Small businesses boost UPS Mexico Operations
Demand from small and medium-sized companies is helping shipping giant United Parcel Service Inc. (UPS) post double-digit sales growth in Mexico, company officials said Monday.
During the first quarter, UPS’ export business sales from Mexico, the company’s biggest Latin American market, grew by 30% versus the like-2004 quarter, building on a 60% annual expansion last year.
“We have positioned the product with companies that used to have their own trucks,” Luis Arriaga, head of UPS Mexico, said in an interview. UPS has also gained customers from other transport companies, he added.
“The product is actually tailor-made for any type of need that you might have,” Arriaga said, listing party favors like pinatas, electronics and automotive parts as examples of recent shipments out of Mexico.
Shippers like UPS can help streamline exports for companies with little experience or interest in arranging cross-border shipments, in some cases combining several small orders into one container.
“Our goal is for small businesses to concentrate on what they do, not manage inventory and distribution,” said Jose Acosta, operations manager for UPS in Latin America and the Caribbean.
The UPS officials declined to say what stake they have in the market, or what sort of volumes they operate in and out of Mexico.
Competitor DHL, a unit of German logistics and mail company Deutsche Post World (DPW.XE), estimates the express delivery market in Mexico is worth about $2.1 billion a year.
Much of the international shipping market from Mexico is to the U.S., which absorbs close to 90% of Mexican exports. Last year, Mexico ran up a $55.5 billion trade surplus with the U.S., with exports of $165.1 billion and imports of $109.6 billion.
David Abney, president of UPS international, said such two-way flow is extremely important to the company.
“Wherever global trade leads us, we will go. But balanced trade is extremely important to us,” he explained.
“As exports from China to the U.S. greatly outnumber imports, that plane we or anyone else flies out of China will be full, and going back it’ll be less full,” he said.
-By Amy Guthrie, Dow Jones Newswires; (5255) 5080-3453;
(END) Dow Jones Newswires
06-27-05 1949ET
