The manufacturing industry and exports  from Mexico are booming. The country is one of the top logistics hubs in the region and is increasing its transportation and infrastructure capacity.

With the strengths of the supply chain for the productive industry, there are still challenges to choosing the third party logistics providers (3PL) with best performance. You may make the most of the Mexican supply chain capacity, but export managers need to find the right partner.  

According to the World Bank, “Logistics performance is about achieving reliability of supply chains linking economies to markets. In the most constrained countries, the needs focus on infrastructure or critical improvements in customs and border management.”

The World Bank’s Logistics Performance Index (LPI) shows that Mexican standards in supply chain and logistics are above the average of Latin America and the Caribbean, and follows Panama and regarding the performance of its supply chain in
• The efficiency of customs and border management clearance.
• The quality of trade and transport infrastructure.
• The ease of arranging competitively priced shipments.
• The competence and quality of logistics services—trucking, forwarding, and customs brokerage.
• The ability to track and trace consignments.
• The frequency with which shipments reach consignees within scheduled or expected delivery times.

Mexico ranks 7 among the top performing upper middle income economies in the World Bank Logistics Performance Index.

Domestic performance: choose your partners well

In domestic logistics performance, the World Bank uses four factors:
• Infrastructure.
• Services.
• Border procedures and time.
• Supply chain reliability.

Mexico exceeds some standards of the region but lays behind in other ones. Even though its domestic supply chain distances are over 1,600 kilometers for land transportation, and over 200 kilometers for port transportation.

  • Its average lead times for imports and exports are lower or equal than the regional average.
  • They have low clearance times with or without physical inspection.

However, some procedures and operations need both improving and finding the right 3PL companies in Mexico:

  • 42.86% of respondents consider a high level of warehousing or transloading charges.
  • 28.57% evaluate the competence of road forwarders as high or very high
  • 14.29% rate the quality of customs agencies as high of very high.
  • 28.57% consider the quality of consignees or suppliers as high or very high.
  • 57.14% found the clearance and delivery of imports, transparency of customs clearance and timely information on regulatory changes as often or always efficient.
  • 67% can choose the location of the final clearance

Supply chain reliability is a primary concern.

That’s why choosing the right partner for integrated supply chain management in Mexico is critical.
In that regard, according to the Global Supply Chain Institute from the University of Tennessee, third party logistics  are evolving from tactical providers of transportation and warehousing services, to “collaborative partners providing a wide range of products.”

Their report claims that the best 3PLs:

  • Use tools such as Lean management and the latest technology to create continuous improvement.
  • Have a state-of-the-art warehouse management system, transportation management system, and other system capabilities, all of which contribute to greater efficiency.
  • Have state-of-the-art network optimization capabilities to select optimal warehouse locations and better manage omnichannel flows.
  • Have real-time tracking and event management managing risk in the global supply chain.

So, following the logistics performance index, ask yourself about your 3PL provider:

  • How do they help you make customs and border management more efficient?
  • What kind of infrastructure do they manage?
  • How competitive are their prices?
  • How competent are their trucking, forwarding, and customs brokerage?
  • How do they to track and trace consignments?
  • How frequently do their shipments reach consignees within scheduled or expected delivery times?

When you’ve located a supplier, who has the management capacity and expertise to secure the best logistics performance available in Mexico, never let them go.

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 How do you rate the performance of your current 3PL suppliers?