Usco Logistics Incorporated: The Mexican Proposition

Operational control has been a critical component for the success of USCO. Being one of the largest third party logistics corporations in the United States, USCO has nearly perfected their processes and has earned a good reputation for their quality of warehousing and logistic services among Fortune 500 companies. With little to no logistical infrastructure or identically positioned competitors in Mexico, USCO has an excellent opportunity to be the first in the field and can enter this market immediately. As they did in the U.S. and Puerto Rico, USCO will set a new standard for effective logistics and warehousing services. Their expansion into Puerto Rico paid off and their logistics operations flourished. No Mexican bank would be the right fit for USCO. The Mexican Bank facilities are nowhere near the standard of USCO’s facilities in the United States. Dim lighting and smaller square footage do not serve USCO’s purposes. Secondly, the Mexican Banks want to exit their warehousing and logistic business. Warehousing and logistics are not the banks area of expertise. These banks are interested in having a partner to pull out of the industry. Partnering with any Mexican bank would be ill advised, as they do appear to uphold the same standards and eagerness to succeed in the logistics business. Even though partnering with a privately owned warehouse appears to be a good fit for a joint venture, the upfront payment requirements do not match USCO’s culture and strategy. After considering all these choices, USCO did not find a good partner to share the risk of doing business.

USCO should venture into Mexico on their own using the research they acquired as well as their knowledge of the industry. Although more costly than partnering with a Mexican company, their achievements in the end will be greater. USCO would have to develop a new process of operations in Mexico. Their facilities must provide relatively easy access to all principal roads and highways to