Chicago-based third-party logistics (3PL) services provider Echo Global Logistics said today it has expanded its cross-border services in Mexico, following eight years of managing southern border shipping services.
As key parts of this expansion, the company said that it has set up new locations in Mexico City, Monterrey, and Laredo, Texas, and also tapped 30-year logistics veteran Troy Ryley as President, Echo Mexico. Ryley has deep experience managing and scaling large teams, as well as extensive knowledge in developing integrated U.S.-Mexico logistics offerings.
In an interview with LM, Ryley said that over the past eight years, Echo has offered all of its base products and services it offers today into and out of the southern border, which he said creates tremendous opportunities for the company. Those offerings include partial full truckload (FTL) brokerage and less-than-truckload (LTL) services into and out of the southern border.
“We were able to build a very large and vibrant business,” he said. “I think that is part of what is driving us to do what we are doing today as far as investment is concerned.”
With Mexico now the top trading partner for the United States, there is major momentum among 3PLs, in terms of expanding their operational presences in Mexico. Ryley explained a key driver for that is client requests, with Echo’s customer base—comprised of 35,000 customers across various industries—clamoring for increased service offerings into and out of Mexico, and not just to the border with U.S. resources but instead cross-border and in-country services. Ryley said that is the impetus behind Echo’s investment into its U.S.-Mexico cross-border operations.
In additional to the partial FTL and LTL brokerage offerings in Mexico, Ryley said that other services include: freight brokerage; managed transportation for truckload, partial truckload, LTL, intermodal, and expedited; and an expansion of its partial FTL and LTL brokerage offerings.
“We are also looking at solutions for U.S. and Mexican customs brokerage and have already put in play some opportunity for transloading, cross-docking, warehousing, and distribution at the border and potentially extending that in country,” he said. “You're going to see us come at this with a very integrated, dynamic model that will allow us to not sit down and tell the client what we do, but actually listen to them understand what their needs are and create tailored solutions to their needs.”
Shipper customer feedback to this expansion has been well-received, explained Ryley, with customers not only looking for cross-border opportunities but also intra-Mexico as well, with Echo looking into the latter, in order to provide domestic services within the country.
“They're asking for a lot of the same services that we have currently in the United States, obviously, to be extended, because they like their partner in the US are very happy with what we're capable of doing,” he said. “And as soon as we put together all the infrastructure necessary in Mexico, it's an easy extension for them to keep under our own technology platform and gain visibility, not just into the U.S., but also their North American Freight in and out of Mexico.”
Addressing accountability is also a major focus for Echo in Mexico, noted Ryley. As an example, he said a U.S. trucker, a Mexican trucker or crossing agent, a U.S. or Mexican Customs broker, and a warehouse involved in a forwarding operation on the north side of the border collectively create what he called a tremendous amount of confusion, as well as opportunity, with Echo’s ability to integrate and create accountability among those parties, or one-party accountability, presents opportunities for Echo.
Echo currently has roughly 2,850 employees working in and around Mexico and is ramping up quickly and planning to end 2024 what a substantial presence in Mexico City, Monterrey, and Laredo, Texas, said Ryley, with the company seeing faster than expected growth there, driven by organic growth that is accelerating and built into its strategy.
As for its southern border customer base, Ryley said that Echo’s diversified U.S. customer base will serve as an extension in Mexico and be predominantly automotive-led through second- and third-tier providers as an example.
“We have some of that existing already today cross-border,” he said. “We're going to continue to see that grow, I'm sure, but all kinds of goods products, consumables within Mexico, obviously, southbound flow and then finished product going northbound, which will be all types of products, and consumption goods coming back into the United States. So, it's going to be client driven. And we'll adjust our operations based on the opportunities that we see based on our existing client base.”
Looking at the evolution of Mexico and nearshoring over time, Ryley noted that manufacturing there has become more and more dynamic and more exponential as far as growth and growth potential over time.
“The pandemic taught us a very valuable lesson in that the shorter your supply chain, the more control you have in general and more productivity,” he said. “If you really do want a just-in-time process in your supply chain or want to tighten your cash-to-cash cycle, you need to have a well-defined and shorter supply chain for control. And that is what I believe is driving the big part of the shift from Asia, for example, into the Mexican market. We are going to see that continue and see a lot more companies do it.”