Locus sees major opportunities in Mexico’s e-commerce marketplace

Aiming to capitalize on the rapid growth of e-commerce transactions across Mexico, last-mile solutions provider Locus has expanded its operation and service offerings in the country.

To double down its efforts in Mexico, Locus has also partnered with Mexico City-based LastMile Consulting, aiming to better understand the regional market nuances to service existing and new customers.

“We’ve identified Mexico as a high-growth market and are in the process of establishing a legal entity and people on the ground,” Walter Heil, Locus’ senior vice president of developed markets, told FreightWaves. “We also have been working with and are expanding a relationship with LastMile Consulting, who has long, deep ties in the industry and the market.”

Silicon Valley-based Locus was founded in 2015 by Nishith Rastogi and Geet Garg to provide software solutions for last-mile logistics. The company currently operates across North America, Europe, Southeast Asia, the Middle East, Australia and India.

Locus has helped its customers execute 650 million deliveries across 30 countries, transporting goods over 43 million miles and saving $200 million in logistics costs, according to a news release.

LastMile Consulting is a logistics consultancy founded by Federico Tamayo, an industry veteran with more than 30 years of experience in the sector.

In Mexico, Weil said the companies see major growth opportunities in sectors such as fast-moving consumer goods, retail, courier services and final-mile delivery companies, such as 3PLs.

Locus already does business in Mexico with a large consumer goods manufacturer, as well as an online e-grocery and a few other smaller clients.

“We are building out a network of providers in the market,” Weil said. “When we speak with organizations who are looking to orchestrate their last mile of decision making, the way they optimize and route their orders, they need access to the leading providers in the market and they need technology to orchestrate the best decisions on a day-in and day-out basis.”

Mexico has the fastest growing e-commerce market across Latin America, expected to increase by as much as 32% annually between 2023 and 2026, according to a new report from Nuvei.

The Nuvei report, entitled “Perspectives and opportunities for the success of regional expansion in Asia-Pacific and Latin America,” details that a large part of Mexico’s e-commerce growth will be driven by the cross-border sales of products from Asia that currently represent 16% of all imports in this area.

The report said Asian manufacturers could account for up to 28% of Latin American e-commerce imports by 2026.

Locus’ platform is being used by clients across many industries, from multinational consumer packaged goods enterprises to e-commerce startups. The company’s software provides a range of fulfillment processes, such as order allocation, route planning, carrier and capacity management and analytics.

Weil said Mexico’s e-commerce market for last-mile deliveries is more diverse than the U.S., Canada and Europe. More Mexican companies boast private fleets, or captive fleets, to control the last-mile delivery of their products or services.

“Based on local economies and labor operating costs, we see a lot of companies in retail with their own e-commerce fulfillment and actual e-commerce platforms [in Mexico],” Weil said. “We even see fast-moving consumer goods and consumer packaged goods companies doing a lot of internal investment into the last mile, not just outsourcing to the area market.”

Weil also pointed out there is a very fast growing 3PL courier express parcel market in Mexico, with companies investing heavily in assets such as transportation and fulfillment centers.

“We see the growth potential there versus in more developed markets like the U.S. or Western Europe, where very few companies invest in their own captive fleets to do the last mile,” he said. “They’re outsourcing, which we support.”

The Locus mobile application is multilingual and aims to provide accurate location data that is also accessible and transferable.

“If you can’t give that power to the driver, it doesn’t do you a lot of good because the driver, the delivery person, is our customer’s touch point to their customer, so we take that very seriously,” Weil said. “In a place like Mexico City, you’re going to get better, faster delivery service as a consumer than you will in any market in the U.S. or Canada, or Western Europe. It’s just the access to labor and resources provides for an environment right now where for the consumer they get top notch delivery service.”