Redwood Logistics recently announced the launch of Redwood Mexico, a new service aimed at untangling the complicated process of shipping to and from Mexico.
The service will specialize in cross-border supply chain solutions, and it will draw on Redwood’s existing long-term relationships, industry experience and robust technology. The company already has a strong presence in Mexico and border cities like El Paso, Texas and McAllen, Texas.
Redwood is focused on providing customers with brokerage solutions, asset solutions in certain markets, warehousing and distribution capabilities and US-Mexican Customs brokerage services.
President of Redwood Mexico Troy Ryley said the company has brought on top level talent to help with the service, including Jordan Dewart and Mike Finn.
Ryley said Dewart previously worked as a top level president for a “significant player in the Mexican marketplace.” He will serve as Redwood Mexico’s managing director and focus on building the operations of the Mexican entity. Finn also previously served as a senior level leader and has joined the company as SVP U.S./Mexico sales.
"We are excited to expand our business further into the cross-border logistics space through the launch of Redwood Mexico,” Mark Yeager, CEO of Redwood Logistics said. “Though we have operated in this market for years, adding dedicated resources and market expertise will drive even greater value for our customers. This is another step towards our goal of becoming the gold standard of full service third-party logistics providers."
In addition to its logistics service, Redwood has a trucking division that currently operates to and from the Southern border.
Redwood is a leading truck broker in the U.S., and Redwood Mexico serves as an opportunity for it to expand its footprint. Ryley said the company’s operations will be based in Laredo, and it is making a significant investment to increase its existing presence in Mexico.
“We have a very strong presence in El Paso and have had a presence in McAllen. Laredo is just a much bigger market. We feel strongly that with our current staffing and the infrastructure we’re going to put in place, that we’ll be a major player in the Laredo market based on current systems and infrastructure,” Ryley said of Redwood Mexico.
Ryley said the company’s goal is to produce an integrated model that allows it to manage the U.S. and Mexican Customs process internally, but it will start out working closely with a customs brokerage partner. He said Redwood Mexico’s expected partner is a top three player in the Mexican market.
“The border in general is where most companies end up having their issues. Most companies are set-up with multiple service providers, and the hand-off between those companies can cause issues for the clients,” Ryley said. “We suggest clients integrate whenever possible for the sake of accountability. Too many potential players means too many ways things can go wrong. You’re much better off with a strong partner.”
Market changes over the past year have poised Redwood Mexico for success. These changes, including the ELD mandate, have spurred a trend among U.S. carriers of restricting the number of trailers allowed in Mexico due to high demand in the U.S. and a lack of return-on-investment on the equipment, according to Ryley.
“There has been a significant increase in transload shipments at the border, where Redwood uses the best-in-class Mexican carrier and the best-in-class U.S. carrier to service clients,” Ryley said. “The infrastructure is available in Laredo for transloading our clients’ freight quickly, safely and efficiently.”
Ryley said the imbalance between northbound and southbound shipments has extended beyond what would be considered a normal peak season imbalance, causing both Mexican and U.S. companies to rethink how they handle logistics.
That difficult imbalance sets the stage for Redwood Mexico to step in and implement more effective management strategies.
Ryley sees Mexico as a key component in the U.S. production strategy, especially as companies continue to show interest in nearshoring.
Nearshoring is the practice of moving business operations to a nearby country, as opposed to a one farther away, such as China. It allows companies to increase their speed to market and adapt quickly to market changes because they are closer to the consumer.
“Mexico has and continues to be a logical choice for production in the U.S. Detroit’s automotive industry would not exist as it does today if it did not have the option and ability to produce small and midsize cars in Mexican markets,” Ryley said. “There is a place for Mexico in our production strategy as a nation that can be mutually beneficial for both countries.”
Even with contentious NAFTA negotiations underway, Ryley is optimistic about the future of trade between the U.S. and Mexico.
“I don't believe there’s a high risk that NAFTA will not continue,” he said. “There seems to gossip that both countries are anxious to conclude the negotiations quickly and favorably.”
Ryley said the company is excited about the opportunity to enhance its services for existing clients and reach out to new prospective clients who may be looking for more sophisticated solutions in and out of Mexico.