The Business Year

Agustí­n Picado

MEXICO - Transport

Building Connections

Country Manager, UPS

Bio

Agustí­n Picado holds a bachelor’s degree from Montclair State University in New Jersey, US and an MBA from Farleigh Dickinson University in New Jersey, US. He also earned a master’s certificate in Project Management from George Washington University. He held the position of Vice President of Marketing for the Americas Region from 2011 to 2014 mid-year. He was appointed Country Manager of UPS Mexico on January 2014, assuming the leadership to promote the growth and straightened of the company. Among his responsibilities are the design and execution of businesses strategies, as well as ensure that the company’s operations satisfy the distinguished level of service that the UPS is known for in the world.

"In a nutshell, we seek a balanced approach to the market."

How has UPS’ presence in Mexico developed over the past 25 years?

The company was established in Mexico in 1991. We started out working with a third-party vendor. This year, we are celebrating our 25th anniversary. When we first start out in a country, our aim is to connect that country to the rest of the world. What we have done over time, which is easy to do in the beginning, is build up the network so we can take advantage of all the available time in our operation. That is when a domestic service comes in. Since we started, we have spent a good amount of time turning agent operations into UPS operations. In addition, we have introduced a countless number of new products along the multiple lines of business we operate in. Everyone knows our brown trucks; however, we do a lot more than that. We operate as a small package deliverer, also doing heavy cargo, air freight, ocean freight, ground freight, and more. That has all happened over time. Since we established here, we have also made some acquisitions that built out our portfolio.

What has been your strategy for UPS since you first came to this market?

In a nutshell, we seek a balanced approach to the market. We have found that there are opportunities to help companies improve their operations. There are custom models that need to be renewed to streamline processes. The management of multiple providers creates a lot of costs and problems. The fact that we built our portfolio globally and in Mexico to fill out all parts of the business helps us go to the customers and ask how we can help them move their products quickly across the border. We have seen them sit there at the border for seven days and they don’t move until they have a full truck. Our focus to go to market is on helping people with solutions that hit all parts of the business so they are not just looking at the domestic part. Hence, in 2014, we established a new group that sits above the border called the Center of Excellence. This group focuses on how we connect our people, networks, and customers on both sides of the border, even up to Canada. Given that 80% of the exports from Mexico go to the US and 50% of the imports into Mexico are from the US; clearly, it is a major trading partner. Therefore, there is a lot of opportunity to help companies run better. That is our focus.

What changes have you implemented in Mexico since 2011?

When I first got here, we built out our next-day delivery network in a small package. We now cover about 95% of the population with next-day service with our own vehicles and people. We also introduced a standard, guaranteed deferred service within Mexico. We have Express, which covers the whole country and in the other zones we also offer a deferred service that is guaranteed, too. That has been received with positive feedback from the market. In addition to the package network, we also started a campaign to expand our footprint of UPS Express stores. That is to expand our retail presences to help SMEs get better access. We did a big market study to understand their needs. We bought a company called Kiala about five years ago in Europe. In 2015 we also launched an access points network in Mexico, which are local small businesses that we have partnered with, so that clients can pick up their packages when it fits their schedule, knowing that their packages are secure.

What are the biggest challenges for the growth of international trade for Mexico?

Starting with imports and exports, modernizing the existing customs infrastructure for Mexico is really important. It is important to our entire industry and the cargo industry as well because, if fixed, it could change the perception of Mexico on a global scale. Everyone gets either a red light or a green light. We have been working with them, today in fact, to have them adopt a pre-clearance process and a target search process that is being utilized in other markets. We have it in our global hub in Kentucky so that customs can be smarter about looking for suspicious packages or not paying the right amount for duties.

What advantages does UPS have over the local players in this market?

The largest local companies are dedicated to only one business. We look at two dimensions: size of shipment and the speed it needs to be there. If you don’t have a full portfolio, you can’t do this. We’ve built our portfolio this way because we know that any given day customers are going to have an urgent situation where they need to get something out right away or else they’ll get a fine. Not everyone can do that. This is why we put the Center of Excellence in place, to help us better manage this, on both the US and Mexican side. The same issues happen on the US side, so our team connects the US and Mexico. The same problems are happening on both sides. That’s why they should pick us—in any given moment, they should be picking the right mode of transportation, emergency or not. For example, in the aerospace and automotive industries there is the idea of “mode optimization.” They think everything has to be at the destination right away, but then it gets there and it sits there. When it’s sitting there, it has the possibility to get damaged or lost. So, thinking differently about the supply chain requires having someone talk to you about all these different options to save costs and generate more revenue and more profit.

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