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Home FEATURED

The Importance of First-Mile Logistics, a Perspective from Maersk

The company indicated that efficiency in this first segment has a significant impact on costs and delivery times.

T21 Media by T21 Media
9 July, 2024
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In the supply chain, the first mile is an essential component to guarantee the fluidity and integrity of the entire logistics operation , according to Maersk , a company that in recent years has opted to become a logistics integrator, by expanding its services. beyond maritime transport.

In an analysis document sent to the press, the company indicated that efficiency in this first tranche has a significant impact on costs and delivery times , in addition to strategically influencing end customer satisfaction and market competitiveness.

“For this reason, Maersk dedicates significant resources to optimize and strengthen its operations in this key step, implementing advanced fleet tracking and management technologies, as well as establishing strategic alliances with reliable and capable logistics partners,” said Matthieu Pfleger, Head of First Mile for Maersk México, cited in the document.

There he explains that the consolidation of the automotive industry has presented significant challenges for the logistics sector. The increase in transportation prices and rates, along with competition for land transportation services, has led many shippers to prefer land transportation over sea transportation, resulting in an increase of up to 40% in transportation costs. . These could be up to 100 percent.

Some of the causes include:

Nearshoring and the “super” peso: The relocation of companies and the strength of the Mexican currency until recently made shipments in the region more expensive. The sustained strength for months of the Mexican peso – whose trend was modified until a few weeks ago – against the dollar in the exchange rate caused Maersk to make decisions that improve profitability.

Armed conflicts: Attacks on commercial ships in the Red Sea have affected the availability of containers and vessels, raising shipping costs from China to Europe.

The security crisis: Several areas of Mexico face this situation and this has affected the transport union, who have been very clear in their demands, even carrying out blockades to make their situation even more visible, which has additionally generated interruptions on the routes. logistics making the operation difficult.

Challenges as an engine of change: the railway boom

Pfleger assured that “despite these challenges, the logistics landscape in Mexico offers exciting opportunities for innovation and growth. Optimizing rail infrastructure, implementing advanced fleet tracking and management technologies , and collaborating between key players in the supply chain can help overcome these obstacles and make the most of the potential of rail transportation, which has come growing since recent years.”

In fact, according to data from the Railway Transport Regulatory Agency (ARTF) , during the first quarter of this year an increase was observed in cargo transportation by railways in Mexico , moving 34.67 million tons, evidencing an increase of 3.9 % in relation to the same period of the previous year. In the specific case of Maersk Mexico, 160 thousand containers are transported annually by rail.

Maersk indicated that there is no doubt that the railway has gained prominence due to its efficiency , load capacity and sustainability compared to road transport. For example, land side volumes moved by rail have seen steady growth, increasing by approximately 5% to 10% year over year.

This is due in part to the railway’s efficiency and carrying capacity, as well as improvements to the country’s railway infrastructure. Furthermore, rail offers a more sustainable alternative compared to road transport, making it attractive from both an economic and environmental point of view.

“In pursuit of achieving our sustainability goals, at Maersk we focus on implementing efficiency measures and promoting the transition towards transportation modalities with reduced emissions, such as the use of rail. The company’s objective is very clear: to develop completely sustainable land transportation solutions by 2040,” said Pfleger.

This is how logistics in Mexico faces highly relevant current challenges, but these in turn entail opportunities for growth and innovation. By understanding the importance of the first mile and harnessing the potential of rail transportation, companies can improve efficiency and competitiveness in a globalized market.

Comment and follow us on X:@GrupoT21

Tags: CARGO TRANSPORTFIRT MILELogisticsMAERSKRAIL FREIGHT TRANSPORTSupply Chain

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