CARRIERS URGED TO EXPLORE MEXICO GROWTH POTENTIAL

CARRIERS URGED TO EXPLORE MEXICO GROWTH POTENTIAL

Transport companies must develop completely new approaches if they are to succeed in Mexico, a Burlington Northern Railroad executive said here Friday.

First, any participant must be a Mexican company, headquartered in Mexico and operated by people who understand the country, its markets, language and culture, said Phil Weaver.Speaking at a conference here, the BN executive said multiple access points will be required to handle the growth and complexity of Mexico's logistics needs.

"New routes to the new markets must be created to bypass the traditional border bottlenecks," he said.

Mr. Weaver, charged with developing Mexican business for the Fort Worth- based railroad, also stressed the importance of creating new links between transportation companies in Canada, the United States and Mexico.

"They must link previously independent carriers into an integrated service so tightly that it behaves as if it were one system," he said, adding that carriers will have to deliver these services in response to a single phone call and with a single bill of lading.

The conference drew a larger than expected crowd. Most of those attending are not yet experiencing the tremendous business that is being forecast, but they were drawn here in the hope that they might be able to generate new business.

Business card exchanges in hallways and at receptions were as popular as the scheduled events, primarily as U.S. transportation executives sought new contacts south of the border.

"To be successful in this country, you should have a Mexican partner," G.J. Van Heuven, president of the North American Free Trade Association, told conferees in his opening remarks Friday.

His association co-sponsored the conference with Kingsley Group, a San Francisco-based transportation logistics and consulting firm.

The meeting, which ran from Tuesday through Saturday, had 240 pre- registered delegates, but some 300 people turned up by its start.

Trans-border traffic has grown rapidly in recent years, reflecting the growth in trade to a $60 billion annual exchange. The nature of the trade has changed radically, however, placing new demands on transportation.

In 1980, energy - mostly oil - accounted for 64 percent of Mexico's exports to the United States. By 1990, it had shrunk to 11 percent, while manufactured goods accounted for 74 percent of a much larger trade.

But severe congestion and extensive delays already are hampering cross- border freight movements, and subjective growth could be slowed unless the infrastructure and Mexican transportation organizations are modernized and expanded.

Under the presidency of Carlos Salinas de Gortari, regulations on transportation have been relaxed and foreign investment to develop Mexican transportation has been encouraged, said Gustavo Patino Guerrero, Mexico's transportation undersecretary.

Motor carriers now can load and unload in any part of Mexico, he said. More than 100,000 new carrier permits have been issued since July 1989, and shippers and carriers can freely negotiate rates as well as volume and frequency agreements.

More than 3,000 miles of toll highways are under construction in a five- year program to accelerate infrastructure development.

Mr. Patino said concessions for construction and operation of four international bridges and 1,000 miles of highways have been awarded.

Shippers and carriers were not the only interests represented at the conference. Executives of equipment leasing, logistics management and warehousing companies were out in force.

That may be the proof that the U.S.-Mexico market is taking off. "Non- carrier transportation service enterprises are the entrepreneurial drivers," Mr. Lautsch said.