Ryder and Laredo – Smooth Crossings
Laredo/Nuevo Laredo Site Visit
June 25, 2012
Stephen Dean – Executive Vice President
Gene Sevilla – Vice President
Ruben Silva – Group Logistics Manager
Miguel Perez – Director International Customer Logistics
Ricardo Alvarez – Director Business Development
Garrick Taylor – Director Border Trade Alliance
Surface trade between Mexico and the United States has increased by 11% over last year and nearly doubled since 2002. The primary crossing point is the World Trade Bridge in Laredo, Texas where 10,500 tractor-trailer units cross per day. Fifty-five hundred units move south and five thousand move north. In addition, 1,200 rail cars a day cross at Laredo primarily using the Kansas City Southern Railway.
Lined up waiting to cross
Electric machinery, equipment and parts, computers, parts and related products, and cars/trucks are the primary products in both directions.¹ Geo-Mexico reports that there are 25 automobile assembly plants in Mexico producing two million vehicles a year. Eleven hundred firms make vehicle parts. The total package is $85 billion a year added to the Mexican economy and over 500,000 jobs. Major 3PLs are Ryder, Penske and CEVA. Important trucking companies are Werner, U.S. Xpress, Celadon/Jaguar, Swift/Trans-Mex, Schneider, TMM and Crum. Ryder services GM, Toyota, Mazda, other major offshore original equipment manufacturers (OEMs) and suppliers.
To appreciate the non-automotive sectors, we need only to look at Ryder’s customer list.
Table 1. Ryder Non-automotive Customers
Ryder manages over 150,000 border crossings a year, and over 130,000 of those are executed on a dedicated fleet versus outside purchased transportation. Its largest operation is Laredo/Nuevo Laredo. In Laredo, Ryder has a 103,000 square foot cross-dock/warehouse and office and 140 trailer spaces. In Nuevo Laredo, Ryder has two yards with a total capacity of 305 trailers. The main Nuevo Laredo yard houses the control tower, driver quarters and restaurant, a maintenance shop/fuel station and parking for 106 trailers. The second Nuevo Laredo yard is primarily an overflow trailer parking yard but it is also a very secure yard. Ryder’s infrastructure on both sides of the border allows it to accommodate in a secure environment all volume peaks arising from holiday differences between the two countries, end of month and end of quarter volumes, security lockdowns in Nuevo Laredo, and other factors.
Overview: Ryder US/Mexico Logistics Networks
Nuevo Laredo has 30 transportation managers handling dispatch, end-to-end tracking and event management. Using Ryder’s LMS software and Ryder On-line software, they optimize customer networks with planned and unplanned routes, handle event exception tracking, consolidate shipments and control cross border activities. Nuevo Laredo dedicated operations consist of 185 routes, 130,000+ miles and 1,300 border crossings per week. The dedicated fleet consists of 80 tractors, 130 drivers and 120 trailers. Half are used exclusively for border crossings. Given the amount of traffic moving to and from Ryder’s Nuevo Laredo facility, a high level of security needs to be maintained. The facility and yard are wall-fenced, have a plethora of cameras and four canine units working with security personnel 24/7 at the guarded front entrance.
Ryder uses a combination of global positioning systems (GPS) and driver reporting to constantly monitor truck/trailer locations and activities. Current status for each run is available at RydeSmart.
RydeSmart – Detailed Stops and Mileage Report
In addition to its tight security control of all tractor trailers, Ryder employees have an in-cab technology called Green Road. Green Road supplies drivers with color coded alerts involving acceleration, braking, speed and maneuvering. Cabs are equipped with a camera, microphone and panic button. Other sensors cover the trailer door which has a keypad, unhooking which was an armored security lock, fuel cut-out and an anti-vandal siren.
To facilitate regulatory visibility and speed cross border operations, Ryder participates in the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) and Canada’s Partners in Protection (PIP). Ryder is not a licensed trucker in Mexico but uses C-TPAT certified carriers extensively. C-TPAT certification allows for the use of Free and Secure Trade (FAST) process lanes.
At Laredo, there are 16 processing lanes open 18 to 19 hours a day on weekdays, six hours on Saturdays and four hours on Sundays. Customs and Border Protection (CBP) uses its Automated Export System (AES) for tracking all import movements through the Port of Laredo. The Port of Laredo should handle more than $90 billion of imports this year (2011 was $87 billion). U.S. Customs and Border Protection, Port Director, Sidney Aki, a Hawaiian native, heads the Port of Laredo and eight other locations. It’s important to note that C-TPAT also applies to facilities. All Ryder facilities in Laredo and Nuevo Laredo, as well as all facilities operated by Ryder further south in Mexico, are C-TPAT certified. In addition, all carriers serving Ryder are subject to a rigorous Ryder driver clearance program to ensure all drivers meet standards beyond those required by C-TPAT.
Physical inspections are performed on a stratified random sample of the units crossing each day. In addition, Aki and his staff are on the watch out for variant behaviors which trigger additional inspections.
Dedicated FAST driver lanes (four north and four south) and C-TPAT standing reduce average crossing times to less than two hours per Ryder tractor-trailer unit.
Hazardous materials movements (»2,000 a day) are all handled via Columbia Bridge which is 20 miles west of Laredo in Nuevo Leon.
We estimate average load values per truckload equivalent for all Laredo truck and rail traffic to be $51,000.
Key to Ryder’s success for the Laredo operation is Group Logistics Manager, Ruben Silva. Silva has a very good working relationship with CBP as they pursue their common goal of safe, secure and faster border processing. He is well known and respected in the Laredo community. His core staff is made up of educated achievers who are on the same wave length.
Despite the North American Free Trade Agreement (NAFTA), Mexican motor carrier operating authorities have been nearly impossible to get for U.S. companies. For a brief period in 2004, authorities could be obtained. Swift acquired Trans-Mex. Celadon set up Jaguar. The general pattern for U.S. companies, however, has been to work closely with Mexican nationals. Given the challenges of crossing the border and years of experience, close working relationships have been formed.
Ryder solved its Mexican authority problem by setting up close partnerships with several carriers in Mexico such as Transportes Monroy Schiavon (TMS), Transportes Lazo, STIL, Akna, and others. These carriers, while small for U.S. standards, are of significant size in Mexico. These contracted partners serve many customers, but they also serve as dedicated contract carriers for Ryder’s customers. Ryder buys and contracts equipment to them. All of the equipment has the safety and security systems already discussed. STIL and Akna are Ryder’s main carriers in the Laredo/Nuevo Laredo border crossing. Both carriers are C-TPAT certified and drivers meet the standards set by Ryder. The units are bar-coded. Maintenance is scheduled automatically by Ryder’s Fleet Focus vehicle maintenance system. In addition, Ryder’s Yard View tracks all equipment in Nuevo Laredo, Monterrey, Mexico City, Puebla and Guadalajara.
STIL trucks are used over the road in Mexico for dedicated operations including milk and peddle runs. They will also be used to deliver into the U.S. at distances up to 7-800 miles. Services include dry van and flatbed loads. Akna tractors are used for cross border trailer movements. Production is three to four trips per driver day. All STIL and Akna personnel participate in Ryder’s STAR quality program which gives seven standardized metrics for each employee per month.
Ryder’s Nuevo Laredo operations provide transportation management services for 34 customers. Customer relationships vary from those of an agent to being an active and complete manager. As an agent, Ryder provides the system, tracking and reporting. As an active manger, Ryder covers all shipments, carrier management and value-adds end to end. Besides Nuevo Laredo, Ryder’s other control tower (Operations Management Center) is in Novi, Michigan. Between the two locations there are 95 staff members providing 24/7/365 coverage. Ninety thousand loads are managed per month. In addition to the OMC operations, Ryder maintains a Transportation Management Center in Ft. Worth, Texas (a case study on this location can be found at: https://www.3plogistics.com/Ryder_Site_Visits.htm.
Solid, quality operations to and from Mexico continue a hallmark of Ryder Logistics’ services. Vice President – International, Gene Sevilla, has ran them well with high ratings for 15 years.
Ryder’s other significant Mexican operations include border crossings at Tijuana and El Paso/Juarez. Large modern warehousing/cross-dock locations, all C-TPAT certified, are given in Table 2.
Table 2. Mexican Warehousing/Cross-dock Locations
|Carrizal (Mexico City)||37,770|
|Diamante 4 (Monterrey)||20,467|
|Diamante 8 (Monterrey)||27,000|
|San Luis Potosi||20,475|
¹Bureau of Transportation Statistics 26-12/U.S. Department of Transportation
Sources: A&A Primary Research, http://www.ryder.com/