Increasingly producing and selling companies are opting to stick to their core functions and to outsource moving freight, distributing product and other activities involved in managing their supply chains.

Third-party logistics firms, or, for short 3PL companies, are performing such functions with greater frequency in the service of companies located the world. According to some estimates thirty percent of producing and selling companies in the US market utilize 3PLs, while the figure stands at about ten percentage points fewer in Mexico. Given the advantages that accrue to firms that outsource supply chain functions, the future of third-party logistics will be, without much doubt, characterized by healthy growth.

3PL service users enjoy important tangible benefits

Third-party logistics in Mexico will play a greater role in supply chain activities as the country’s manufacturing sector continues its expansion. For companies that want to concentrate on their manufacturing and leave non-core functions to another party in this realm, 3PLs offer users of their services several advantages:

  • using the services of a company that provides third-party logistics services in Mexico affords manufacturers the opportunity to take advantage of the flexibility and scalability that 3PLs can provide in the area of labor, for instance. Given variable workflow and production volumes, 3PLs can staff up or staff down to meet the specific needs of their clients as circumstances demand;
  • contracting with a company providing 3PL services in Mexico can also result in flexibility and scalability in the area of physical asset requirements. A third-party logistics supplier can flex up or flex down warehouse space, material handling equipment such as forklifts and can also alleviate the need for a manufacturer to tie up its cash in the acquisition and ongoing maintenance of such things;
  • seeking added-value services from a quality 3PL company in Mexico also spares manufacturers the expense required to purchase the most modern supply chain management software, as well as the cost related to hiring and training the appropriate IT talent in its use, up-date and maintenance; Software that falls into this category provides a capability to maintain optimal supply chain visibility from the shop floor to the customers’ intake dock;
  • using a third-party logistics company in Mexico provides added-value to manufacturers in the form of knowledge of the local market. 3PLs with a significant presence in the country have experience in ensuring compliance with Mexican Customs rules and requirements, navigating regulatory details that have to do with the movement of certain classes of products back and forth across the US- Mexican border and have a deep knowledge of Mexican business practices in general.

The entire length of the supply chain covered

In addition to outsourcing transportation and warehousing functions to providers of third-party logistics in Mexico, manufacturers will also contract with them in greater numbers in the future in order to receive expert service in other areas that are critical to the supply chain and its management. Some of these additional capabilities include:

  • freighforwarding
  • inventory management
  • cross-docking
  • packaging

Parties seeking further information, or with questions related services related to third-party logistics in Mexico, should consult with the experts at the Tecma Group of Companies.