Protectionist duties, outdated infrastructure, security risks and low productivity are among the traditional logistics challenges in Latin America. "Lack of rail and road networks, customs issues and port delays are among the biggest issues," says Felipe Arbelaez, Panalpina's area head of marketing and sales for Andina (Colombia, Ecuador, Peru and Venezuela). "In addition, the third-party logistics (3PL) market is fragmented with many small to medium-sized providers in niche markets, and supply chain security is an additional concern in almost every country in Latin America."
But significant changes are underway, with even bigger ones on the horizon. Many ports are modernizing their facilities, and providers are investing in new technology to accelerate shipments. Imports and exports are expected to grow in 2013 due to improving global economies and additional free trade agreements, and the 2014 widening of the Panama Canal promises to create new logistics opportunities throughout the Americas.
"Shippers increasingly need international and express delivery service," says Alexandre Cecolim, managing director, logistics, FedEx Express Latin America and Caribbean Division. "Higher volumes of e-commerce and demand from consumers to receive their goods in a timely manner drive businesses to use express shipping services. Also, many of the goods shipped worldwide are becoming lighter and smaller, and thus easier to ship via express service."
The Outlook for 2013
With a robust economic environment in Latin America and increased international trade Poul Hestbaek expects continued pressure on the region's logistic infrastructure. "While there are a number of promising private port/terminal projects underway, there is a lack of substantial investments in the highway and railway systems in most countries," says Hestbaek, senior vice president, commercial for Hamburg Sud, Caribbean and Latin America West Coast.
As for trade flows, Hestbaek believes the level of consumer goods imported from Asia will continue to increase in 2013. "With a slowly improving U.S. economy, we may see higher level of housing construction, which will have positive impact on the importing of building materials from Latin America," he says. "We may also see an improvement of the flow of imported refrigerated food products from Latin America."
Looking at Mexico, Raul Barrera, regional head of industry vertical technology--Americas Region, Panalpina, expects a solid increase in...