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BAJA FERRIES

Crossing the sea of opportunity

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BAJA FERRIES

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PROFILE

CROSSING the

OF OPPORTUNITY Guarding the entrance to Mexico’s great blue Sea of Cortez are the rocky Baja California Peninsula in the west, and the Mexican mainland on the eastern side. Baja Ferries forms the crucial sea link that connects the Peninsula city of La Paz, to the mainland. But that’s only one part of the company’s relationship with the region. CEO Ariel Pozo joined Richard Hagan to discuss the company’s rich connections with La Paz and the crucial work his company is doing to uplift, empower and promote the community.

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aja Ferries is nestled in the port city of La Paz on the Baja California Peninsula in Mexico. Its large, modern ferries transport over two million linear metres and 300,000 passengers (plus their cars and cargo) per year, on the breathtaking passage across the Sea of Cortez.

As the main ferry service provider in the region, Baja Ferries plays a critical role in the lives of the surrounding communities who rely on its service to complete so many aspects of their daily lives, including staying connected to family, friends, social services, and work and business opportunities.

In recognition of the importance of its position in the local economy, the ferry operator has been laser-focused on constant reinvestment, diversification and growth to ensure that it is always comprehensively meeting the needs of not only its 2

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passengers but also the local community.

And as a ferry company, meeting its customers’ needs starts with its vessels.

High capacity cabotage Baja Ferries began life in 2003 running a vessel named California Star. With a capacity of 950 passengers and 2,000 linear metres of storage available, it was – at the time – considered too big by many observers. However, the vessel enjoyed a successful career dutifully running the Topolobampo to La Paz route. And in the end, its replacement was to be even bigger.

Eventually, it was time to upgrade the capacity on that route and California Star was replaced by the even bigger Mexico Star. At a cost of €27 million, it is also now the largest ferry in Latin America, boasting 2,715 linear metres of space and capacity for more than 900 passengers.

Ariel Pozo, CEO

Meanwhile, the company added more routes including Mazatlán to La Paz and Guaymas to La Paz, as well as a feeder operation between Manzanillo, Mazatlán and Guaymas.

Today, the company owns an impressive fleet of four vessels – Mexico Star, Baja Star, Oaxaca Star and Chiapas Star. In 2021, the fleet sailed over 180,000 miles combined.

Or put another way, equivalent to seven laps around the equator.

The ships operate across three terminals, namely Pichilinque, Mazatlán and Topolobampo, and are served by six sales offices. All of this is coordinated by its headquarters in La Paz. Altogether, the company employs over 450 staff.

Beyond its ferry operation, Baja Ferries offers its customers a complete logistics solution, including domestic (cabotage feeding), multimodal logistics, intermodal and Inter-Pacific corridor, contract logistics, project cargoes, national and international freight forwarding, bulk and breakbulk shipping operations, and shipping agency services.

Of these, its most in-demand service is the cargo and passenger ferry service provided by its Ro-Pax ferries through the

Sea of Cortez, running the roughly nine hour, 500km trip between the Peninsula and the mainland.

In October 2021, its intermodal services were recognised when Baja Ferries won the AMTI 2021 Silver Container award.

This award recognises companies that strengthen, develop and evolve intermodal services.

“This award is proof of our constant evolution to offer better services, and it’s a reminder that we must remain at the forefront of the sector to continue being a fundamental part of the economic and social development of the country,” emphasised CEO Ariel Pozo.

Contract logistics services offered by the company are especially comprehensive: they include the use of Baja Ferries’ transfer facility, cross-dock services, refrigerated cargo, storage and distribution and, most recently, first and last-mile transport services.

The crucial last mile With so much cargo crossing the sea every day, the company soon identified an opportunity to diversify into the logistics business. The majority of the goods required Baja Ferries

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BAJA FERRIES

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PROFILE

on the Peninsula must be carried across the Sea of Cortez, a task comfortably managed by the ships. But having arrived at La Paz, the next challenge faced by local businesses was how to get those goods from the port to their final destination.

In logistics, this is known as the ‘last mile’ and it is a perennial source of headaches, heartache and also evolution, for operators the world over. It was time for Baja Ferries to step in and solve the problem.

“We developed a logistics solution to solve the last mile challenge for our customers,” said Mr Pozo. “We developed relationships with all of the partners in the Peninsula, coordinating with all of the truck drivers. Together with our ships, we’re able to take the goods from the warehouse on the mainland, across the sea and to the final point of sale in the Peninsula.

It’s a door-to-door solution.”

vide it because by consolidating first and last-mile services, we’re far ahead of the competition,” Mr Pozo remarked.

To support its delivery services, Baja Ferries is building warehousing on the Peninsula for some of its regular logistics customers’ goods.

“We’re working together with these clients to offer not only last-mile logistics but also warehousing,” confirmed Mr Pozo, who said the company’s combined activities make it a significant player in the Peninsula.

“95% of all consumer goods and raw materials enter the Baja Peninsula by sea, of which we hold 72% of the market share. Our combined operations contribute 1.4% of the state’s GDP, which makes us key players in the economic and social development of Baja California Sur. “Our local warehousing and last-mile operations are a true point of difference versus our competitors,” he added.

Ahead of the competition This move comes as a direct response to its customers’ needs: “Our customers tell us their core business is sales, not shipping, and they’re increasingly seeking last-mile solutions. We’re happy to pro6

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Supporting local business Clearly, Baja Ferries is a company that is deeply invested in the needs of the communities within which it operates. And so it should be, as Mr Pozo pointed out.

“We have to keep thinking ahead, both in terms of changing vessels and adding infrastructure. The moment we stop investing in new, bigger vessels, we are losing the company’s edge in the Peninsula. We’re thinking of the area’s needs for the next five to ten years.”

While the company grows, so does its passion for reinvestment in and stimulation of the communities surrounding it.

With the onset of Covid, the people in La Paz and its surrounds including Sinaloa suffered greatly from the lack of tourism and general difficulties associated with the pandemic. Here, as Mr Pozo detailed, the company developed a range of measures to try and support the communities around it.

“Covid was a huge disaster here, many companies closed. As part of our efforts to protect smaller companies in the area, the moment Covid was declared, we acted. One of our first steps was to pay our local service providers in advance of service delivery. We wanted them to be able to focus on delivering their services and not on economic difficulties. After all, we had

the capacity to support them and we wanted them to feel like we were a partner rather than just a customer.”

Additionally, an internal memo was circulated amongst Baja Ferries staff containing a list of the small local businesses owned by family members of staff, with information about what each business offers. This initiative successfully created awareness amongst the staff about how they could best spend their money to support each other’s families.

“Small decisions like those add up and have a huge impact,” said Mr Pozo. “We are very proud of all of our efforts to support small companies.”

In closing, Mr Pozo drew attention to the company’s values, ethics and perspectives on business.

“Baja Ferries is a company that distinguishes itself for doing things the right way, for always having the best processes, for being an ally for the logistics sector, with society, and with the authorities, and for being the best option in maritime transportation.” n Baja Ferries

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