects has TIBA executed in the Mexican oil and gas industry?

A: We have been moving explosives in and out of Mexico for the mining and oil and gas industries on a regular basis, which is a very complex area. Our competition often faces problems with such shipments or getting the right aircraft to move them. TIBA has these contacts, allowing us to successfully move large amounts of explosives all around the world. We have also completed projects such as the moving of a cement plant from Mexico to Cuba and transporting a submarine from Northern Europe to the Caribbean, loading vessels, and managing entire logistical processes for the oil and gas industry.

Q: What is your assessment of the legal framework created by the 2013 Customs Law?

A: There are certainly advantages that are already being exploited, but the actual Customs Law is not fully defined yet. There are several aspects which have not even come into force. This lack of definition is a little disconcerting because there is a clear need to make imports and exports into Mexico much easier. It has been proven throughout the world that if fewer barriers and customs tariffs are in place, the easier it is to move goods in and out of a country, generating more business. Mexico projects itself as a hub for many industries, but these issues will have to be addressed in order to make that vision a full reality. The Energy Reform could very well turn Mexico into a hub for the oil and gas industry. It has major geographic advantages, but it remains difficult to use the country as a hub, as it is relatively expensive to move goods in and out compared to its regional competitors.

Q: What is your reading of the stabilization of imports into the country during 2014?

A: Imports into Mexico became stronger or weaker for specific sectors during 2014. The automotive sector continues to be very strong as it has regular volumes of cargo coming in and out of Mexico. On the other hand, consumer goods are not doing so well. Some shipping lines did blank sailings last year or cancelled their vessels completely due to a lack of supply within the market. These are perfectly normal practices when there is not enough volume to fill the vessel. However, the oil and gas industry moves its parts and machineries through FCO, and when vessels are cancelled or when freight costs increase and decrease, the situation becomes much more complex. Problems surfaced repeatedly in 2014 due to a lack of space and changes in prices, especially among Asian shipping companies. It is our job to try and solve these problems as a logistics operator, but it is becoming very challenging.

Q: How does TIBA grant savings to its customers, considering the volatility of shipping tariffs?

A: TIBA is a serious company that works with serious companies as well. We maintain very good long-term relationships with shipping lines, airlines, and trucking companies, which allow us to help each other out when either side faces a problem. Our main strengths are based on our worldwide volume, not just in Mexico, despite this country being one of TIBA’s largest operations in the world. It is by consolidating our contacts that we are able to come up with plans that save money for our clients.

Q: What are TIBA’s growth expectations for the oil and gas segment in the medium term?

A: We are expanding in the oil and gas segment in Mexico and around the world. We have plans to expand our oil and gas division in the country through a number of offices, while also expanding across Latin America. We will cover all of Central America by early 2016, and we already have offices in Panama, Guatemala, El Salvador, and Cuba. This will go alongside an expansion in South America, where we have offices in Argentina, Chile, and soon in Peru. TIBA is certainly growing a lot in many different areas, but oil and gas is one of our strategic priorities.