News Column

Freeing the Wheels of Commerce

July/August 2007, HISPANIC BUSINESS Magazine

Keith Rosenblum

Photo Illustration: Hector Holguin, founder and CEO of SecureOrigins, and his daughter Rosario Holguin, the company’s ch
Photo Illustration: Hector Holguin, founder and CEO of SecureOrigins, and his daughter Rosario Holguin, the company’s ch

Mexico is the third-largest U.S. trade partner, but the relationship is only as good as its most congested bottlenecks. And those bottlenecks have constricted as the United States confronts fears of international terrorism.

Studies show that the U.S.-Mexico border is among the least efficient in the world, says computer engineer Hector Holguin. Among the leaders in expeditious, safe, and technologically advanced customs services are Korea, Singapore, Hong Kong, and China.

"We lag terribly," he says. "We are distracted by so many other issues that neither we nor the Mexicans have come up with what's needed a genuinely seamless transaction."

Just in his hometown of El Paso, Texas, some 3,000 trucks cross daily and, according to U.S. Customs data, about one in every 20 are inspected.

Mr. Holguin would like to see routine shipments from exporters and importers whose good behavior has been guaranteed not get bogged down in inspections, while shipments where concerns might be well founded get the scrutiny they deserve.

"We now have the model," he says.

His model is generating interest among border states in the United States and Mexico, and Texas has announced an intent to invest in the company.

Compelling Reasons
At first look, the connection isn't obvious between moving soft drinks bottled in Ciudad Juarez across the border to an El Paso warehouse, and an accomplished El Paso engineer launching himself out of retirement and into long days, extensive research, and the tangle of municipal, state, and federal rulemaking.

But several compelling reasons led Mr. Holguin to create, in 2002, SecureOrigins Inc., a border-based partnership of high-tech innovators with a deceptively simple mission: move goods faster, more efficiently, and securely in a post-9/11 world.

Mr. Holguin, 71, whose pioneering work in computer-aided design and achievements over five decades cemented his name in engineering annals, couldn't resist the temptation.

Had it only been about making trade more efficient, he might have declined, for the fruits of his work had already been used to expedite commerce.

But this also gave him an opportunity to help out El Paso and its larger Mexican twin, Ciudad Juarez. He had already done that repeatedly, managing and starting up a stream of companies, including one whose value on the Nasdaq increased 55-fold in a couple of years.

And it gave him another opportunity to contribute to his country. A veteran, he had worked on flight tests for the Saturn Space Vehicle as aerospace project manager at Douglas Space Systems Inc., the predecessor to Boeing Space Center. Later, he worked on defense projects for the Department of Defense and the Canadian and Israeli armed forces.

Mr. Holguin, the CEO, and his team believe SecureOrigins technology can accelerate the glacial pace of commercial declarations. His team includes his daughter and chief strategist Rosario Holguin, CFO Raul Prieto, Chief Technology Officer Jens Pohl, board director Ron Munden, director of sales Gilbert Moreno, and Marty Loya, the director of project management. The SecureOrigins staff is holding at 12 employees until it can garner a contract.

Mr. Holguin says SecureOrigins has spent about $3 million in its five-year lifespan. Start-up capital of $500,000 came from the venture capitalist organization Camino Real Angels Group, which is now a minority shareholder.

As a research and development firm without contracts, it has yet to post any revenues.

A $2 million investment from the state of Texas, expected later this year, will see SecureOrigins issue warrants equal to a 10 percent stake in the company, which would give the firm a current value of $20 million.

Fruit Juice Dry Run
Customs already has confronted the problem of border delays with its two passenger traffic programs Sentri and Fast Pass. These programs, created with low-risk daily crossers in mind, utilize transponders and are now implemented border-wide but not at every crossing. They require drivers to register, pay additional fees, and use the same vehicle daily. Even then, Customs still has the option of stopping one of these preferred drivers for any reason.

The service, however, does not have an equivalent offering for commercial entries.

Enter SecureOrigins.

In a dry run, Novamex, the Mexican transporter of Jarritos-brand soft drinks, allowed SecureOrigins to devise and then audit a security plan that would ensure safety and efficiency. For several months, SecureOrigins became the brain behind and inspector of every fruit drink shipment.

Not only did SecureOrigins assist in security measures at the Mexican plant, but it then installed cameras at loading docks, and "locked" the cargo using intelligent software agents, or ISAs, developed by SecureOrigins.

ISAs, automated software modules which feature so-called "intelligent interaction," offer real-time, around-the-clock monitoring and decision-making in areas that are data-rich and yet require minimal human intervention. The SecureOrigins ISA platform includes GPS tracking and surveillance, Web cam coverage of roadways, and a geographic information system with interactive digital, aerial, and satellite maps.

The Jarritos cargo followed a pre-plotted route map to Mexican customs, U.S. Customs, and then to its U.S. warehouse. But it didn't stop there: The same program then followed the empty trailer back to Mexico.

All of this could be viewed on large-screen monitors at SecureOrigins's facility in downtown El Paso. With up-to-date images of Ciudad Juarez and El Paso superimposed on the screen, little is left to the imagination.

Alarms are activated with the slightest deviation in plans.

Pity the poor driver who wanders from his route, or the moment any unauthorized party tries to tamper with a door on the trailer. "We have one driver who didn't realize the sophistication of the program and wound up explaining why he had taken time to visit a girlfriend," Mr. Holguin recalls.

A second prototype of the system has been tested successfully in following shipments from the Port of Ensenada to the U.S. border near San Diego.

Veterans and Recruits
The Holguin solution to expediting trade safely starts with hiring the best engineers many of whom have worked with him for decades and finding four top-notch students, all still two years shy of earning their degrees, to work directly under them.

"We assign students a task we know can't be done, and in two to three months they show up with the job done and ask what else we have for them," Mr. Holguin says. "It never fails." The veterans' experience and the youthful energy and innovation from students at Texas, New Mexico, and Ciudad Juarez universities lay behind the Novamex project.

SecureOrigins is in the process of moving into a new facility equipped with a $10 million data center.

Just two blocks from its current facility, the site will allow students from University of Texas, El Paso to participate in launching Internet 2, the next generation of the Internet. It will also enable the university "unprecedented collaboration opportunities" with 80 Mexican universities and research centers.

Less than a year ago, the six governors of Mexican border states and four governors of U.S. border states endorsed SecureOrigins by name and have advocated its implementation. Following intense competition, the Emerging Technology Fund of the State of Texas has tentatively announced a $2 million investment.

SecureOrigins has been told that it ranks high on wish lists in California government, which has just issued general obligation funds to improve state and local transportation.

Once a California-Mexico corridor opens up, Mr. Holguin's two-decade relationship with another university, the California Polytechnic State University at San Luis Obispo will come into play. A spinoff of the university, CDM Technologies, will provide research for SecureOrigins.

In today's market, Mr. Holguin believes that SecureOrigins holds a one-year lead over anyone else interested in starting up a similar company. "It used to be that you could count on a three-year jump, but that has come down dramatically," he says.

Keeping that technological lead will be one of the group's goals, but where masters and students have daily contact, there will always be exciting corollary projects for entrepreneurs at heart, Mr. Holguin says.



Source: HISPANIC BUSINESS Magazine and Hispanicbusiness.com, Copyright (c) 2007 All Rights Reserved.


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