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North-south trade imbalance in Latin America challenges logistics sector
来源：shippingazette.com 编辑：编辑部 发布：2017/11/14 11:43:04
LOGISTICS services providers are stepping up their operations in Latin America amid an uptick in trade. However, shippers face serious challenges, including the trade imbalance and related capacity issues.
"Brazil is showing signs of improvement," Air & Sea Cargo Americas CEO Emilio Gonazlez of the Miami-Dade aviation department was quoted as saying in a report by London's Loadstar. "Miami has suffered because of the Brazil situation."
On the air freight side, US aircraft manufacturer Boeing noted that growth had been negative in South America since 2014, but had now reached positive levels, and American Airlines Cargo (AA Cargo) managing director for Florida, Caribbean and Latin America, Lorena Sandoval agreed with this observation.
"2017 has been very interesting for Latin American trade," she told The Loadstar. "It has been improving since 2016.
"The Brazilian economy is picking up and we think in 2018, slowly but surely, it will continue to grow.
"It's a strong market out of Latin America. It's a little bit challenging for us because of the capacity restraints, but next year we are changing the size of the aircraft and switching some routes. We may have limited capacity, but we do have a network."
In spite of the rebound in Latin trade, there are still several challenges to overcome in the region. Of particular concern are the lack of capacity and the imbalance between the northbound and southbound trades.
The perishables industry said it suffering from low margins and the high price of air freight, which it had to pay in both directions. It now must consider a switch to sea freight.
"We fly flowers six days a week," explained executive vice president of the Association of Floral Importers of Florida, Christine Boldt. "There were three days of no flights after the hurricane, and when airlines started again, there weren't as many flights.
"It has put the industry in a predicament. We had to get charters, but that's not a long-term answer, as you have to pay both ways and we only have northbound cargo."
She continued: "Now we are looking at sea freight, which we have never considered before. There has to be some relief - either find a southbound option to get lift, or shift to the sea."
21 Air business development director Rodrigo De Narvaez told The Loadstar that flows were challenging.
"There is no southbound cargo - there is a big imbalance. You can fill up with perishables and dry cargo in Colombia, Peru, Ecuador, Guatemala, Honduras and Salvador on a daily basis. There is a natural market northbound - gringos eat a lot. And the currency works very well and generates a positive flow to the US."
AA Cargo also said southbound was problematic, but it has been carrying technology products, said Ms Sandoval, while e-commerce was growing too.
On the sea freight side, CEVA vice president, global product development, Juan Carlos Serna said capacity was starting to grow.
"Capacity is growing on major tradelanes, but there is market pressure on southbound, which is impacting supply chains. Shipping lines are much more disciplined now and have changed routes and networks."
Other challenges include concerns that trade could be impacted by major elections due to take place next year in Brazil, Colombia, Venezuela and Mexico.
"It's a concern," said UPS president Americas Romaine Seguin. "It could stop trade."
Ms Seguin also pointed out that Latin America is yet to embrace technology, especially in Customs processes. "Four to eight times more is spent on Customs processes in Latin America than anywhere else in the world."
"Brazil is showing signs of improvement," Air & Sea Cargo Americas CEO Emilio Gonazlez of the Miami-Dade aviation department was quoted as saying in a report by London's Loadstar. "Miami has suffered because of the Brazil situation."
On the air freight side, US aircraft manufacturer Boeing noted that growth had been negative in South America since 2014, but had now reached positive levels, and American Airlines Cargo (AA Cargo) managing director for Florida, Caribbean and Latin America, Lorena Sandoval agreed with this observation.
"2017 has been very interesting for Latin American trade," she told The Loadstar. "It has been improving since 2016.
"The Brazilian economy is picking up and we think in 2018, slowly but surely, it will continue to grow.
"It's a strong market out of Latin America. It's a little bit challenging for us because of the capacity restraints, but next year we are changing the size of the aircraft and switching some routes. We may have limited capacity, but we do have a network."
In spite of the rebound in Latin trade, there are still several challenges to overcome in the region. Of particular concern are the lack of capacity and the imbalance between the northbound and southbound trades.
The perishables industry said it suffering from low margins and the high price of air freight, which it had to pay in both directions. It now must consider a switch to sea freight.
"We fly flowers six days a week," explained executive vice president of the Association of Floral Importers of Florida, Christine Boldt. "There were three days of no flights after the hurricane, and when airlines started again, there weren't as many flights.
"It has put the industry in a predicament. We had to get charters, but that's not a long-term answer, as you have to pay both ways and we only have northbound cargo."
She continued: "Now we are looking at sea freight, which we have never considered before. There has to be some relief - either find a southbound option to get lift, or shift to the sea."
21 Air business development director Rodrigo De Narvaez told The Loadstar that flows were challenging.
"There is no southbound cargo - there is a big imbalance. You can fill up with perishables and dry cargo in Colombia, Peru, Ecuador, Guatemala, Honduras and Salvador on a daily basis. There is a natural market northbound - gringos eat a lot. And the currency works very well and generates a positive flow to the US."
AA Cargo also said southbound was problematic, but it has been carrying technology products, said Ms Sandoval, while e-commerce was growing too.
On the sea freight side, CEVA vice president, global product development, Juan Carlos Serna said capacity was starting to grow.
"Capacity is growing on major tradelanes, but there is market pressure on southbound, which is impacting supply chains. Shipping lines are much more disciplined now and have changed routes and networks."
Other challenges include concerns that trade could be impacted by major elections due to take place next year in Brazil, Colombia, Venezuela and Mexico.
"It's a concern," said UPS president Americas Romaine Seguin. "It could stop trade."
Ms Seguin also pointed out that Latin America is yet to embrace technology, especially in Customs processes. "Four to eight times more is spent on Customs processes in Latin America than anywhere else in the world."