Below is an excerpt from the sponsored special report “Delivering the Goods,” a feature in Internet Retailer Magazine covering technologies that can improve e-retailers’ fulfillment and delivery options. Internet Retailer is an objective provider of information regarding the market trends, technology, competitive practices and people that are shaping the e-commerce industry.
Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico.
With e-commerce sales in Mexico projected to reach $6.7 billion in 2019, up from $2.8 billion in 2014, according to Forrester Research Inc., Mexico can represent a potentially attractive sales opportunity for U.S. e-retailers. Many U.S. e-retailers, however, don’t ship south of the border because they consider the administrative, regulatory and logistical issues too big a headache to make it worthwhile.
Frequently cited speed bumps when shipping to Mexico include filling out the paperwork to clear customs, uneven delivery coverage across the country and regulations preventing packages from being left on doorsteps when consumers are not home.
“A lot of U.S. retailers don’t fully understand how to ship to Mexico, so they don’t do it,” says Christian Bruns, CEO of Estafeta USA, a provider of freight, express shipping and parcel delivery services in Mexico. “Consequently, Mexican consumers that want to buy products from U.S. retailers either can’t or have to make their own arrangements to have a purchase shipped to Mexico, which can be costly.”
E-retailers wanting to ship to Mexico can send an order placed by a Mexican consumer directly to Estafeta’s warehouse in Laredo, Texas. Once the order arrives at the Laredo facility, Estafeta clears the package through customs, prepays all duty and delivery charges then delivers the item to the customer in Mexico.
Alternatively, if an e-retailer does not want to deal with customs, duty and delivery in Mexico, it can refer a customer to Estafeta’s website where she can open a pre-ship U.S. delivery address at Estafeta’s Laredo facility. Customers that have set up a pre-ship U.S. address provide it to the retailer at checkout. In this instance, the customer is responsible for paying all duty and delivery charges. Duty is typically paid upon receipt of the package.
Estafeta will deliver anywhere in Mexico through its nationwide delivery fleet of more 1,500 vehicles.
“It’s a simplified process that removes the barriers to shipping to Mexico for retailers in the U.S.,” Bruns says.
Customers not home at the time of delivery are left a notice of the delivery attempt. If the customer does not expect to be home during the next scheduled delivery, she can arrange to have the item delivered to one of Estafeta’s 1,150 branded retail stores where she can pick it up at her convenience. Estafeta reaches 98% of the Mexican population, giving it the broadest delivery network in Mexico, Bruns says.
“While there are U.S. parcel carriers that service Mexico, what sets Estafeta apart is that we offer a variety of delivery options for e-retailers to have their products shipped to Mexico and delivered anywhere in the country,” Bruns says. “We turn delivery to Mexico into a competitive advantage.”
Mexico offers a wealth of business opportunities for companies in the United States. The country’s strategic location makes the market easily accessible, and free trade agreements (NAFTA) simplify the complexities that come with doing business in another country. Additionally, Mexico’s low cost of labor provides U.S. companies with a cost-effective way to manufacture and export goods.
Increasingly, companies within the United States are taking notice of the advantages presented by Mexico. One of the largest industry sectors currently moving into the market is the U.S. auto industry. Leading car manufacturers across the United States have been taking an interest in Mexico; last year, Honda and Mazda began production at plants in Mexico, and General Motors pledged to invest almost $700 million in their Mexico facilities. In 2014 alone, Nissan, Kia, and BMW pledged to invest $1 billion each to build auto-assembly plants in the country, and in April 2015 Toyota announced a $1 billion plant to be built in the central Mexican state of Guanajuato.
With the biggest car manufactures in the country moving their manufacturing operations south of the border, Mexico is on track to overtake Japan and Canada as the United States’ number one source of imported cars by the end of 2015. On Friday, Ford Motor Corporation joined the growing list of U.S. auto manufacturers moving in to Mexico, with the announcement of a $2.5 billion investment to build two new plants for developing fuel-efficient engines and transmissions in Chihuahua and Guanajuato, respectively.
“Ford is making a significant commitment to our business in Mexico with investment in two new facilities, while aiming to make our vehicles even more fuel-efficient with a new generation of engines and transmissions our team in Mexico will build,” Joe Hinrichs, Ford’s President of The Americas, said in a statement. “These new engines and transmissions will help deliver even better driving experiences and fuel economy gains for customers around the world.”
Ford will allocate $1.1 billion to the new engine facility, which is being built within Ford’s existing Chihuahua Engine Plant, an expansion which is projected to create 1,300 new jobs. Additionally, a $200 million investment, as well as the creation of 500 jobs, will be allocated to the expansion of Ford’s current I-4 and Diesel engines production in Chihuahua. The remaining $1.2 billion will go towards the building of a new transmission within the premises of transmission supplier and longtime partner Getrag, in the State of Guanajuato.
“Today’s announcement is an important milestone in Ford’s 90-year history in Mexico,” said Gabriel Lopez, Ford of Mexico’s president and CEO. “Currently within Ford, Mexico is the fourth vehicle producer, the fourth largest engine producer and is the second largest nation supplying Ford’s global manufacturing facilities. We look forward to delivering even more great products, including new engines and now transmissions, to serve Ford customers around the world.”
Estafeta USA offers several logistics solutions tailored to the auto industry which aims to increase the efficiency of the supply chain process. Contact a cross-border logistics consultant today to learn more about how Estafeta USA can tailor their logistics services to meet your manufacturing needs.
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Recently-released numbers from the U.S. Transportation Department show the amount of freight moved between the United States and Canada and Mexico in 2014. According to the figures, freight transportation rose for the first 11 months of 2014, with overall NAFTA freight movements increasing 4.5% in that time period.
Overall, freight moved by truck saw the largest year-over-year cross-border increase. Between the United States and Mexico, freight moved by truck increased 4.3% between 2013 and 2014. Additionally, trucks carried the majority of the $43.9 billion of freight which was moved to and from Mexico during this period, at 67.6%.
Currently, Mexico remains the United States’ third largest goods trading partner, after Canada and China. Canada experienced a year-over-year decrease of freight moved in the majority of areas; only freight moved by vessel saw an increase, at +.2%.
Estafeta USA provides comprehensive, LTL freight services for business looking to ship to their customers in Mexico. To learn more about how our services can help grow your business, contact one of our cross-border logistics consultants today.
AT&T, the second-largest U.S. mobile phone carrier, has completed its $2.5 billion acquisition of Mexican mobile operator Iusacell. The acquisition, which was announced in November, includes all of Iusacell’s wireless properties, including licenses, network assets, and retail stores, and will net AT&T a total of 8.6 million subscribers.
The deal, which comes on the heels of telecommunications reforms in the country, is part of AT&T’s overall plan to expand in to Latin America. Iusacell, Mexico’s third largest wireless operator in Mexico, offers wireless service under the Iusacell and Unefón brand names, a network which encompasses about 70% of Mexico’s approximately 120 million people. In November, AT&T announced its plan to expand this network further to include additional consumers and business of Mexico. Additionally, the acquisition will allow AT&T to create the first-ever North American Mobile Service area, covering over 400 million consumers and businesses between Mexico and the United States
The acquisition announcement follows a historic year for Mexico and the country’s economy: In 2014 Mexico President Peña Nieto signed in to law legislation which ended PEMEX’s monopoly on oil and set the stage for foreign investments; growth in agriculture, industry, and construction, coupled with a record-breaking auto industry propelled the economy forward in the third quarter. In January 2015 Gerardo Gutierrez Candiani, president of Mexico’s Business Coordinating Council (BCC) said that the business community expects the economy to grow 3.5 percent in 2015.
According to Randall Stephenson, AT&T chairman and CEO, the country’s economy was a direct factor in the decision to procure the mobile carrier.
“Our acquisition of Iusacell is a direct result of the reforms put in place by President Peña Nieto to encourage more competition and more investment in Mexico. Those reforms together with the country’s strong economic outlook, growing population and growing middle class make Mexico an attractive place to invest,” he said in a statement.