CUSTOMS BROKERS

Mexico 2017 | TRANSPORT & SECURITY | B2B

Mexico's economy has been growing at a steady pace in recent years, meaning the need for reliable logistics has become a priority for many, in turn creating a lucrative market.

Justin Facey
JUSTIN FACEY
Regional Director
TIBA
Guillermo Padilla
GUILLERMO PADILLA
Director General
Grupo Padilla

How did you come to occupy this position in the market?

JUSTIN FACEY Mexico was the first country in which TIBA began operations outside of Europe. It will be TIBA's 20th anniversary in Mexico in 2017. I opened the first office here and hired our first employees. The company's evolution in Mexico has been fantastic. Today, TIBA is probably the star product and Mexico the main focus within the Romeu Group, our holding group and owner. Mexico is certainly the main focus for the future development of TIBA within the region. My area of responsibility is North America, Central America, and the Caribbean. We control the entire region from Mexico, including the US, which is quite an unusual structure. Today, we have offices in Cuba, Panama, El Salvador, and Guatemala. We have 10 offices in Mexico, with nearly 300 staff. The US will be our next area of development, where we now have four offices.

GUILLERMO PADILLA My father established this company 45 years ago. He started as a customs broker. After we graduated from university, my brother Marcelo and I went to work with him in the international business. Then, we started to grow as freight forwarders; we decided to start a transport business. Now, after 45 years, we have consolidated the group of services centered around international commerce. Previously, Mexican companies lacked technology and knowledge about international commerce and trade. Unfortunately, our balance leans more toward imports rather than exports. After NAFTA, we did not see as many problems because it was much easier to do business. A company only needed a truck to deliver cargo to the border and across the border there are warehouses in different cities; we received the cargo and moved it where it needed to go. However, the rest of the world had open trade with NAFTA, and for us it was a challenge to help Mexican companies bring cargo. That was the main reason we wanted to be here in this business. Now, our company brings technology to the companies to enable tracking via internet and phone applications to check their cargo. If a company does not have business on mobile, it is out. Our clients were nervous before about receiving their cargo, but now they can access tracking information any time via internet or mobile. The technology has changed our business immensely.

What major logistical changes have you seen in the country since arriving?

JF When TIBA first arrived here it was quite difficult to convince clients of the benefits of using a logistics operator. Most clients in Mexico were more accustomed to dealing directly with their customs broker, trucker, or airline, and trying to sort out the logistics by themselves. It took a few years for clients to come around to looking at a different way of doing business. We had to prove that using a logistics operator was beneficial to them. We are experts in our field of business; we control the parties involved, such as the shipping lines, customs brokers, airlines, warehouses, and truckers, and can filter them through for the client. We know whom we are working with and, due to the volumes we deal with, are able to negotiate better rates and conditions. Then we pass on these benefits to our clients. We do not just buy and sell freight like many of our competitors do—that is not our business model. We sit down with our clients and make sure we understand their problems, necessities, business model, and geographical constraints. Then, we provide a solution to these that makes economic and operational sense.

GP NAFTA changed everything. Everything began moving quickly and the ICT business grew. This has been the most important change; NAFTA caused international business to really take off in Mexico. I love the logistics business; taking cargo from one place to another and controlling every step in the chain is my forte. When we started as a customs broker, we had to work with different companies and freight forwarders. We saw problems and an opportunity to integrate all of the services. In the beginning, we formed contracts with third-party logistics providers; however, we decided to start our own companies to take control. Services, for us, are the most important piece. When there are several contracts with different companies, efficiency is lost. It is easy for us and for the client to communicate with one person who controls everything.