UPS DISTRIBUTION CENTER TO OPEN NEAR MEXICO CITY \ HUB COULD RESHAPE WAY AREA FIRMS DO BUSINESS

UPS DISTRIBUTION CENTER TO OPEN NEAR MEXICO CITY \ HUB COULD RESHAPE WAY AREA FIRMS DO BUSINESS

UPS Worldwide Logistics will open a 240,000-square-foot logistics warehouse and distribution center in Mexico that it hopes will reshape the way companies operating in the urban sprawl of Mexico City and environs conduct their business.

Working as a third-party logistics provider, the company will move from its smaller facilities in the Mexico City suburb of Naucalpan to the massive distribution center north of Mexico City in Cuautitlan.It holds six times the capacity, will operate 24 hours a day, has 40 bay doors and is located near the heavily traveled north-south highway system that links with the United States.

At the previous facility, UPS served larger customers with small-package logistics through a division called the Customer Resource Group.

Now, operating as UPS Worldwide Logistics de Mexico, the new company will offer a host of third-party logistics services.

In fact, the company can go as far as - in the case of OfficeMax in Mexico City - dressing its personnel in another company's uniforms and acting as de facto delivery people.

''We still revolve around the small and medium-sized packages,'' said John Maldonado, UPS Worldwide's managing director for Latin America.

UPS Worldwide is subsidiary of the UPS Logistics Group, a wholly owned subsidiary of United Parcel Service.

The focus is on deliveries within commitment of two, four or eight hours, parts replenishment and deliveries - a service Mr. Maldonado described as ''not just-in-time but right-now delivery.''

The service is offered in at least 12 major cities in Mexico.

Beyond the traditional customers like U.S. automakers and the electronics sector, the company is now serving as the delivery arm for OfficeMax in Mexico City, handling next-day delivery of computers or other consumer goods that were purchased.

The company also handles routing and delivery of milk, cheese and yogurt for Parmalat.

''It's small packages, but it's not within the UPS per se scenario,'' Mr. Maldonado said.

UPS Worldwide Logistics de Mexico also is finalizing approval to handle hazardous materials at the new facility, concluding the residual water connections and training manuals and obtaining the final permits.

Certain vehicles will be certified to deliver hazardous materials in a limited mode.

''It is not hazardous materials in a cargo mode,'' Mr. Maldonado said.

While corporate parent UPS continues to battle the Mexican government on the issue of national treatment for its service within Mexico - a battle nearly four years old with few signs of compromise - Mr. Maldonado said the logistics service does not get caught up in the ongoing fight over what is package-express delivery and what is truck cargo.

The service involves 8-ton vans used on a dedicated basis for a specific customer, ''as if the customer operated it himself and not as a public offering,'' Mr. Maldonado said.

The third-party logistics service provides customers with everything from inventory and warehousing, to invoicing with Mexico and even order-entry processing.

UPS Worldwide employees can answer phones and take orders for a client, then handle the delivery.

The logistics company operates out of a foreign-trade zone in El Paso and a facility at the Texas border hub of Laredo.

Plans call for facilities in Nogales, Ariz., and Otay Mesa, Calif., by the end of the year.