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Grupo Logistics, the Mexican leader in integral logistics

Interview - February 13, 2013
Grupo Logistics, with 25 years of experience, has become the leader in its sector in Mexico, thanks to its ability to offer integral solutions, made to measure for the client. Company Director General Leopoldo Alcántara says Great Britain and Mexico have the potential to become allies because “one is a leader in the automotive sector, and the other, a leader in assembling vehicles.”
LEOPOLDO ALCÁNTARA, DIRECTOR GENERAL OF GRUPO LOGISTICS.
LEOPOLDO ALCÁNTARA | DIRECTOR GENERAL OF GRUPO LOGISTICS
What factors do you believe have helped Mexico to position itself as an economic power in Latin America and have made its economy one of the most attractive for foreign investors?
 
The government and the private sector have announced that GDP will grow at about 4% annually.  Trade will grow at about 8% and that means the logistics sector will probably grow at about 10%. In our organization, starting in 2012, we have seen a significant recovery. After the crisis of 2009 it can be seen clearly. In the case of the automotive sector, Mexico has already positioned itself as an important competitor in automobile exports, while in the agro-industrial sector, there´s an enormous movement of products towards the United States, as well as in the steel and electronic sectors, where there´s an significant recovery.
 
Prior to the year 2009, the world was very predictable. The big North American companies could evaluate the market situation and calculate the demand for their products. Thanks to this situation, it was in their interest to produce in China. But after the financial crisis of 2009, the market grew volatile and Mexico, which was somewhat forgotten by investors, was once again seen as an opportunity. Mexico is right next door to the United States, the world´s largest market, and can supply it immediately. It’s also worth noting that Mexico has become more competitive since the signing of the Free Trade Agreement (FTA).  
 
Being a leader in the logistics sector in Mexico and keeping in mind that China is your biggest rival in the American market, how do you see the future of the sector? What changes have taken place in recent years?
 
Mexico and China are direct competitors in some markets, but Mexico distinguishes itself by also competing in other sectors, in other economies that China has been losing. One example is the manufacture of large-volume pieces. Getting them to their destination requires a large number of maritime shipments, which increases the cost. Mexico is ready to compete in many sectors, such as manufacturing, automotive, metal-mechanics and agro-industrial, among others. In the agricultural market, it´s worth noting that in recent years, we´ve sold close to $24 billion to the United States in agricultural products. 
 
In 2008, the Secretary of the Economy launched a series of measures to improve competitivity and to position Mexico as a logistics platform. What´s your view of the achievements made from then until now?
 
There have been a lot of improvements, but not all the credit is due to the government´s efforts. The greatest credit in this area goes to the private sector, for going out and positioning itself in other markets and, most importantly, without government subsidies. The sector has faced some internal obstacles, such as the high cost of the motorways, which represent about 13% of the cost of an overland shipment. This does not improve competitivity.  In infrastructure, a lot of improvements have been made, especially in the maritime ports, and this supports commerce with the United States.
 
Another positive change that would help the commercial sector would be if the Federal Government were to give greater support to companies that set up in Mexico. Usually, these companies receive support only from the state governments and this makes a great difference in the development of the States. There are States with bigger budgets and others that don’t have so much, which makes for inequality.
 
Grupo Logistics has been in the sector for 25 years and has positioned itself as a leader in the transportation, importing and exporting of products, and customs services. It also has the best technological equipment and is constantly innovating. How did the idea of Grupo Logistics come about? How has it managed to position itself as the leader in the sector?
 
We began as customs agents and we took into account the experience of some Spanish companies that evolved towards logistics when Spain decided to become part of the European Union. These companies grew very fast, in contrast to those that remained only as customs agents. 
 
In 1995, with the growth of the logistics sector along with the Free Trade Agreement (FTA), we decided to go into international logistics. At the beginning, we had a customs agency and some trucks for transport within (Mexican) territory. Afterwards, we decided to incorporate storage companies in the United States and foreign transport and that´s how Grupo Logistics was created.
 
The sector had a boom up to the decade starting in 2000, when global companies with subsidiaries within (Mexican) territory increased their productivity.
It´s worth noting that what distinguishes us from other companies, as big as they may be, is that we design logistical solutions which are made to measure for the needs of our clients, while other companies have standard programs.  
 
Today we are a 4pl company, that means we design and operate tailor-made logistic solutions  for the needs of our clients. This has allowed us to work with global clients such as Costco, Bombardier, Femsa, Black and Decker, Palacio de Hierro and others.
 
What are the company´s internal strengths?
 
One of the qualities that distinguishes is from the giant companies is that we can trace products from their origin to their destination. We create an information technology platform that touches all the links of the transportation chain. The client can know where his product is and it´s even possible to trace it if it´s on a plane or on a ship in the middle the ocean. This is a philosophy that we have created. We think that by eliminating static inventories we will reduce costs and make companies more competitive. 
 
It´s well known that investments between Mexico and the United Kingdom are going to be promoted. How do you think this will benefit Grupo Logistics?
 
It´s a very interesting market. In Mexico, there are close to 1,000 English companies and we are a country with an enormous potential. One clear example is that, in spite of the mistreatment of the topic of internal security by the news media, the country has had stable growth. There is little foreign trade between the two countries and I think that the things that are needed are promotion, information and coming together, because between them, there is a potential to work together. One example is that England is a leader in the automotive sector and Mexico, in vehicle assembly. 
 
What message would you give to the reader of this report? Why would you recommend Logistics?
 
I would say that the recommendations of our clients support us and that our relationships with companies have been long-term. In addition, last year our clients entrusted us with transactions for a merchandise value of nearly $5.6 billion. 

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