Introduction to Sepomex and its Leadership
For the past two administrations, women have been at the helm of Mexico’s Service Postal (Sepomex), an organization under the umbrella of the Secretariat of Infrastructure. Over this period, six different leaders have taken charge, including two during the Peña Nieto administration and another two under the Lopez Obrador government. Among them is Violeta Giorgina Abreu González, who transitioned from working in the Mexico City government to managing Correos de México and Mexpost, a state-run parcel delivery service in a fiercely competitive market.
Financial Struggles and Operational Costs
Sepomex faces chronic financial weakness, with its income barely covering operational expenses as it approaches its 39th anniversary. In 2022, Sepomex generated only 1,611 million pesos from sales of goods and services and managed to secure 3,320 million pesos in budgetary transfers—barely double its revenue. To meet its expenses, Sepomex reportedly required 5,000 million pesos, with 98% (4,911 million) allocated to personnel services (3,891 million), general services (923 million), and the remainder for materials and supplies.
Client Base and Revenue Sources
Sepomex had 557 corporate clients for its franking and carried delivery service. Among the top seven—Afore XXI Banorte, Banamex, CFE, CDMX, IMSS, Teléfonos de México, and export company Uline—they accounted for 45% of total revenue. The Mexpost (messenger) service contributed only 215.4 million pesos, while international services brought in another 124 million.
Cost-Cutting Measures and Contractual Issues
To reduce costs, Sepomex has been using the same routes as the National Lottery to air-transport correspondence to 12 cities across Mexico via Aeromexico Cargo for the past two years. The ground service has been subcontracted to TUM Transportistas Unidos Mexicanos and TUM Logística since Sepomex assigned the contract for receiving, transporting, and delivering correspondence, shipments, and movable goods through postal trunk and primary routes. The maximum amount for this contract is 1,718 million pesos.
Both TUM companies have also benefited from another multi-annual contract awarded by Sepomex in October 2020, and they were the sole participants in the licitation process overseen by the SCIT. This situation raises suspicions of potential violations of Mexico’s Public Acquisition, Leasing, and Services Law.
Liabilities and Financial Risks
In 2022, Sepomex’s liabilities consisted of current liabilities (66.1% of total liabilities) and non-current liabilities (33.9% of total liabilities). The primary component of current liabilities was short-term accounts payable (88.6% of the current liability balance), while long-term liabilities comprised deferred liabilities (54.1% of non-current liabilities) and long-term provisions (45.9% of non-current liabilities). The latter included provisions for unfavorable lawsuits firmly established as of December 31, 2022, along with their updates based on payments or adjustments made during the ongoing fiscal year, reported by the Contencioso Subdirection.
The greatest risk lay in failing to recover the balance of accounts receivable, which increased from 29.4 million pesos in 2018 to 87.2 million pesos in 2022—a 195.8% rise.
Unsuccessful Attempts at Modernization
Neither the Telecommunications Reform nor the establishment of a new Digital Transformation Agency has helped Sepomex and Mexpost find a new path. The only near-change in these tumultuous weeks was the main occupant of Mexico’s Postal Palace.
Key Questions and Answers
- What is Sepomex and why is it relevant? Sepomex, or the Mexican Postal Service, is a state-run organization under the Secretariat of Infrastructure. It has been led by women for the past two administrations, aiming to modernize and compete in a challenging parcel delivery market.
- What are Sepomex’s financial challenges? Sepomex struggles with chronic financial weakness, as its income barely covers operational expenses. In 2022, it generated only 1,611 million pesos from sales and managed budgetary transfers of 3,320 million pesos.
- How does Sepomex attempt to cut costs? Sepomex has been using the National Lottery’s routes for air transportation and subcontracted ground services to TUM Transportistas Unidos Mexicanos and TUM Logística.
- What are the contractual issues faced by Sepomex? Concerns exist regarding potential violations of Mexico’s Public Acquisition, Leasing, and Services Law due to the lack of competition in awarding multi-annual contracts to TUM companies.
- What are Sepomex’s liabilities and financial risks? Sepomex’s liabilities consist of current (66.1%) and non-current (33.9%) components, with the main risk being the potential failure to recover balances in accounts receivable.
- Why haven’t modernization efforts succeeded for Sepomex? Despite the Telecommunications Reform and the creation of a Digital Transformation Agency, Sepomex has yet to find a successful path for modernization.
