John Rippee, COO of the Tecma Group of Companies’ Secure Origins, Inc.  discusses the company’s U.S – Mexico border logistics intelligence solution.

LinkedIn with John Rippee

Tecma Group of Companies:

Hello and welcome to another in a continuing series of podcasts—Tecma Talk podcasts to be exact. They are recorded on subjects that directly have to do with manufacturing in Mexico or related issues.

In the case of what we are going to talk about today it would fall into the “related” category. We’re fortunate to have John Rippee joining us. John is the chief operating officer of one of the Tecma Group of Companies’ firms, it’s called Secure Origins. John maybe you’d like to introduce yourself to the listeners. and speak about exactly what it is that Secure Origins does, as well as on what is the significance of Secure Origins for manufacturers in Mexico?

John Rippee:

Yes. Hello Steve. Good day. Secure Origins is a U.S. – Mexico border logistics intelligence and a logistics efficiency company. Specifically what we do is provide what we’ve coined, the term “preemptive intelligence.” Essentially what we’re doing is monitoring commercial movements coming out of Mexico—there’s over 5 million importations coming out of Mexico every single year. What we do is take behavioral pattern analysis from commercial traffic and monitor those behavior patterns. If there is some type of a problem with a particular truck coming out of Mexico, we alert appropriate authorities as well as provide efficiency analysis for cross-border trade.

Tecma Group of Companies:

So in other words, if I have this correctly, on one side of the equation, we’re dealing with security issues of one kind or another, then on the other side of the equation, the technology that you’ve implemented that you use in Secure Origins is something that will provide U.S. – Mexico border logistics intelligence needed to actually help speed up the flow of trade. Is that a correct read of what it is that you just mentioned?

John Rippee:

Absolutely, what we’re talking about is transparency across the spectrum—across what we call the trade facilitation spectrum—so when you’re talking about a client, let’s say we have a truck and we’re trying to get a product to market, if we monitor the behavior pattern of that particular truck and he doesn’t get off of a pre-designated route, he doesn’t open his trailer doors—things of that nature, we know that that load has number one been secured through the entire route to a particular border as well as still secured. If he can provide that intelligence piece to let’s say a federal agency in this particular case the elephant in the room is always going to be Customs and Border Protection, if we can provide that feed to Customs and Border Protection, then they’re aware of it and they trust that particular shipment. In this instance, there’s no need to perform a high rate of secondary inspections, and therefore you’re eliminating a number of delays for getting product to market.

Tecma Group of Companies:

So in that sense what you’re saying is that the big line that you sometimes see from Mexico coming into the U.S., your product and your technologies on one part of the equation as I just mentioned are aimed at providing the U.S. – Mexico border logistics intelligence making that will make the line a shorter one.

John Rippee:

Yes, that’s exactly right. What we did here was we took a project, and we took a control group—several hundred trucks—and provided this security feed to Customs and Border protection from a number of different clients. Then we took an average crossing time being Monday morning from 8 o’clock in the morning to Friday night at 11 o’clock, the average crossing time for all of those trucks was 76 minutes when we began. When we finished we accomplished a 22 minute crossing time average for the control group, which is a significant reduction.

Tecma Group of Company:

So I would assume there’s a lot of gains to be had in economic terms from that for one thing. My understanding is that when the numbers were at 76 minutes, maybe a truck could only make two runs a day. I would assume that shortening the time creates an environment where there’s more efficient use of capital in terms of being able to turn that truck back and forth across the border more than what would be the case without the service that you offer.

John Rippee:

Oh, absolutely. The capital investment is only one of the returns on investment. When I say return on investment your investment is your time, your knowledge gain, your experience level becoming improved, as well as financial input. When you talk about the capital investment being able to turn faster, that’s only one aspect of it. If a shipper doesn’t have logistics intelligence, he or she has late shipments and frustrated customers calling in. This situation provokes additional costs of the human resource application answering questions regarding where that product is, and overnight shipments that you have to react to to get product to market because you have a contractual obligation to get it there. There is a fuel cost savings for not waiting on line in a truck, as well as a reduction in emissions coming along the border, so it’s also a green solution for operations.

Tecma Group of Companies:

Is it possible to tell us a little bit about the U.S. – Mexico border logistics intelligence technology? Is it GPS-based, how does it actually work in practice?

John Rippee:

Yes, for the most part, I would say 90% of our application is GPS-based. What we’re doing is because GPS is a proven technology today. It allows us to absorb data from the varying providers, let’s say it’s AT&T and they’re providing a data cell coming out of Mexico. What we do is absorb those data points for that GPS in a live format. We built an algorithm inside of a software backbone, and we’re able to monitor those behavior patterns such as those that I mentioned before—a pre-determined route, it leaves a particular facility, as well as we’re able to understand the impacts at the U.S. – Mexico ports of entry, how many secondary inspections we’re receiving, how long we’re in wait lines, and the impacts on a financial scale of those inspections in lines.

Tecma Group of Companies:

It sounds like this would be something that if an individual were the owner or in the management of the transportation company it would be useful as a U.S. – Mexico border logistics intelligence strategic planning tool in terms of knowing how much capital investment you’d have to make, knowing how much business you could actually take on, given what it is you have to move things back and forth. I could see a lot of applications as a business tool that would help to justify the costs and seeking out the service and actually contracting for it.

John Rippee:

Sure, yes with trucking companies. What we’re doing is providing the metrics on the crossing times— U.S. – Mexico border logistics intelligence that tells them how much operational readiness rate they actually have inside of their trucking fleet. They can start streamlining those operations and figure out a cost basis for each one of these crossings or movements of getting that product to market, so it is getting very interesting for managers out there as well as the cost reduction for having particular escorts or inspection stations—things of that nature because we now have a third party monitoring system monitoring shipments so we know that we’ve had an electronic escort. Now we didn’t need a live escort so those cost reductions are coming into play for those owners, absolutely.

Tecma Group of Companies:

Now I know that even on the congressional level sometimes you hear representatives from districts that are in the border areas, they often, in public discourse, bring up the fact that delays in commerce are actually having a negative impact on some of the border area or at least preventing the border areas from reaching their economic potential. There’s a lot of parties that have interest in seeing things move. I’m vaguely aware that there’s an effort on a collective basis between a number of stakeholders to work in a joint fashion to be able to make progress on this front. Maybe you can tell us a little bit about that, what it’s called and how you as an executive with Secure Origins and the company itself fit within the context of a broader effort.

John Rippee:

Sure. What we did here was we initiated a project it’s what the federal government likes to coin most new operations with private entities, and we coined this one “Project 21.” In essence it was a partnership between the city of El Paso, of CBP, and Secure Origins. What we did was to do was provide a security intelligence feed to CBP. CBP was very gracious and very excited about receiving data and U.S. – Mexico border logistics intelligence on what’s going on inside of the trucking industry.

For the most part when you look at delays on the border they’re mostly caused due to unknown situations, and what I alluded to earlier which was transparency is coming to fruition now. We’re able to provide data for the first time via the GPS signals, and absorb information from multiple data providers through our software. What we’re able to do is monitor and understand metrics analysis and efficiencies at the U.S. – Mexico ports of entry, which are government run. We can tell you how efficient they are, where their improvements are, how much secondary inspection rates are actually occurring on trusted shipments, and things of that nature. The benefits and transparency are experienced on both sides of the border, and by every possible stakeholder that we can implement into the system.

We are now expanding Project 21 south along the border towards Brownsville, Texas. We are hitting each one of the ports as we’re moving along. and it’s going very well. It’s being well-received.

Tecma Group of Companies:

Let’s talk about transparency; I know as far as trusted shipments are concerned, there is a provision by shippers can do certain things in a manner in which they self-report to be able to speed up the movement of their goods. Is that correct, and if it is correct can you expand upon that?

John Rippee:

Yes, self-reporting is nothing new as far as the concept is concerned.
The U.S. army has been doing it for 250+ years, one example is that if you’re a soldier in the U.S. army, and you go to the range and you shoot and you wind up with a bullet in your pocket. If you go back to your barrack’s room at night, every barracks everywhere has what’s called an amnesty box. You can walk over to the amnesty box and drop your bullet in the box, because it wound up in your pocket. Later on when you have a room inspection, you don’t get in trouble for having something that you are not supposed to have in your room. There’s nothing unusual there.

The FAA has a similar program, whereas a pilot makes a mistake and has a problem he can self-report that issue and not be fined. It’s a very powerful tool for these agencies because now all of a sudden they understand where the problems actually are and where the focus needs to be. People are coming through and trying to self-report are generally trying to make a system better and they are able to focus their efforts, their human resources, and their time and money on the actual issues where they need to be. We’re happy to report that CBP has stated that if you do self-report let’s say it’s a contamination meaning there’s some type of contraband on a certain truck coming up, if you self-report that activity you will not be penalized in the form of losing your CT certification.

Tecma Group of Companies:

Obviously if you make a mistake there is redemption.

John Rippee:

That’s always a good thing.

Tecma Group of Companies:

As far as where you are with the U.S. – Mexico border logistics intelligence technology that we’re discussing here today, I understand that you’re providing crossing times for commercial traffic that enables people to get a real time sense of what’s going on at the border, so that they can better plan what their moves are going to be. How is that being implemented? Is it available to people, and if so how would they go about finding this?

John Rippee:

This week we’re actually going to post a live crossing time feed on a local news outlet website: www.newspapertree.com in El Paso, Texas. It’s going to cover three ports of entry—the Ysleta port of entry, the bridge of the Americas, and Santa Teresa port of entry which is in Mexico but that is the region that everyone is concerned here locally.
They can go on there and see the live ports of entry. The feed will provide a very unique crossing time analysis. It’s the only one in existence that I know of today. We segment and break down every possible impact on the border. Meaning, there are so many agencies down there so were able to segment between Customs and Border Protection, customs and border protection secondary inspections, drug-dog inspects, DPS inspection stations, or whatever other agency will be out there. We’ll be able to understand those segments and give a whole list of crossing time for the first time on the southern border.

Tecma Group of Companies:

I’m going to end by asking you kind of a big question. Again, I’ll refer back to what I’ve heard from representatives in the Congress from border areas about the wet blanket that delays at the border constitute in terms of a figurative “wet blanket” being thrown on the economy of the region. If you get a lot of participation and use of your U.S. – Mexico border logistics intelligence services, and you are able to consistently lower border wait times, do you believe this will benefit the border economies?

 John Rippee:

You’re talking about hundreds of millions of dollar. It depends on which study you’re actually reading on any given day because the numbers are out there, but the bottom line is it’s a tremendous benefit if you don’t have the frustrations of logistics and product market registration issues, there’s no reason why any company should go farther than right at the border. It is a very lucrative proposition for any city that exists along the southern border.

What they want is the cities just to the south and their sister cities to do very well economically because that means tremendous positive economic impact for cross border trade. Revenues go up from sales of products within each sister city. The cultural impacts are dramatically generous. It goes on and on and on. Transparency is certainly the key. A preemptive U.S. – Mexico border logistics intelligence solution is clearly an answer that can take a huge bite out of this issue. Such a system is operational today. We’re pretty proud of it, and we’re only going to continue to improve it.

Tecma Group of Companies:

Given that this has kind of been a cursory look at this, I know that there may be listeners who have questions that are a little bit more in depth and specific, if somebody wants to get a hold of you, and ask other questions that you and I haven’t touched upon during this brief discussion, number one are you open to having people contact you and number two what is the best way for them to contact you.

John Rippee:

Of course, anyone can contact me at any time. My email is john.rippee@secureorigins.com and we have a website, secureorigins.com and they can visit there. We do about weekly postings for articles and press releases and things of that nature and everybody can keep up with the information flow of where we’re at, at any given time.

Tecma Group of Companies:

Okay, John I want to thank you for joining me today this was a very interesting topic and it has a lot of very significant economic ramifications and I wish you well in the future.

John Rippee:

Absolutely, good to talk to you, Steve.

Photo credit: Zach Dischner