Automotive Logistics México Session 5: The Future of Mexican Automotive Logistics 24.01.2018 Elaboró: Carlos Lazzeri
Content 1. Bocar Group. Logistic Overview 2. Ground transportation 3. Sea Transportation 4. Railway Transportation 5. Security: Cargo Theft Report Freight Watch International 6. Global Logistic Index México (Benchmark) World Bank 7. Conclusions 2
Bocar Group Plastic Automotive Components / Systems Aluminum Automotive Components / Systems Injection Molding, Painting, Assembly and Welding. México City San Luis Potosí Toluca (Lerma) High Pressure Die Casting, Semi Permanent Mould, CNC Machining, Assembly, Heat Treatment, Prototypes, Design and Testing Chihuahua México City (HQ) Querétaro Saltillo San Luis Potosí Toluca (Lerma) 3
Manufacturing Sites Los Angeles Phoenix USA HUNTSVILLE San Diego Dallas Tijuana El Paso Hermosillo Ciudad Juarez Houston New Orleans CHIHUAHUA SALTILLO Monterrey Aluminum Automotive Components / Systems Cd. Victoria Gulf of Mexico SAN LUIS POTOSI Huntsville, AL, USA (2019) Chihuahua (1984) Mexico City (1967) Lerma (1991) Plastic Automotive Components / Systems Mexico City (1971) Guadalajara Silao QUERETARO TOLUCA (LERMA) MEXICO CITY Puebla Veracruz Cancún Queretaro (1995) Lerma (1997) Acapulco Belize Saltillo (2004) San Luis Potosi (2011) Guatemala San Luis Potosi (2010) Lerma IMD (2014) 4
Logistic and Technical Sites Global Sales and Engineering Offices AUMA Engineered Products, Detroit, MI USA AUMA Engineered Products K.K, Japan BOCAR GmbH, Stuttgart, Germany BOCAR GmbH, Wolfsburg, Germany Distribution Center AUMA Engineered Logistics, Manchester, TN, USA Laredo, TX, USA 5
Inbound Logistics LTL From suppliers in USA to Border (Laredo, TX / El Paso, TX) FTL From El Paso to Chihuahua FTL From Laredo to Saltillo, SLP, Querétaro, Lerma and CDMX LTL from European supplier to consolidation port FCL From Europe to México: Veracruz Port LCL From Asia to México: Manzanillo Port Airfreight to CDMX and Toluca airports 6
Outbound Logistics FTL to distribution centers in Laredo, TX and Manchester, TN FTL to customers sites in México LCL exports to Europe: Veracruz Port Airfreights from CDMX and Toluca airports 7
Ground Transportation: Routes and volumes LOCATION ANNUAL TRIPS Auma Chihuahua 8415 Fugra Lerma 3251 Bocar CDMX 3112 Auma Saltillo 2031 Bocar Lerma 1859 Auma SLP 1420 Plastic Tec Lerma 1016 Auma Tec Querétaro 876 Auma Estructurales 798 Plastic Tec SLP 428 Plastic Tec IMD Lerma 287 Plastic Tec CDMX 154 Fugra Suspensiones Lerma 64 Total Bocar Group 23711 8
Ground Transportation Actual Conditions: Effects: Poor Highway maintenance Long waiting time @ pay tolls Not prepared for severe weather conditions Poor reaction under emergencies Lack of planning and alternative routes during road maintenance Lack of information on road events Highway blocks Drivers shortage Empty returns no load available Impact on Productivity Waiting time Delays on deliveries Additional fuel cost Safety affected - High accident rate Extra freight cost due to delays Competitiveness lost Shut down risk 9
Sea Transportation Actual Conditions: Effects: Port capacity exceeded Weather conditions @ Veracruz port causing reschedules on the arrival date On top of Veracruz Port issues, German Ports are overloaded since last quarter 2017 Impact on Productivity Waiting time Delays on deliveries Extra freight cost due to delays Competitiveness lost Shut down risk 10
Railway Transportation Actual Conditions: Effects: Poor availability in México. High cost on the last mile transportation due to the distance between railway terminal and delivery point Not cost effective yet 11
Security: Cargo theft report 12
Security: Cargo theft report Freight Watch International 13
Security: Cargo theft report - Freight Watch International 14
Security: High Risk Highways 15
Global Logistic Performance Index World Bank Country Year LPI Rank LPI Score Germany 2016 1 4.23 Luxembourg 2016 2 4.22 Sweden 2016 3 4.2 Netherlands 2016 4 4.19 Singapore 2016 5 4.14 Belgium 2016 6 4.11 Austria 2016 7 4.1 United Kingdom 2016 8 4.07 Hong Kong, China 2016 9 4.07 United States 2016 10 3.99 Processes evaluated: 1) Customs 2) Infraestructure 3) International shipments 4) Logistic Competence 5) Tracking & Tracing 6) Timeliness Mexico 2016 54 3.11 Total Evaluated 2016 160 2.88 16
Global Logistic Performance Index World Bank Country Year LPI Rank LPI Score Mexico 2016 54 3.11 Country Customs Customs Infrastructure Infrastructure International shipments International shipments Mexico 54 2.88 57 2.89 61 3 Country Logistics competence Logistics competence Tracking & tracing Tracking & tracing Timeliness Timeliness Mexico 48 3.14 42 3.4 68 3.38 17
Conclusions Bocar Group main actions: Improve truck utilization by consolidation between plants Maximize use of round trips Restriction to Daylight circulation when possible Define and maintain safety stocks 3PL implemention improving service Country Support: Increase capacity on Ports Improve conditions and capacity on hihgways Reduce waiting time in pay tolls & customs Reduce process time in customs Increase use of technology for safety Increase railway network 18