The American UPS described the purchase of Estafeta as a great victory for the company , a transaction worth more than one billion dollars , which will allow them to consolidate themselves as leaders in North America and face relocation.
“By combining end-to-end services and connecting it to the global reach of our network, we will improve our logistics capabilities. It further supports customers who are manufacturing and distributing closer to the United States,” said Carol Tomé, president and CEO of the company in a call with analysts.
He explained that this purchase fits into its nearshoring strategy and will improve its capacity in cross-border solutions, which has experienced double-digit growth.
It is worth remembering that the day before, UPS announced that it has entered into an agreement to acquire the Mexican parcel services and logistics projects company , an action that is a key piece in its strategy to expand its presence in Mexico.
The acquisition of Estafeta by UPS is still undergoing evaluation by Mexican antitrust authorities.
Ricardo Kumar Dadoo, operating partner at Clarendon Capital LLC , a private equity fund in the transportation and logistics sector, and first general director of UPS de Mexico from 1992 to 1999, said that Estafeta is the jewel in the crown of logistics in the territory. Mexican, “what UPS just took is great.” In addition, it will become the largest express parcel company in the country.
Likewise, he stated that it is positive news for the next federal administration in terms of foreign direct investment and echoes Mexico’s plans to continue strengthening the Treaty between Mexico, the United States and Canada (TMEC), cross-border flows and nearshoring .
“The integration of Estafeta clients will strengthen the possibilities of greater fluidity in the cross-border supply chain whether to the north or south, and on the other hand, the technology that UPS has will be able to reach through the Estafeta network. “, said.
He explained that the Mexican company’s business is 90% domestic between express parcels and logistics services such as storage and distribution, while for the American company 60% of its income is international and 40% or less is domestic.
Regarding any effect on rates, he commented that to the extent that the Mexican company incorporates technology, among other actions, the prices will be similar to those of the American company.
“However, we must not forget that Estafeta offers you several domestic services, it has delivery ranges the next day, two, three or five days, air, land, and UPS normally only has urgent services in the domestic sector, so it can expand its range. of urgent product options,” he indicated.
Likewise, he stated that the benefits of this purchase is the integration of small and medium-sized companies that the Mexican company has into the robust supply chain that the American company has, in this way they will be able to import and export in a more efficient way and “get on top.” to nearshoring.
“Old acquaintances”
He recalled that UPS arrived in Mexico in 1991 sharing the Toluca airport with FedEx. UPS engaged in purchase discussions since 1990 which ended in 1992.
This period began with the help of Estafeta, who supported the firm in the delivery of international packages and envelopes.
“There was a close collaboration between both companies, which evolved to the point that UPS made its first offer for Estafeta in 1990, until the conversations were concluded in 1992 and in 1991 UPS began to have its physical presence in Mexico City, Monterrey Guadalajara, this triggers them to end their collaboration and begin to rely on companies such as Redpack , Zoom and Multipack in Mexico, this caused them to increase their physical presence in the country over the next 20 years to be able to have total national coverage,” he explained.
Therefore, he considered that this merger “was written that it was going to happen” , they have similar processes, as well as they have had executives who have worked in both companies, “there has been mutual cultural pollination and great respect despite the differences and that arose through the start of UPS, one of which was the opposing sides in the negotiation of the then Free Trade Agreement and caused a dispute one of the first of the Agreement, because UPS could not operate trucks in Mexico largely blocked by Estafeta”.
In this sense, he maintained that it has been a relationship that has overcome various obstacles with a common denominator, respect, very deep operational and managerial knowledge of the processes between both companies and closer than any other competitor.
He mentioned that both companies have a 10-year commercial alliance where Estafeta subcontracts UPS for international services, “so that’s when the winds begin to change.”
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