Chick-fil-A and Starbucks Distributor to Move California Headquarters to Texas

Distributor to Move California Headquarters to Texas

A distributor to move its corporate headquarters to Texas from California to centralize its operations. The organization is a distributor to major restaurant chains such as Chick-fil-A, Chipotle and Starbucks.

Quality Custom Distribution is a part of Golden State Foods, and a global supplier to the quick-service restaurant and retail industries. The organization is leasing 10,784 square feet of office space at 2801 Network Blvd. in Frisco, Texas. Frisco is 27 miles north of downtown Dallas, for its headquarters. It sets the new office to open in January 2020.

The company expects some employees to move from California to Texas with the corporate headquarters. Also, they have plans to "provide a variety of new jobs," at the Dallas-area office.

The company has already begun posting job openings in Frisco, which include finance, accounting, customer service and purchasing positions. Quality Custom Distribution has 17 active job postings on online job websites. Officials were not immediately available to comment beyond a statement.

The move from Irvine, California, helps centralize the company's corporate operations. It better aligns and supports its distribution center market and its customers, said Ryan Hammer, corporate vice president and president of Golden State Foods Logistics.

The distributor to move from California Headquarters to Texas will grow its distribution network and secure its position as a main player in the food industry. The Dallas-area's central location, large talent pool, and business-friendly community fed into the decision to move to the North Texas region said, Hammer.

The company's distribution network includes two centers in Texas, one in the Dallas area and another in San Antonio. The Dallas-area location sits in Lancaster at 3900 N. Dallas Ave., which is 14 miles south of downtown Dallas. According to CoStar data, Quality Custom Distribution leases about 55,000 square feet of industrial space in the building.

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Warehouse or store? Picking the wrong place to unpack can cost you

warehouse or store

Retailers can see "considerable savings" if they unpack case packs (packages shipped by the supplier) into the individual consumer units at a distribution center before shipping the product to the final store, according to a 2017 paper published in the European Journal of Operations Research that focused on grocery retailers in the Netherlands and Germany. The amount of savings will vary depending on the SKU, and they are even greater if a model is used to determine the "optimal solution" for a given retailer.

The paper examined two different scenarios for a given SKU:

  1. Stores are sent case packs of the SKU and unload them onsite.
  2. Store are sent a custom number of consumer-level packaging units based on their inventory needs.

The researchers developed a model to determine the best unpacking location for a given SKU. This was then tested in a "hypothetical environment" that used data from a European retailer (referred to as Delta in the study), information on its current operations practice and cost data from a second retailer. When the researchers tested their model in the hypothetical environment, they found a 5.3% drop in the overall cost when the retailer moved from its current operating model to what the paper referred to as the "optimal solution."

The optimal solution in this paper was a model in which all stores follow the same unpacking method for a given product (either delivering case packs to the store or unpacking it into consumer units at the distribution center) depending on what is the lowest cost for all stores. Retailers must determine the lowest cost option for each product.

Marginally more cost savings were seen if each store used the unpacking method that reduced its individual cost (as opposed to the cost to the entire retailer) but this can be especially hard to put in place at the distribution center level, Rob Broekmeulen, the paper's author and assistant professor at the Eindhoven University of Technology, told Supply Chain Dive in an interview.

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Experts say Nuevo Laredo should focus on becoming a logistics and foreign trade hub

Laredo Texas

The Mexican border city of Nuevo Laredo should "bet more on logistics and foreign trade" than on attracting more maquiladoras, according to trade experts.

"Nuevo Laredo no longer needs to invest in maquiladoras, because it is a city more oriented towards customs and services," said Cirila Quintero, a professor at El Colegio de la Frontera Norte (College of the Northern Border) in Tijuana, Mexico.

The college is a prestigious Mexican institute specializing in teaching and research on border issues. Quintero specializes in the research of Mexico's maquiladora industry.

Quintero was part of a recent study conducted by the Mexico City-based Economic Information Bank (BIE), which indicated in recent years the number of export maquiladoras in Nuevo Laredo has decreased.

Quintero said one reason not to rely too heavily on maquiladoras for economic growth in the future is changing technology.

"I think that if local governments want to bet on the maquiladoras, they should understand that the maquiladoras have already changed and are something else," Quintero said in an interview with Primerahora.com.

Quintero added, "the only ones [maquiladoras] that are going to exist are the ones that are going to export, and many of those are going to be robotized, and the point is that if you want to invest in maquiladoras, you should no longer see them at the local level, but in the case of Nuevo Laredo you have to see Laredo, Texas, and see which sectors in Laredo are developing the most."

Nuevo Laredo – located directly across the U.S.-Mexico border from Laredo, Texas – has 35 maquiladoras that employed 29,878 workers, according to the BIE study. In contrast, in the Mexican cities of Reynosa and Matamoros, maquiladoras are still trending upward.

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Ventus Global Logistics is strategically located in Laredo, Texas and specializes in land, air, and ocean freight. Ventus Global Logistics maintains a brokerage presence in all of Mexico's main customs offices. Get comprehensive data on your material inventory whenever you need it thanks to our web portal. Contact us today for a free consultation.

What US companies should know about expanding manufacturing to Mexico

manufacturing in Mexico

As of 2019, Mexico is the largest goods trading partner with the U.S. with over $600 billion in imported and exported goods. This relationship has created 1.2 million jobs as of 2015, according to the latest data available from the U.S. Department of Commerce. It's also been reported, as of February 2019, that U.S. trade with Mexico increased 3.36%, while trade with Canada decreased by 4.12% and with China by 13.52%. This illustrates the direct impact of the current administration's trade war with China in particular, which ultimately has had negative repercussions for the U.S.

Generally speaking, products manufactured in Mexico are high-mix, low-volume, such as automotive and aerospace parts. This level of product is more expensive to move from China to North America when compared to shipping from Mexico. They also require more engineering skills than many products manufactured in China, which trend toward low-mix, high-volume, such as sunglasses or clothing.

As a result of Mexico's cost-effectiveness, global companies with a stake in the North American market, including Nestle and the BMW Group, have increased investments in their Mexican factories in recent months. In 2014, Nestle planned a $1 billion investment over five years to build and expand three of its factories in Mexico. And earlier this year, the BMW Group announced its new automotive plant in San Luis Potosi, Mexico as a boost to their "regional production flexibility in the Americas."

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Borderlands: CBP opens new fastlane at Laredo’s World Trade Bridge

World Trade Bridge

On August 5, U.S. Customs and Border Protection (CBP) held a ribbon-cutting ceremony for the completion of the World Trade Bridge's new Free and Secure Trade (FAST) Lane.

The new $10 million paved lane is for northbound FAST empty tractor-trailers to run directly from the bridge, and will decrease wait times at cargo facilities. The FAST program allows expedited processing of trucks owned by commercial carriers that have completed background checks and fulfill certain eligibility requirements.

"The World Trade Bridge processes on average 16,000 trucks daily, carrying goods valued at more than $300 billion annually," said U.S. Rep. Henry Cuellar (D-Laredo). "The creation of this FAST Lane will streamline trade and promote economic growth in the region."

Around 500 empty trailers will be processed daily and the hours of operation for FAST Lane will be Monday through Friday, 8:00 a.m. to 4:00 p.m.

"These improvements serve as vital assets to not only Laredo, but the entire United States economy," said Laredo Mayor Pete Saenz.
CBP officials estimate they process around 8,000 northbound truckloads daily at the World Trade Bridge facility.

"The ever-growing traffic volumes have far exceeded the limits of the present facilities and we will work hand in glove with our stakeholders at the federal, state and local levels to assist with improvements that will facilitate traffic at the busiest cargo facility in the southwest border," said David P. Higgerson, director of field operations at the CBP Laredo Field Office.

There were 195,918 commercial vehicle crossings at the World Trade Bridge in June, representing a 0.7 percent increase from the same time last year, according to the latest data from the city of Laredo.

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Long wait times at the border giving you the blues? Feeling squeezed by the tight bottlenecks at the bridge? Relax, you have options. We operate out of every port in Mexico and we can reroute your goods through other ports even with a border slowdown or shutdown. In addition to land freight, our air and ocean freight services cover both consolidated shipments (LCL) and containers (FCL). Call us today for a FREE quote or fill out our online form.

Mexican officials: wait times at Otay Mesa Port of Entry up to five hours

Delay Times at Port of Entry

Truck wait times on the Mexican side of the Otay Mesa port of entry have jumped as the inspection process lengthens, leaving trucks backed up for hours, said officials in Mexico.

"Both Mexican and American customs are spending more time reviewing the trucks – with wait times between four and four and one-half hours," said Salvador Díaz González, president of the Tijuana-based Industrial Association of Otay Mesa (AIMO).
The long lines for the commercial crossing checkpoint in Otay affects not only the companies and transporters, but also the people who [travel] through the area, since the [trucks] massing invade the surrounding roads, Díaz said in an August 14 report in elimparcial.com.

Carrier wait times in the whole Otay Mesa/Tijuana/San Diego market have been trending up since June 1 – up 30 percent to 133 minutes average per load/unload event per month.

The average wait time for commercial trucks in the market is 126 mins over the last year. This information comes from the FreightWaves SONAR platform.

While traffic may be affected in Tijuana, wait times are not affecting the U.S. side of the border. Wait times are hovering around 40 minutes, as of noon August 14, according to U.S. Customs and Border Protection.

With the FreightWaves SONAR Van Inbound Tender Rejection Index (VITRI.SAN) at 1.81 percent and dropping, carriers are still willing to accept loads into the Otay Mesa/San Diego market. SONAR's Van Outbound Tender Rejection Rate (VOTRI.SAN) is also around 1.81 percent, meaning there are no capacity issues in the market.

Díaz said he understands why officials have been stricter with inspections, but the negative effects are causing lower carrier productivity, more air pollution in the Tijuana area and traffic jams that affect others who drive in the area.

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U.S. Senators introduce $287 billion highway bill

$287 billion highway bill

A $287 billion highway bill proposal reauthorizing funding to maintain and repair the country's roads and bridges includes a first-ever title addressing carbon emissions and supporting electric vehicle infrastructure.

The legislation, a five-year reauthorization of the Fixing America's Surface Transportation (FAST) Act to be called America's Transportation Infrastructure Act of 2019, was introduced on July 29 by the Senate Environment and Public Works (EPW) Committee. The proposed funding for federal-aid highway programs is a 27 percent increase from the $226 billion authorized in the current legislation, which expires in October 2020.

"The [EPW proposal] is the most substantial highway infrastructure bill in history," said the committee's chairman, John Barrasso (R-Wyoming). "The bill cuts Washington red tape, so road construction can get done faster, better, cheaper and smarter. It will help create jobs and support our strong, growing and healthy economy. Infrastructure is critical to our country and we should responsibly pay for this legislation."

Tom Carper (D-Delaware), the committee's ranking member, said addressing air pollution in a highway bill will help move the country "toward a safer, more connected, efficient and climate-friendly transportation system" to keep up with the global economy.

"We're just getting started, but I look forward to moving this bill out of committee this week and the work ahead of us to get it across the finish line." The bill must be paired with a version from the U.S. House of Representatives that is not expected to be introduced until the fall of this year, at the earliest.

The Senate legislation increases funding for the Infrastructure for Rebuilding America (INFRA) grant program for freight projects to $5.5. billion, a 22 percent increase from the $4.5 billion authorized in the FAST Act. It increases the minimum amount of INFRA funds to go towards smaller projects from 10 to 15 percent, and sets aside $150 million per year for a pilot program that prioritizes projects offering a higher non-federal match. It would also create new transparency requirements for administering the grants.

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Regional Development Key to a Strong North American Trade Bloc

North American Trade Bloc

For many years now, a concern of mine has been that the purpose of free trade and the agreements that envelop trade between regions has not been properly explained or promoted to communities, especially at the grass roots level.

Recently, Guillermo Malpica, trade commissioner of Mexico and executive director at the American Chamber of Commerce in Monterrey, Mexico, paid San Antonio a visit for a series of roundtables and presentations on the United States-Mexico-Canada Agreement(USMCA). At an energy sector meeting with Malpica, San Antonio energy industry leaders investing in Mexico were expecting to get a sense of direction and clarity regarding Mexico's energy policies.

One roundtable participant asked "what industries are the winners and the losers" in the USMCA. When you ask questions like these, you are basically taking apart a macroeconomic tool and looking at the individual parts. Separate parts don't work unless they are put together like a precision clock.

These types of agreements are not meant to be dissected. Not unlike the cute little frog you dissected in school, the innards don't look pretty. Trade agreements are macroeconomic tools that are designed to benefit economies. Yes, there were industries that were hit very hard once NAFTA came into play, but those industries were not ready.

The signals were clear when Mexico agreed to enter the General Agreement for Trade and Tariffs GATT in 1978 (today the World Trade Organization). My father, the Deputy Director General for the Foreign Trade Institute of Mexico during the 1970s, would have conferences and meetings with Mexican manufacturers, warning them to be ready to compete, up their quality, and export.

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With U.S.-Mexico reaching agreement, trade tensions at southern border lessen

Mexico/ US Border Crossing
Canadian border with the USA. Canadian customs.

By Jeff Berman, Group News Editor • June 10, 2019

With last Friday's news that the United States and Mexico reached a deal that will put off the implementation of tariffs by the United States on Mexico, which it had planned to start today as a countermeasure to what President Trump called an "ongoing illegal immigration crisis" at the Southern border, it is likely cross-border trade stakeholders are breathing a collective sign of relief.

Had the U.S. tariffs come to fruition, it would have begun with the U.S. imposing a 5% tariff on all goods imported from Mexico and then raised to 10% on July 1, 15% on August 1, 2019, to 20% on September 1, 2019 and to 25% on October 1, 2019.

As previously reported, President Trump said in late May that tariffs would permanently remain at the 25% level unless and until Mexico substantially stops the illegal flow of aliens coming through its territory. And he added that if Mexico fails to act, tariffs will remain at a high level, with Mexican-based companies potentially moving back to the U.S. to make their products and goods, and companies that relocate to the U.S. not subject to tariffs or be otherwise impacted. Trump added that aside from immigration being the primary impetus for these planned tariffs that: "[o]ver the years, Mexico has made massive amounts of money in its dealing with the United States, and this includes the tremendous number of jobs leaving the country."

Well, quickly and fortunately, it looks like things are not going to get to that point, according to a joint declaration issued by the U.S. and Mexico that stated Mexico will "take unprecedented steps to increase enforcement to curb irregular migration, to include the deployment of its National Guard throughout Mexico, giving priority to its southern border."

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Delays at U.S.-Mexico border crossing hits autos, trucks still lining up

border slowdown

CIUDAD JUAREZ/MEXICO CITY -- Long delays at the U.S.-Mexico border crossing for goods destined for American plants and consumers are hitting the U.S. auto industry, and the gridlock reduced by half the number of northbound trucks that crossed the entry point last week

Washington's decision to move some 750 agents from commercial to immigration duties to handle a surge in families seeking asylum in the United States has triggered the delays at crucial ports on a border that handles $1.7 billion in daily trade.

"The situation in Ciudad Juarez is very serious because these auto parts go to plants in the United States and obviously they put at risk the operation in the United States," Eduardo Solis, the president of the Mexican Auto Industry Association (AMIA), said on Monday.

The North American auto industry is highly integrated and many car parts cross the border several times before they are finally installed on a vehicle.

Seventeen 17 hours before the crossing to El Paso even opened on Monday morning, trucks were already lining up in Ciudad Juarez to avoid the fate of some 7,500 trailers that failed to cross last week, said Manuel Sotelo, vice president at the Mexican National Chamber of Freight Transport's north division.

That is roughly half the number of trucks per week that usually cross there, carrying everything from car and plane parts to refrigerators, washing machines, TVs, cellphones and computers.

"This is not normal. We had never seen this before in Ciudad Juarez," said Sotelo.

Despite elevated costs, some Mexican exporters are turning to air freight to avoid the mile-long lines at the border.

"We're using charter (planes) which cost between $35,000 and $100,000 depending on the volume and merchandise," said Pedro Chavira, who heads the manufacturing industry chamber INDEX in Ciudad Juarez.

Air freight is typically a last resort used by automakers and suppliers to get parts to an assembly plant for just-in-time delivery.

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Ventus Global Logistics operates out of every port in Mexico and we can reroute your goods through other ports even with a border slowdown or shutdown. In addition to land freight, our air and ocean freight services cover both consolidated shipments (LCL) and containers (FCL). Call us today for a FREE quote or fill out our online form.