In Mexico and Beyond, Ryder Keeps on Growing

May 7, 2008
Ryder's experience reflects the growth of a new market.

Veteran logistician Eugenio Sevilla- Sacasa, Ryder’s vice president & managing director for Latin America, has run a gamut of experience within the organization from A to Z.

He joined the company in 1983 as a financial analyst and was next promoted as the corporate planning director. Then, in 1995, Ryder decided to extend business internationally with operations in Latin America and Asia.

“I raised my hand and said I would like to do the start up in Mexico,” says Sevilla- Sacasa, popularly known as “Gene” within Ryder. “I was given the opportunity to do just that and I started selling in Mexico with just paper and pencil. Since then, we’ve sold a lot and have made many investments and fortunately now have many customers and employees. The truth is we are doing very well in this market.”

In those early years efficient logistics operations were not fully developed within Mexico or Latin America. However as they came to understand the market potential all American logistics companies jumped onto the bandwagon to get their share of the burgeoning market brought about by the North American Free Trade Agreement (NAFTA).

While Ryder’s impressive reputation in transportation was a plus, the company’s major asset was Sevilla’s knowledge of Mexican business culture and its language. Educated at the Monterrey Institute of Technology, he had friends who’d made careers for themselves with some of North America’s largest manufacturers, companies like General Motors.

“We began with GM,” recalls Sevilla. “Slowly we penetrated the market acquiring accounts like Hewlett-Packard and many others that we now have. We won them because they were looking for service levels they hadn’t managed to get with other logistics operators. We were able to put our knowledge of advanced logistics principles to work in Mexico.”

While simple sounding, the work wasn’t all that easy. Just as notions of advanced logistics were not fully developed, personnel to make them work wasn’t available. A solution was to hire many well-educated young men and women to continue their education at Ryder with the idea of building the experience into a career.

“For example, we provide them with a knowledge of information technology,” claims Sevilla, “The result is that we’re offering a valuable package to our customers that gets us more of their business. It also allows us to garner other customers.”

By 1998, the company got what Sevilla calls “the big push forward,” when Ryder landed the Delphi account located in Ciudad Juarez, just across the border from El Paso, TX. Even today Delphi operates the largest maquiladora (in-bond manufacturing) operation in Mexico, more than 100,000 employees in 80 manufacturing facilities throughout the country.

As cargo volumes for Ryder grew geometrically they brought a huge need for increased warehousing and transportation. As a foreign owned company, Ryder is not permitted by Mexican law to own trucks. The challenge was to fulfill the company’s commitments to its newly acquired customer while meeting the country’s legal requirements.

Sevilla’s first step was to contract with Mexican carriers to move materials from the United States to the 35 plants Delphi had at the time. About a third of the facilities were in Ciudad Juarez with the remainder further from the border in several different states.

Through dint of its service Ryder won the entire Delphi account with operations at the Laredo border, the hub of the NAFTA highway. Ryder is now charged with taking raw material to the Mexican assembly factories, then returning finished product to warehouses Delphi has both in El Paso and Laredo, Texas. From there product is distributed to Delphi’s customers across the US.

Ryder has now fully expanded operations along the border and is handling some 4,000 truck crossings a week from California’s Otay Mesa border with Tijuana to the Matamoros/Brownsville- Harlingen/Reynosa border along the Gulf of Mexico coast.

Through the experience of outsourcing its transportation needs, Ryder Mexico has developed new skills in solving delivery issues and has attracted valuable transportation companies as partners.

“We use our logistics experience to organize transportation to cut down on costs,” explains Sevilla-Sacasa. He has also learned important lessons and developed a profitable side business that was not on the company’s original agenda.

“Ryder has made a major investment in Mexico in transportation equipment,” notes Sevilla. “We have around 500 trucks, but don’t manage them. We lease them to private companies. When a carrier needs equipment, we rent them those assets. That’s how we managed to increase our investment in Mexico, through renting equipment.”

This is an especially good service for carriers who lack investment capital for trucks. Working with the company they are able to rent well-maintained trucks that are in good shape, which are the property of Ryder de Mexico.

Efficiency begets more work. In 2002 Ryder was ready to pursue business further to the South, into the rest of Latin America. Of course Gene was put in charge of expanding operations to Brazil and Argentina.

Those were “difficult moments,” he recalls, given the fact that Argentina had just undergone one more of a myriad of financial and political crisis. However Sevilla- Sacasa has managed to sail through troubled waters “and both Argentina and Brazil now represent important growth business for us.”

In 2005 he opened operations in Chile. Expansion is now part of the language Ryder uses when talking about South America. “We’re now exploring opportunities in Uruguay, Colombia, Panama, Puerto Rico, and Peru, ” says Sevilla- Sacasa. Expectations are to tackle “one country per year” within Ryder’s growth plans for the next five years. “Dreaming big is cheap, so we dream big and are moving along,” notes Sevilla.

Some 12 years ago, the most difficult task at hand was finding the right people. “But our advantage now is that in Mexico we have more than 1,500 logisticians,” he claims. “We have very competent people who want to move internationally. If we have the openings, they’ll go to those who we know are competent, those people who can get the job done.”

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