FEATURE FREIGHT FORWARDER FOCUS LATIN AMERICA
Beyond Brazil Canales at Panalpina feels that Uruguay has big potential for logistics companies. Located between the two growing markets of Argentina and Brazil, both of which have a relatively unstable political environment, Uruguay can be used as an operational base from which it is possible to cover vast areas of its neighbouring countries. Elsewhere: “Chile is seeing more
moderate growth – it’s a more mature market, heavy on consumer and retail products. The industry verticals in Brazil and Argentina that are doing well are automotive and consumer products, and also healthcare to some degree. There are favourable conditions for
commodity prices – things like sugar, orange juice, soya, cotton and grains are a big factor in GDP growth for Brazil and Argentina – and this drives demand for logistics services,” he explained. Panalpina’s area manager Andina
“There are favourable conditions for commodity
(Colombia, Ecuador, Peru and Venezuela), Felix Riachi, notes that the countries for which he is responsible “are very much influenced by political situations – so volumes are growing in Peru and Colombia, both in terms of imports and exports. “Venezuela is the most challenging
prices ... and this drives demand for logistics services”
José Canales
because of the economic situation. Volumes there are down; for certain industries where we have traditionally been strong like high-tech, telecoms and automotive, volumes have dropped by 30-40 percent in the last few years. Consumer goods industries are more stable. But from an operational point of view and in terms of volumes, Venezuela is most challenging for us. This is totally out of our control because it’s due to consumption being down,” he said. Besides the difficulty of weak
demand, another challenge in the region is the level of red tape involved in air freight. But Oud said: “You just have to understand the requirements for documentation, and of course accuracy is key. There are a lot of regulations but you can work within them if you understand them and if you have strict processes in place.”
46 AIR LOGISTICS MANAGEMENT Ribeiro added: “South America is
one region with two languages and many different governments and Customs regulations – you need to be knowledgeable and have clear processes and a good understanding in order to operate here.” Currently, air freight in Brazil is
“booming”, Oud went on. “The only slight difficulty is that the real is very high, which makes Brazilian products expensive. The government may need to stabilise the real to keep Brazil’s exports competitive. In the last recession, its economy was about the only one that wasn’t affected. That shows its strength,” Oud feels. On top of this, the country is seeing
plenty of foreign investment; incentives are offered to encourage companies from other parts of the world to set up factories in Brazil.
Evolution Ribeiro outlined several changes that are happening in South America’s air freight markets more generally. First: “Latin America has been an interesting growth market even through the rough times the world has experienced lately. Brazil is booming, although it has slowed in the last couple of months. Peru and Colombia are also growing systematically. There are good opportunities in Argentina and Chile as well – but it’s really Brazil, Peru and Colombia that are leading the growth in the region.” The second trend is that customers’
expectations are changing. Standards have risen and customers now expect excellence – whereas 20 years ago it was all about price and good relations. “Today, of course, you still need good relationships, but operational excellence is at the top of the list,” Ribeiro observed.
Ribeiro
“operational excellence is at the top of the list”
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