Mexico City, January 29, 2015 – The first Automotive Logistics Mexico conference saw more than 350 delegates discussing how best to manage the country’s vehicle production and export growth. Officials from the economy and transport ministries, the US ambassador, and senior executives pointed to economic and supply chain strengths, as well as weaknesses in infrastructure and education.

Government officials, along with rail and port providers, pointed to significant investment plans and network designs that should help improve logistics. The conference’e keynote speaker, Ildefonso Guajardo, Mexico’s Secretary of the Economy, highlighted a new government ‘masterplan’ that has identified needs and planning for logistics infrastructure, including better integration with the US for border crossing, increasing rail and port capacity, as well as developing the south of the country.

“There is an expansion plan for the port of Lázaro Cárdenas, and a new terminal is being built in Veracruz, while we also have a plan for the south,” he said. “A lot of money is being committed to infrastructure for the remaining four years of this administration.”

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Among the positives revealed at the event, the conference demonstrated willingness on the side of many stakeholders in the automotive supply chain, including both government and industry, to work together to improve logistics, and make progress towards bridging the gaps between the many different Mexicos.

The participation and interest from the government, in particular, was more evident in Mexico than it has been at other Automotive Logistics conferences.

That did not prevent executives from pointing out where the government should be acting with more urgency, particular around key infrastructure such as rail and ports. For example, although Mexico’s railways were privatised in the 1990s, and are today operated mainly by Ferromex and Kansas City Southern de Mexico, the government still has authority over many aspects of track infrastructure.

Raymundo Garza, head of purchasing for General Motors Mexico, said that the government should do more to address rail and road issues. “We have been having a lot of meetings with the government to address growing shortages in rail infrastructure,” said Garza. “They know what they have to do, and they have to move faster.”

“The government has got to make decisions faster,” added Chris Styles, senior director of logistics for Nissan North America. “We’ve seen this growth coming for years, and we’ve been talking about it.”

But others also emphasised the importance of the industry working together to address common issues, whether in collaboration with officials or private operators. XPO Logistics’ Julie Luna said that there needed to be partnership with customs brokers, third party providers and manufacturers, along with more dialogue in the supply chain.
“There is additional time there to be picked up,” she said. “There are ways of doing business right now that could be changed if we just had more open dialogue across the supply chain.”

Examples she gave included third party providers working to understand how to streamline border crossings as more Mexican truckers were allowed into the US. She also highlighted opportunities for moving more freight within Mexico by rail, including expanding services on the Pacific coast, as well as exploring opportunities to move empty sea containers between the east and west coast by rail to increase shipping capacity.

GM’s Sandoval also highlighted the opportunities of working together with other OEMs and industries to improve network and logistics utilisation, including sharing crossdocks and logistics assets. “We are running a pilot test in San Luis Potosi with another OEM, and are in talks with another one here in Mexico,” he said. “We don’t want to run a standalone network, but find opportunities also with tier suppliers.”

Ford Mexico’s MP&L director, Rafael Lopez, said that he saw important gains to be made by working more closely in partnership with logistics providers. “In Mexico, Ford has the strategy to work with lead logistics providers in inbound, in-plant and finished vehicle logistics,” he said. “The providers have an improvement opportunity when there is a new model launched or new operations. We need to work more closely with 3PLs.

“I would like to add that our vision for future is that we don’t look for suppliers, but rather for business partners,” he continued. ”We are asking for services in which these providers are the experts. We have preventative systems in place in production, such as andon cords, and we want the same mindset for the 3PLs.”

The industry also looks set to benefit from more US-Mexico collaboration, both at the border and beyond. The US ambassador, Anthony Wayne, encouraged delegates to communicate their issues in logistics and supply chain to him and to other business-focused associations, such as the US-Mexico Chamber of Commerce.

“The challenge that we face is that we can’t work if we don’t hear about issues, so contact us and identify things that are important to you,” he said. “There is a lot that we can do together, as the working relations between the US and Mexico have never been better.”

To read the full report of the Automotive Logistics Conference, please visit the website: