Linked up: The state’s geographic advantages make it ideal for logistics firms

The growth of local industry and Querétaro’s location in the centre of the country have contributed to the emergence of the state as a domestic logistics hub. In 2012 shipping, mail and storage accounted for 7.9% of Querétaro’s economy. In Mexico as a whole, logistics contributes about 7% to GDP. In Querétaro, according to the state’s Ministry of Sustainable Development, the sector grew an estimated 5% in 2013.

ROAD & PORT CONNECTIONS: Querétaro’s geographic advantages have played a role in the sector’s growth. Querétaro is 200 km from Mexico City and located within the emerging industrial region of central Mexico known as the bajío. Mexican Federal Highway 57 runs through Santiago de Querétaro, the state capital. Along the highway, Querétaro is 200 km from San Luis Potosí, 850 km from Monterrey and 1200 km from San Antonio, Texas. Guadalajara is 350 km to the west.

As a result of the relative proximity to these markets and Querétaro’s location near the geographic centre of the country, some companies with manufacturing operations there, such as Dongbu Daewoo Electronics, also base their national distribution centres in the state. General Motors and Mexican big box retailer Soriana also have large distribution centres there. Although Querétaro is inland, it is reasonably close to ports on which many of the state’s plants rely for import and export of large cargo. The Pacific ports of Lázaro Cardenas and Manzanillo and the Gulf of Mexico ports of Altamira and Veracruz are less than 600 km away.

WAREHOUSING: These factors have contributed to the emergence of a competitive logistics sector that attracts a steady flow of foreign investment and has brought a wide range of players into the state, from blue-chip logistics companies to start-up firms. For example, Dutch company CEVA Logistics, which in 2013 recorded revenue of $8.5bn, operates a freight management business in Querétaro and has scaled up its warehousing capacity. In 2014 it finished expanding its multicustomer warehouse in the state from 12,000 sq metres to 17,000 sq metres. The firm predominantly serves aerospace and automotive manufacturers, as well as their suppliers. Additionally, US supply chain management firm ProTrans International, which had a total revenue of $171m in 2012, opened a 2000-sq-metre service centre in Querétaro in 2013.

BY AIR: Querétaro Intercontinental Airport ( Aeropuerto Intercontinental de Querétaro, AIQ), opened in 2004 and was built to be able to accommodate the growing manufacturing sector. As of late 2013, it was operating well below its capacity, and in the period from January to November of 2013, 16,600 tonnes of cargo passed through the airport, representing a 15% increase over the same period in 2012.

DHL Express and FedEx handle almost all of this volume, and both companies have invested in expansion of their operations in order to keep pace with the state’s growing needs. DHL Express opened its domestic air operations at AIQ in 2010. In its first year of operation, DHL moved 40 tonnes of domestic shipments per day, and as of the first quarter of 2014, this figure had increased to 70 tonnes per day. DHL expects the volume of shipments to continue to see double-digit growth for the next few years. To accommodate the demand, DHL has also built a new facility at the airport that will expand the hub’s area to 9000 sq metres from 2300 sq metres when it opens in 2014. Since 2012 DHL Express has also run an international service with 40 tonnes of daily shipments arriving from DHL’s hub for North and South America in Cincinnati, Ohio.

FedEx also operates an international air service at AIQ. In 2011 FedEx began flying a Boeing 727 between Querétaro and its hub in Memphis, Tennessee, five days a week. In 2012 it replaced the 727 with a 757, increasing its daily shipping capacity by 50%. As of the first quarter of 2014, FedEx’s monthly shipping capacity at the AIQ totalled 480 tonnes. Querétaro’s central location makes the state a natural base for shipping and warehousing operations, and with the logistics sector’s prospects tied to manufacturing, the sector appears poised for stable and continued growth in the future.

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The Report: Mexico 2014

Querétaro chapter from The Report: Mexico 2014

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