The acquisition is strategic for the American company, since it will allow it to take advantage of benefits such as US foreign trade rules, which allow packages of up to $800 to be imported without paying taxes, according to a consultant.
UPS’s main objective in acquiring Estafeta is to increase its logistics capacity in Mexico in the courier and parcel sector, a growing market that last year reached a value of 2.5 billion dollars, according to the National Institute of Geography and Statistics (Inegi). ). Furthermore, the benefits promised by nearshoring are too great to wait for.
Between 2013 and 2023, the sector grew by 145%, which is equivalent to an average annual increase of 9.4%. In comparison, this growth is 6.5 times greater than that of the country’s economy in that same period.
The transaction, more than unexpected, is the result of an alliance that began in 2020 between the companies, with the objective that SMEs could take advantage of all the available infrastructure so that their shipments to the United States arrive in one day.
UPS had been studying the operation for a long time, they do things very calmly. Estafeta is a highly prestigious brand and its next steps were doubtful due to competition and internal issues, linked to its corporate governance. If the operation is approved and by joining forces they will have greater elements to compete with DHL and FedEx,” commented the foreign trade consultant, Manuel Díaz.
From their perspective, UPS seeks to take advantage of a United States trade rule known as “3,2,1,” which allows parcel companies to import up to $800 per package without paying taxes. An example of this would be bringing a container of swimsuits from China to Mexico, storing it in a bonded facility, and then shipping it to the United States via a parcel company in individual packages, thus avoiding taxes.
For the consultant, one of the main benefits for UPS in Mexico is Estafetas extensive infrastructure: six aircraft, 129 operation centers, four hubs (in San Luis Potosí, Mexico City, Veracruz and the State of Mexico) and more than 6,000 ground units of different sizes that allow them to reach remote places.
A business without burden
According to Inegi national accounts figures, last year the companies in subsector 492, corresponding to Couriers and Parcels, generated services worth 43,511 million current pesos, approximately 2,500 million dollars, considering the average exchange rate of 2023 .
Electronic commerce has been the main driver of the sector, with a compound annual growth of 37.5% in the last five years, reaching a value of 658.3 billion pesos in 2023, according to the Mexican Association of Online Sales (AMVO) in its most recent Online Sales Study, presented last February.
The Covid-19 pandemic was an accelerating factor, as social distancing measures increased demand for delivery and last mile services.
According to Inegi, in 2020, while the Mexican economy contracted more than 8%, the GDP of the parcel sector grew by 10.8%. In 2021, with the persistence of the virus and the lengthening of preventive measures, the growth of the sector skyrocketed to 19.4%, while the economy grew at a rate of 6%.
In 2022 and 2023, the sector’s growth was more moderate (8% and 5.4%, respectively), but continued to exceed the expansion of total GDP (3.7% and 3.2%).
In this context, it remains to be seen what will happen with the cargo service offered by Estafeta in Mexico, since it is currently a service limited to Mexican companies. In 2011, FedEx bought the Mexican courier and parcel company MultiPack, but did not include cargo services.
Finally, another objective of the recent purchase announcement, which seeks to further support customers who are bringing the manufacturing and distribution of goods closer to the US, is to face the challenges of current logistics competition, such as green logistics, delivery the next day and the cost of operation, according to Manuel Díaz.
