Meeting the Mark in the Mexican Market and Beyond

How quickly FedEx Mexico continues to grow is just one more sign that trade with the US is noticeably climbing on a daily basis. For years the courier company has run a highly competitive campaign aimed at attracting smaller exporters to use their services to move their goods to final destination.

FedEx business prospects have been improved even more now that it can move bulk cargo for export via Mexican roads to the US border. However this has come about only after a tough court battle with the Mexican Carriers Chamber (Canacar) that had accused FedEx of cabotage. A judge finally decided that transporting merchandise overland for export was not cabotage, awarding FedEx the right to transport bulk shipments on its trucks.

“Now we can carry customers’ exports to the US border. At that point we can then chose road or air transport for final delivery in the US,” notes the FedEx director of Planning and Management for Mexico and Latin America, Eduardo Lopez. To date, he adds, the company hasn’t chosen to use rail transport.

The FedEx customer attraction program is one in which the exporter has little more to do beyond selling the merchandise abroad and collecting for it. This has been eased through a program set up by the federal government called “PyMEx.” It’s aimed at serving small and medium size industries and has already garnered thousands of smaller-sized customers. The FedEx PyMEx program began seven years ago, and has paid off richly. Workshops for newcomers involve local government participation and incentives. Matters taught include creation of an export business plan, export benchmarking, product adaptation for foreign markets, packaging and other matters related to product readiness for shelf life.

Increases in the FedEx customer base have required constant upgrading of the company’s assets which includes a yearly analysis of its entire trucking fleet. “Every year we assess our fleet with an eye to depreciation,” explains Lopez. “We factor into our analysis yearly growth in business and that helps us conclude how many new units to acquire and how many to discard.”

Export and import volumes have seasonality. At times, “we do outsource transportation,” Lopez continues. “One of our competitive advantages is that we take control of all aspects of shipments, something our customers greatly appreciate. We offer a complete supply chain management solution to the customer, offering a one-stop-shop solution.” Customers have visibility into shipments from pick up to delivery.

As FedEx has gained insight into Mexican shipment volumes and seasonal fluctuation it has been able to reduce requirements for outsourcing transportation. “Generally we are ready with the vehicles to be able to meet demand requirement,” says Lopez.

He works out of offices in Mexico City. From there he oversees operations at the FedEx Toluca Airport facility, 50 miles southwest of the city. The carrier has had its own hangar and cross docking operations at Toluca for a number of years. The company also manages four other hubs at Guadalajara and Monterrey, as well as Cancún and Mérida in the Yucatán peninsula.

Lopez also has responsibility for operations in the five hubs and Central and South America, all handled from his office in Mexico City.

Success for FedEx Mexico is enabled by its execution of expansion and continuous improvement projects. “Air carriers report to me offering a great deal of data that enables me to develop strategies that reinforce competitiveness,” claims Lopez. “It’s absolutely key to living and surviving in the global village.”

Lopez’s job requires a different perspective for operations in Central America where “transportation requires increased value added service,” he notes. A case in point is Guatemala, where the company performs all related operations.

Services originating in Mexico extend to the seven Central American nations—including Belize—where FedEx has representatives. Mexican operations also have geographic responsibility for South America’s Andean region. Coverage comes through a fleet of widebody planes that service Mexico on a daily basis.

“We have one plane flying to Toluca, and another to Guadalajara,” notes Lopez. “ They both fly six days a week. We also have two 727s flying daily to Monterrey and one smaller plane for regional coverage. Most of our exports are handled by plane.”

Dealing with US and Mexican Customs red tape is part of Lopez’s daily life. Such dealings are sometimes more difficult than the work of physical pick up and delivery of the goods, claims Lopez. With the workshops FedEx has managed to instruct customers on the proper way to fill out e-manifests in order to avoid delays at the border.

Just-in-time deliveries continue to be a priority for most customers, explains Lopez. “A shipment requiring a one-day delivery may take two,” he recalls. Such a delay puts the FedEx team into motion to fulfill the customer needs. This is particularly true, says Lopez, with assembly parts moving in and out of the bonded maquiladora factories in Mexico. All of them work with a no inventory, just in time, industrial philosophy.

“All in all,” concludes Lopez, “we work daily trying to offer a wide variety of services, both north and the south, in order to meet every customer demand.”

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