The collector

MEX Logistics is already one of the leading players in the local wholesale courier market; however, the company is now expanding into India and freight services.

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By  Robeel Haq Published  December 1, 2005

The collector|~|mex2.jpg|~|Sanath Edirisinghe|~|MEX Logistics (Middle East Xpress) has carved out a significant niche for itself in the local wholesale courier market since its formation nearly four years ago. However, the company is now aiming to form a regionwide linehaul express network after opening a wholesale courier operation in Sri Lanka, along with its main partners, Linehaul Express and Cathay Pacific, as well as other airlines. MEX is also focusing on growing its freight operations by signing up partner agents across the Middle East and Africa. The local wholesale courier market was underdeveloped when MEX Logistics set up operations in 2002, which lead to some initial difficulties. The main challenge was persuading existing couriers to give their packages to a new and untested company. “There were some tough times at first,” says Sanath Edirisinghe, hub & strategic business manager, MEX Logistics. “When starting as a wholesale courier, the market is a lot more limited,” he explains. “Retail couriers can advertise their services to the public and wait for a response. In comparison, we had to really push our services to courier companies, which are more limited in number. We had to work hard to highlight our strengths and show the advantages of using our service.” MEX Logistics started by marketing its services on a global level, focusing on couriers without a Middle East network. It would then offer to provide the final leg for their local deliveries. “We needed to prove ourselves in the market,” says Edirisinghe. “We started by contacting companies outside the UAE who wanted to send their loads to Dubai for distribution. By offering these companies a network here, we started getting loads moving, allowing us to prove our capabilities. It worked well and got us noticed.” Linehaul Express, the general sales agent (GSA) for Cathay Pacific Wholesale Courier was one of the companies that noticed MEX Logistics. Subsequently, MEX Logistics was named as Linehaul Express’s UAE partner, which helped the local company build its regional airport-to-airport and airport-to-door express services. “Landing the Linehaul Express deal was a major achievement. It provided some new challenges, but it allowed MEX Logistics to work on expanding and improving our services to meet Cathay’s requirements,” says Edirisinghe. Cathay Pacific is now the backbone of MEX Logistics’s operations, helping the company to firmly establish itself in the market. However, the relationship has been a two-way street, as MEX Logistics has also helped Cathay Pacific identify and launch a number of new wholesale markets, including Shanghai, Manila and Tokyo. “The traditional routes for Cathay Pacific were Bombay and Hong Kong. As our relationship grew, we were able to jointly develop new routes, which were not previously explored by Cathay Pacific,” explains Edirisinghe. “We are now moving quite a bit of volume for them on these additional routes.” Through its relationship with Cathay Pacific, MEX Logistics also identified a gap in the underserved Indian market. It therefore opened a South Asian hub in Colombo, Sri Lanka, last year, with the aim of establishing a seamless service for local couriers. “There was pressure from Linehaul Express because Cathay was touching Colombo seven days a week and it wanted to do some transhipment loads from the Far East into South India. So, we launched the MEX Logistics Colombo branch and again, we became the handling and sales agents for Linehaul Express,” says Edirisinghe. MEX Logistics has also subsequently formed relationships with other airlines, as it looks to build a fully integrated regionwide linehaul express network. For instance, it has started an operation from Colombo to Chennai with Air Sahara, as well as becoming the handling and sales agent for Pakistani airline Air Blue between Karachi and Dubai. “We have been running the Air Sahara service for eight consecutive months without any problems. The agreement with Air Blue also works very well and figures as part of our expansion plans. As a wholesale courier, we are sending loads from Karachi to Dubai and back again on a daily basis now,” says Edirisinghe. To support its expansion plans, MEX Logistics is also investing in IT to enhance its customer service levels. Most notably, it worked with Insight Infotech to design an online track & trace software, which would let customers follow shipments not just while MEX Logistics was handling them, but also when they were passed onto other couriers and integrators.. “Having the right IT system is essential for delivering accurate services to customers,” says Edirisinghe. “We were previously manual, but introduced the web-based system so customers could keep themselves updated without needing to e-mail or phone our offices and wait for a response.” MEX Logistics is also now starting to diversify its offerings by looking at opportunities in the air and sea freight market, including daily consolidations to major cities in Europe, the USA, Middle East, and Asia. To this end, it is signing up agents and building on its strong local presence. “We are expanding into the freight area and have already acquired very strong freight agents, especially in Oman and Bahrain,” states Edirisinghe. “We are starting to move freight already. Recently we handled some demonstration material, which came from London to Dubai. It was a huge amount of cargo that needed careful handling, but we managed to complete the job successfully with help from Cathay Pacific.” MEX Logistics is now forming new partnerships in other parts of the world to expand further in this business. In particular, it is keen to tap into the huge potential available in Africa, although this presents a number of challenges. “Africa is a booming area that companies have not entered yet, possibly because of the credit facilities there,” says Edirisinghe. “It can be difficult to recover your money unless you have the right infrastructure, including a strong and reliable agent,” he adds. “However we are now talking to a Sudanese freight company, which is proving very useful. In fact, we already have a large order confirmed from these guys.” The planned entry into freight will take place slowly and steadily. However, MEX Logistics is confident that it will find success in this and other areas by building on its strengths and working with the right partners. “We are quite strong in the Middle East, but like the move into Africa, we want to expand into more international markets and start diversifying too,” says Edirisinghe. “We are looking to produce deals with the right partners and share each other’s strengths. This will help take MEX Logistics to the next level,” he adds.||**||

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