Condition of the logistical infrastructure in South & Central America. Rasmus Jensen and Hudson da Silva Kuehne + Nagel
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1 Condition of the logistical infrastructure in South & Central America Rasmus Jensen and Hudson da Silva Kuehne + Nagel
2 Content Container seafreight overview p. 03 Airfreight overview p. 07 Customs and documentation p. 12 Domestic transportation p. 20 Conclusion p. 24
3 Container seafreight overview
4 Situation of container seafreight South & Central America Comprehensive port and service coverage to facilitate trade and business development Weather, congestion, strikes and productivity can be a challenge in South & Central American container sea ports 4
5 Container seafreight service overview 16 main services + 70,000 TEU capacity connecting North Europe directly Central America 5 services 27,000 TEU Mexico 4 services 21,000 TEU Colombia 4 services 22,500 TEU Ecuador 1 service 2,500 TEU Peru 2 services 19,000 TEU Chile 2 services 19,000 TEU Caribbean 5 services 19,000 TEU Brazil 4 services 20,000 TEU Uruguay 3 services 18,000 TEU Argentina 3 services 18,000 TEU 5 Source: SeaExplorer
6 Container sea ports overview 65 main ports + multiple terminals with varying infrastructure Mexico 5 ports Caribbean 8 ports / Cartagena Central America 15 ports / Panama Colombia 4 ports / Buenaventura Ecuador 1 port / Guayaquil Peru 2 ports / Callao Chile 9 ports / Valparaiso Brazil 14 ports / Santos Uruguay 1 port / Montevideo Argentina 6 ports / Buenos Aires 6
7 Airfreight overview
8 Situation of airfreight South & Central America Potentially the biggest challenge for airfreight in the region is lack of capacity and the imbalance between the northbound and southbound trades. Majority of the countries do allow max 3-5% difference between actual weight and hawb weight. 8
9 Airfreight service overview North Europe market: +520,000 tons shipped in 2017 Central America 10,760 tons Mexico 79,533 tons Colombia 55,640 tons Ecuador 148,786 tons Peru 73,566 tons Chile 28,850 tons Brazil 92,502 tons Uruguay 3,439 tons Argentina 22,915 tons 9
10 Main cargo airports overview 37 main airports with connections for North Europe Mexico 5 airports / Mexico City Caribbean 7 airports / Havana Central America 7 airports / Panama Colombia 1 airport / Bogota Ecuador 1 airport / Quito Peru 1 airport / Lima Chile 1 airport / Santiago Brazil 10 airports / Sao Paulo Uruguay 1 airport / Montevideo Argentina 3 airports / Buenos Aires 10
11 International gateways Miami and Panama Miami AMS instructions must be followed (delay and costs) Accurate commodity description on HAWB Customs and border control requirement to enter Harmonized tariff schedule # on HAWB (reject for export). Panama Easy to expedite customs procedures Free trade zones 7 key Airlines covering all major Latin America cities Road connection through Central America and Mexico 11
12 Customs and documentation
13 Customs & Documentation South & Central America Customs and documentation might seem complicated but it is possible to navigate Discrepancies can generate fines and extra costs (and time investment), therefore it is important to understand the local procedures and regulations Customs and documentation are generally more time consuming and more expensive compared to North European countries 13
14 Customs and documents Brazil imports Glossary Check List Documents CNPJ: National registration number of legal entities NCM: Harmonized tariff schedule INFRAERO: Government owned airports SISCOMEX: Integrated foreign trade system SISCARGA: Electronic manifest system RADAR: Electronic power of attorney in custom systems CNPJ: Required in the B/L (consignee information) NCM: Required in the B/L (goods description) SISCOMEX: DDP (Delivery duty paid) not allowed in Brazil SISCARGA: 72 hours prior vessel arrival (penalties and delays) RADAR: Approval up to 60 days (renewed yearly) Commercial invoice (original signed) Packing list (original) BL or AWB (issued abroad) Import License (issues in Brazil) Certificate of origin Declaration of import (issued in Brazil) Certain group of products require special approval from government 14
15 Customs process flow Brazil imports Monday to Friday 8:00 AM to 6:00 PM (Saturday 8:00 AM to 1:30 PM) Arrival in Brazil No further check Cargo cleared/ready for Delivery 1 working day Import declaration issuance through customs system Documentation check Cargo cleared/ready for Delivery 3 working days Customs system randomly leads import declaration to one of 3 channels Documentation check & Physical check Cargo cleared/ready for Delivery 7 working days 15
16 Customs and documents Colombia, Peru and Chile Colombia Peru Chile Commercial invoice - Quantity and costs - INCOTERMS - Good description Packing list Power of attorney Tax registration Custom entity certificate Usage of Cartagena (instead of Buenaventura) speeds on delivery Commercial invoice - Original (stamped and signed) - English (Spanish to speed up process) Goods certification (institute in Peru) - Food, footwear, Chemicals Industrially manufactured goods must be labeled with: - Product name - Country of origin - Net weight and volume - Peruvian ( RUC) address of importer - Dangerous raw material (if applicable) - Medical treatment (if applicable) Original documents to release cargo Documents 7 days prior cargo arrival Custom brokerage NOT allowed by freight forwarders Correct and on time documentation allows for directly cargo pick up (no storage) No import tariff on EU produced products Usage of Iquique reduce lead time, increase connections and provides free zone operation 16
17 Domestic transportation
18 Domestic transport South & Central America Domestic container transport is generally dominated by trucks and significantly different across the countries Quality of roads and inland distances influence domestic transport. Road security is another important factor to consider 18
19 Domestic transportation Colombia, Peru and Argentina Colombia Peru Argentina 70% of cargo is transported by truck 25usd billion in road infrastructure (2021) 75usd billion in transportation infrastructure Cut lead time by 30-50% Reduce transport cost between cities and mountains National (15%), regional (15%) and local (70%) roads 75% of national roads are paved 10% of regional roads are paved 2% of local roads are paved 40% of roads administered by private companies 90% of cargo moving by road km of national highways km of national provincial roads (40% in bad condition + safety issues) Route 9: Buenos Aires to Cordoba Route 40: Andes range Route 3: Buenos Aires to Ushuaia km of railways (quality and speed slow) 19
20 Conclusion
21 Conclusion Logistics in South & Central America Comprehensive port infrastructure Trading can be difficult Documentation is strict, with increased bureaucracy and regulations subject to fines Inland transport varies in quality and security Understand the local regulations Have a knowledgeable and experienced partner 21
22 Thank you It has been a pleasure
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