Blog

Mexico on board courier services driven by automotive sector boom

December 3, 2015

This week we take a look at why Mexico is one of the most exciting emerging markets for on board courier shipments – fuelled by the acceleration of the country’s automotive manufacturing industry.

Mexico’s low labour costs, favourable trade agreements and obvious geographical advantages make it a highly-attractive option for automotive manufacturers looking to gain the edge in a competitive global market.

Specialist logistics services are set to be in higher demand than ever before following another year of big announcements as international automotive industry giants shift their manufacturing operations to Mexico.

In November, Korean manufacturer Kia Motors announced it has concluded construction on its first plant in Mexico - a state-of-the-art facility in the municipality of Pesquería in the state of Nuevo León. The Kia Motors Mexico Plant will have an annual production capacity of 300,000 vehicles - approximately ten per cent of Kia Motors’ total global manufacturing output.

Elsewhere, Japanese giant Toyota revealed it is to invest $1 billion on a new Corolla factory in Mexico – scheduled to open in 2019 in the state of Guanajuato.  The plant will employ approximately 2,000 team members and have the capacity to produce 200,000 units annually.

Shortly after, Ford Motor Co also announced a further $2.5 billion investment in Mexico in the form of new engine and transmission plants in the Mexican states of Chihuahua and Guanajuato, respectively.

Other manufacturers including BMW, Mercedes-Benz and Audi are also making announcements of their own and increasingly turning their attention to Mexico, where they join manufacturers such as Ford, GM, and Volkswagen.

According to Nikolai Bergmann, Global Business Development Director at Chapman Freeborn OBC, Mexico is fast becoming a key market for automotive related hand-carry courier shipments:

“We’re seeing significant growth in terms of demand for on board courier shipments to Mexico. The boom is creating substantial opportunities for logistics services – particularly from the second-tier manufacturers that supply components to the major automotive companies.”

With suppliers expanding their operations to keep up with the rising demand, automotive cargo movements are becoming increasingly common – particularly from the US, but also key overseas markets in Europe and Asia.

Among the top destinations for on board courier shipments are Mexico City (MEX), Querétaro (QRO) and Del Bajío (BJX), as well as hubs like Chihuahua (CUU) and Monterrey (MTY) in the north of the country.

According to Bergmann, the company’s largest on board courier shipment to Mexico so far has been a 4,800kg shipment of car locking mechanisms from Europe to Mexico City - transported on a single scheduled flight by a team of dedicated hand-carry cargo couriers.

“There is sometimes a mistaken belief that on board couriers can only be used to transport a single item, or a small number of packages. When we do flight operations for automotive industry clients we’re regularly contracted to move larger shipments – sometimes totalling more than 50 boxes.”

When it’s not possible to transport parts as hand-carry cargo, aircraft charter solutions are another solution turned to by freight forwarders and automotive shippers looking to transport cargo to and from Mexico.

“Our US-based cargo charter team is also extensively involved in supporting the automotive sector in North America and Central America. It’s a very fast-moving industry and factors such as speed and reliability are the most important thing to the end client – whether the cargo is moving by hand-carry or charter.”

Bergmann believes this demand will only get more intense in the coming years:

“Mexico's automotive sector is growing at a rapid pace which is inevitably creating opportunities for logistics specialists. In the next five years it is set to overtake South Korea in terms of the number of assembly lines operating – so it’s a market the whole industry is now paying attention to.”