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Luis M. Ocejo

MEXICO - Transport

Movers & Shakers

GRUPO TMM, Senior Managing Director, Maritime Business

Bio

Could you tell me about how the sophistication of connectivity between the wider region and Mexico has been improving? Connectivity is improving little by little, especially in land transportation. There […]

Could you tell me about how the sophistication of connectivity between the wider region and Mexico has been improving?

Connectivity is improving little by little, especially in land transportation. There are new technologies, such as multi-modal systems, that are now available in Mexico. I believe that connectivity is heading in the right direction, and although we still need to improve, we are doing very well in that respect. In terms of maritime transportation, we are strong on the offshore side. Regarding container shipping, we are working on a new project that should be launched in 2013. This project will allow cargo to move between Mexican ports, which we feel is very important if we are to reap the benefits of the larger sized vessels. This will make the transportation of containers and general cargo much easier. The new government is very interested in this project, and we are truly looking forward to completing it. The project is commissioned by TMM, and we are working with several ports on the Pacific Ocean. If we are successful, the project will move to the Gulf of Mexico as well. We are aiming to take advantage of the long distances between the north and south of Mexico. Currently, the movement of cargo is carried out by trucks, and we believe it would be much more advantageous to move cargo via maritime routes instead. We are planning to combine the road and railroad transportation with our maritime services to provide a more efficient service and boost revenues.

What benefits can you offer customers by providing maritime transportation services as opposed to road transportation?

Maritime transportation incurs lower costs compared to trucks. We are moving more cargo at a lower price, but we do need to focus more attention on the ports in order to be competitive. Our main focus is on pricing in terms of the international market. If you look at European ports, they offer special prices in order to be more efficient versus land cargo transportation. We have to work hard to persuade clients to switch to maritime transportation when possible, and once they learn the benefits of this service, we are certain they will stay with us. We have been researching services all over the world, and customers are following this trend. The cost for repairing and making new roads is very high, while the maintenance of water routes is free. There is also an advantage on the environmental side, because the contamination involved with the use of maritime vessels is much lower than using trucks.

If proposed energy reforms are implemented, do you foresee significant opportunities for GRUPO TMM?

Everyone in Mexico would benefit from such a situation. In our case, there would be an excellent opportunity to participate in business lines that are currently controlled by PEMEX. We feel that if these options are opened up to the private sector, the quality of services will improve drastically. Of course, prices will also fall, and we see many advantages there. We hope that the new reforms President Peña Nieto is promoting become a reality as soon as possible so that we can reap the benefits. The past reforms were not bad, but they were incomplete. Something additional needs to be done in order to truly boost the industry.

“We are moving more cargo at a lower price, but we need to focus more attention on the ports.”

What are the main challenges facing the evolution of the industry?

On the chemicals side, the main challenge is the infrastructure of the industry, which always requires more efficient transportation to reduce costs. We are facing competition from China, which is producing in Mexico. There is a lot of pressure on us to be more efficient. On the tanker side, the competition we face is PEMEX itself. The company has decided to buy its own ships, and there is only a small gap for the market to fill. We believe that PEMEX has not conducted a proper study of the benefits associated with owning its own ships, as opposed to using those of private-sector companies, because we feel that we work much more efficiently and can offer lower costs for these types of vessels. On the offshore side, the main problem is for PEMEX to acquire the rigs or platforms for production, and that will require more vessels.

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