Problems faced by Latam freight forwarders
Created on July 1, 2022
In this article you will get:
While there are challenges that are common to most forwarders, the problems faced by Latam freight forwarders are a reflection of political and socio-economic differences that are common to the region. The freight forwarding and logistics industry is complex by nature and is getting even more complex as demand and competition increase.
Freight forwarding challenges in Latin America
According to a publication by the Inter-American Development Bank, the weak logistics performance of Latin American countries today is a major barrier to deeper international integration in the region.
Despite advances in the commercial integration of Latin America, there is still a gap in comparison to Asia and Europe. This is because, although the region has the necessary conditions, the insufficient infrastructure directly impacts the results and the logistical development of the region.
Most of Latin America relies on poorly built roads, insufficient energy distribution systems, outdated ports, and a limited number of airports for cargo transportation. The lack of adequate infrastructure makes it difficult to implement efficient freight forwarding processes, which in turn can hinder the strategic development of the region.
Other problems faced by Latam freight forwarders are cargo delays. Although delays are an inevitable part of any logistics operation, regardless of the region, delivery time in Latin American countries is significantly impacted by inadequate infrastructure and high bureaucracy at customs.
For example, according to the article published by Latin America Business Stories, more than 60% of Latin America’s roads are still unpaved, and in some parts of the region, it can take 60+ days for the package to reach the destination.
Likewise, transport to Latin America involves a lot of bureaucracy, because when the cargo arrives at the border the inspection authority has to make sure that the cargo has followed the necessary precautions.
Furthermore, a forwarder must keep in mind that it is a fragmented region and that each country has specific rules and procedures. And because of this, it affects the handling of the cargo, making the freight cost even more expensive than planned and quite time-consuming.
Although forwarders who wish to ease their entry into the region should adopt a careful and well-planned approach, the challenges of the region should by no means deter companies from pursuing opportunities in this market.
A region with great opportunities…
Despite the problems faced by Latin American freight forwarders, impacts the logistics processes, and demands a certain amount of market foresight, many freight companies consider Latin America a very valuable partner in a global supply chain.
Many companies have expanded their operations in the Latin American market in recent years, mainly because, although there are challenges, the business opportunities remain and are growing every year.
However, before you send shipments to any of the Latin American countries, remember to:
- Discuss with your partner the characteristics and regulations of the country in question;
- Research the customs issues and trade agreements that the region may have;
- Understand what requirements are necessary to transport that cargo in the required country;
- Research paperwork specifications.
The key to unlocking the region’s potential is to be aware of customs issues and customer support issues so that they are handled quickly and efficiently. Also, make sure you choose the right freight partner for your business who has the necessary experience in the region.
You can search for Latin American freight partners on Parnity, for example.
As you can see, in Parnity we have freight forwarders from several Latin American countries, such as Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Guatemala, Honduras, and Mexico.
Among the 450 forwarders worldwide that are part of Parnity, in our network we have more than 55 members from Latin America with complete profiles so you can decide which one will best meet the demands of your forwarding business.
Besides that, we are looking for forwarding companies in Bolivia, Cuba, El Salvador, Haiti, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela.
If you are a freight forwarder from one of these countries, know that Parnity is generating new business opportunities and your company can be the one that will take advantage of them. Click here to become a Parnity member and increase your forwarder’s business generation!
Explore your opportunities!
The problems faced by Latam freight forwarders are, indeed, obstacles to international transport and logistics in the region. However, the prospects for the region are favorable.
To achieve growth and keep up with the international market, local logistics in the Latin American region needs to redefine itself. And that is exactly what is happening in the region now… Integration projects are being developed and investment in infrastructure is being encouraged to promote Latin American productivity and competitiveness.