U.S. Xpress takes steps to further expand Mexico-based services
November 16, 2012
Taking steps to bolster its cross-border service into Mexico, Chattanooga, Tennessee-based truckload and full-service freight transportation provider U.S. Xpress Enterprises Inc. announced two Mexico-related deals this week.
Company officials said these deals are due in large to growing customer interest throughout Asia, Europe, and North and South America related to shipping to and from Mexico, coupled with shippers finding secure and reliable logistics services with decent pricing.
One deal involves the purchase of a 90 percent interest in Nuevo Laredo, Mexico-based Xpress Internacional, who provides border crossings and truckload transportation of U.S. Xpress trailer equipment throughout Mexico. U.S. Xpress and Xpress Internacional have been involved in a joint venture, which was established in 2007.
U.S. Xpress said its partnership with Xpress Internacional has grown to become a lead provider for gateway to and from north and central Mexico and the U.S., with more than 200 daily border crossings through Laredo.
U.S. Xpress’s partnership with Xpress Internacional was the culmination of a partnership of everything it has been working towards by putting a long-term business plan in place to take on controlling interest of that business, said John White, executive vice president, sales and marketing, for U.S. Xpress at this NITL-IANA TransComp exhibition this week.
“This has been very positive for us and our customers over the last five years,” explained White. “It has filled a solid need that our customers had and has become about a $120 million business unit for us. If you include both the U.S. and Mexico revenues we generate, it is about two-thirds U.S. and about one-third Mexico. It is a service that has been well-received by our customers.”
The second deal is the creation of a joint venture between U.S. Xpress and Logisti-K, a Monterrey, Mexico-based provider of cross-border and Mexican logistics services, which was established in 2002. U.S. Express said this effort will allow it to greatly increase its Mexico-based services, including warehousing and distribution, cross-dock, door-to-door, and end-to-end services, inventory management, order fulfillment, and domestic and international freight forwarding services via full truckload, less-than-truckload, intermodal, ocean, and air.
White described Logisti-K as a small company that has done a good job with its primary constraint being capital. He added that its partners at Xpress Internacional are the primary owners of Logisti-K and that U.S. Xpress is invested in the company as well.
“Logisti-K has access to about 3 million square-feet of warehouse space in the interior of Mexico, and they are doing some final-mile delivery on the consumer products side, are an NVOCC and an airfreight forwarder,” said White.
What’s more, in an effort to expand globally, White said U.S. Xpress will be going to Asia to see how it can most effectively tie its supply chain services from Asia into Mexico and from the U.S. into Mexico, plans which date back about two years for the company.
When asked about his company’s U.S.-Mexico freight flows and overall business conditions, White noted that the biggest challenge is the northbound to southbound balance is comprised of significantly more northbound freight and as customers are near-shoring or changing manufacturing operations, where they were once in Mexico and then Asia, many are now shifting back to Mexico.
“There are robust volumes and lots of demand,” he said. “The challenge for everybody is creating balance, and that is where I am hoping intermodal can help. If you look at Kansas City and Ferromex, they are putting money into the infrastructure in the interior of Mexico for intermodal and continue to grow. And as the infrastructure continues to get built out, I think you will see more growth in Mexico.”
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