Streamlined and Sustainable: Nearshoring the Automotive Manufacturing Processes

One of the automotive industry’s leading mobility technology companies supports more than 60 automotive OEMs around the world. Their smart service solutions help automobile drivers and passengers feel safe and comfortable. With a streamlined vision in mind for their manufacturing and production processes, the company chose C.H. Robinson to make it happen.

A new provider for a new production facility

With headquarters in Asia, the company serves automotive manufacturers in countries around the world—including the United States. They determined opening a manufacturing facility in Monterrey, Mexico, would help shorten transit times for these customers—all while helping them remain competitive in the just-in-time market and supporting the company’s global carbon neutral strategy.

Unfortunately operating in Mexico can be complicated from halfway across the world and without the right expertise. The tech company knew they needed a competitive, multimodal strategy that worked in Asia and North America. As such, they decided to search for a logistics provider to help navigate the complexities. They started by submitting a request for proposal (RFP) to 10 global providers.

They sought a logistics provider that could successfully incorporate a variety of services to properly support the company’s expansion into Mexico, including warehousing, multimodal transportation logistics, and compliance with Mexican customs regulations.

The right provider would need to have experience optimizing the relocation process as well as deliver insights into customs formalities that could help minimize delays and complications. Through careful planning and ongoing support throughout the implementation process, the company wanted to maximize the benefits of their move to Mexico in every way possible.

When their logistics team reviewed the RFP responses, they immediately recognized C.H. Robinson had unmatched expertise regarding the transportation of high-value goods and the many complexities of Mexico’s business landscape, all while offering more robust global services than other providers.

The company felt confident C.H. Robinson would use their 35 years of experience in Mexico to successfully help navigate the Mexico business landscape, set up the new manufacturing plant, move their freight, streamline customs processes, and manage risks associated with missing or damaged products.

An end-to-end solution drove nearshoring success

Once selected, C.H. Robinson developed a tailored solution that proactively addressed customs complexities. This included recommending pre-classification of goods to determine HS codes that allowed the customer to learn about the non-customs regulations they needed to comply with in advance. Additionally, C.H. Robinson secured sufficient warehouse space to support inventory needs, ensuring a seamless launch of the Monterrey plant.

Ongoing implementation support

While the decision to build in Monterrey, Mexico, had been made, the tech company looked to C.H. Robinson for help with implementing the necessary changes to the new facility. The teams collaborated with bi-weekly calls to help deliver status updates about the project. Keeping everyone in the loop was paramount to the new plant’s success.

Throughout the process, the insights and expertise from C.H. Robinson helped the company understand how to successfully operate in Mexico, ways to comply with local laws, and strategies to leverage USMCA and other trade laws for their specific goals.

Multimodal service options for shifting needs

In terms of supplying the Monterrey plant with raw materials, they have several shipping options to choose from based on required transit times thanks to tailored solutions from C.H. Robinson. For their most immediate needs, raw products are transported via air directly from Shenzhen Airport to Monterrey International Airport. For longer lead times, ocean services are used. This ability to flex up or down based on need is an invaluable result that helps the company save money and support their sustainability goals.

The solution from C.H. Robinson also included modal shifts and sea/air combinations as needed based on lead time and demand levels to help meet commitments without breaking the budget.

Compliance for streamlined clearances

Beyond basic transportation services, C.H. Robinson arranges for a third-party licensed customs broker to handle customs clearances into and out of Mexico. As part of the implementation process, C.H. Robinson performed a full Harmonized Tariff Schedule (HTS) classification review to properly define all products in advance for more streamlined clearances upon arrival.

Driving positive change on a global scale

The collaboration between the two companies yielded remarkable results. The profound understanding of Mexican operations by C.H. Robinson delivered invaluable insights that offered the tech mobility company the knowledge and tools necessary for a seamless entry into the new market.

This in-depth expertise not only expedited the setup process but also positioned the company to navigate the cultural differences with confidence and agility, allowing them to adapt and thrive in their new environment.

One of the most significant achievements was the streamlined customs process, a testament to the meticulous groundwork in goods classification. This reduced the time goods spend in customs, enhancing operational efficiency and reducing potential bottlenecks.

Financially, the collaboration yielded substantial cost savings. Their well-planned logistics strategy also includes an emphasis on sustainable transportation. This not only bolstered the bottom line but also contributed to a more sustainable and responsible approach to business operations. Their strategic collaboration with C.H. Robinson made it all possible.