The Logistics Development in the Mexico

• I recommend that USCO enter the Mexican market via a mix of greenfield/joint venture operation in keeping with the company’s culture of being the first in the field. Currently in Mexico, the banks are overseeing the logistics development in the country and they are not qualified to be overseeing such initiatives. It is important to step in while the country’s logistics is in its primitive stages, revamp the logistics industry, and establish USCO as the leading logistics supplier in Mexico.

• Why not partner with the banks in taking over their logistics efforts, bringing USCO’s knowledge to them, and in return have the banks finance USCO’s initiatives? The banks will be receptive to this idea since they lack knowledge of logistics and will most likely want to venture out of this industry in order to focus on their actual industry.

• Partnering with privately owned warehouses in a joint venture effort is a mistake given their demands of paying upfront premiums. What is the point of partnering with a company that is not willing to share the same risks your company is willing to take? Paying these companies upfront will also not motivate them to do well in our joint efforts; it will make them lazy and therefore will not produce profitable results.

• To get experienced warehouse managers, it is best that USCO send their top-performing managers from Puerto Rico to start training staff in Mexico. The Puerto Rican staff is the best resource USCO has as they know the product the best, speak fluent Spanish and can properly train Mexican staff while maintaining the company’s culture.

• While establishing warehouse locations, given the high-cost of land but cheap cost of construction in Mexico, would it be best to rent land/warehouses versus purchasing? This will allow flexibility should the company decide to test certain areas before permanently buying a warehouse.

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