With four global business units, three major R&D centers, 1,200 employees and nearly 80 customer service representatives - who collectively speak 14 languages - Intralox, LLC, of Harahan, La., is no stranger to doing business across borders. Intralox is a producer of conveyor belt technologies with close to 60,000 manufacturing customers worldwide. To meet the needs of its key customers in Mexico, Intralox worked with UPS to overhaul its shipping model to ultimately improve its customers' experience.
Intralox had been doing business in Mexico for decades and knew first-hand that the country has a number of rules and requirements for exporters. However, in 2006, the company took proactive steps to ensure that it is most effectively addressing Mexican rules and requirements. Ultimately, these measures improved service levels with key customers in the market.
"For years, our Mexican manufacturing customers took on a lot of the paperwork and headaches associated with being the importer of record in Mexico," said Joao Leote, Intralox sales manager serving Latin America. "Once Intralox became an official importer of record in the country, UPS showed us ways to ease the paperwork burden that our customers had been handling for so long. We ultimately made the shipping process much smoother for our customers and created a more efficient supply chain for Intralox."
Updating Processes to Propel Growth in Mexico
UPS implemented a UPS Trade DirectSM Cross Border solution which consolidates multiple orders at a UPS Supply Chain SolutionsSM facility in Laredo, Texas, then moves bulk shipments to the border, reducing Intralox's transportation costs. UPS Supply Chain Solutions then clears the bulk shipment through customs as a single entry, saving Intralox more money by eliminating multiple brokerage fees. The bulk shipment is received at a third-party logistics partner's facility in the Nuevo Laredo, Mexico, where it is broken down into individual orders and delivered to individual customers at domestic rates, leveraging UPS's and its partner Almex's transportation networks. For any urgent shipments that must arrive into Mexico as soon as possible, UPS leverages its air freight network to fly shipments into Mexico City, Guadalajara, Monterrey or Chihuahua.
"UPS's Trade Direct solution is a solid, systematic approach for exporting into Mexico," said Scott Williams, Intralox shipping supervisor. "By consolidating our orders into one daily bulk shipment, our products can clear Mexican customs more efficiently than before. UPS helps make borders seem invisible."
While the UPS Trade Direct Cross Border Solution helped provide Intralox with a solid shipping foundation, the company still needed a good bit of customized guidance on how to most effectively invoice its Mexican customers in the local currency.
In 2006, Intralox worked with a consultant to establish the company as an importer of record with the Mexican government. With this designation, Intralox was able to drop ship its products from Louisiana, but have the products labeled with an origin address of Mexico City. More importantly, the importer of record status enabled Intralox to invoice its customers in Mexican pesos, which ensured a smoother process for Intralox's customers.
Even with these improvements, the invoicing process is still one of the most challenging aspects associated with shipping to Mexico. The Mexican government requires all exporters and importers to supply a pedimento – a legal document used to invoice customers that must include an official importation number issued by the government – and a factura, a sales invoice for the customer receiving the goods.
Typically, a shipper receives its importation number after the goods clear customs at the Mexican border. This meant that Intralox couldn't invoice its customers until after the company obtained the importation number from the government, adding time to the transit process. With UPS serving as Intralox's customs broker, UPS was able to use its relationship and expertise to allow Intralox to receive a pedimento in advance for all ground shipments before they leave the United States. Because UPS knows that Intralox will have one daily Trade Direct bulk shipment crossing from Laredo, Texas, into the Mexico every day, UPS has been able to work with the Mexican government to obtain five days worth of pedimentos the Friday before the week's products ship. For air shipments, UPS has worked with the government to ensure that Intralox obtains its pedimento as soon as the goods leave the country. Previously, it took days for Intralox to receive this documentation.
The Mexican government also requires that the end customer receive a factura with every order. UPS has collaborated with Intralox to ensure that their customers receive a factura that only shows the price that the customer paid for the goods, and that the paperwork with the shipment does not include the value of the goods declared at the point of customs. Intralox believed that showing their clients both numbers could cause some confusion. To ensure a more client-friendly factura, UPS worked with Intralox to provide a streamlined factura that clearly lists the price the customer paid for the order. This customized factura still meets the Mexican government requirements for invoicing.
"With the nature of our business, if a production line is down, every minute is very costly to customers," Williams added. "We took that same critical response mindset and applied it to our supply chain practices. Earning the importer of record designation and working with UPS to obtain pedimentos sooner has helped Intralox better manage our supply chain and better serve our customers."
Making the Most out of Business in Mexico
UPS has helped Intralox better navigate the complexities associated with shipping to Mexico by implementing a truly customized supply chain model that improves the Intralox customer experience. The model UPS developed has led Intralox to consider implementing similar custom solutions in other Latin markets.