Press Releases

 

March 20th 2015- Latin America: Region of Extremes, Region of Opportunities

  • Cold chain opportunities are increasing due to the importance of agricultural exports such as flowers and growth in pharmaceuticals handling and clinical trials.
  • Mexico surpassed Brazil as the region’s top producer of automobiles.
  • Brazil and Mexico are the largest countries in the region. Combined, these two countries comprise almost 60% of Latin America’s GDP.
  • The widening of the Panama Canal has brought opportunities and economic benefits, not only to Panama, but also to the countries surrounding it.

A region of extremes, Latin America is geographically and culturally diverse. However, Ti’s latest report, Latin America Transport and Logistics 2015 finds that a recurring theme throughout this vast region is the need for infrastructure improvements and loosening of regulatory requirements. Indeed, opportunities are great but will be missed if infrastructure and regulatory requirements are not addressed. For example, cold chain needs are growing thanks to the rise agricultural exports and in pharmacuetical handling and clinical trials expanding in the region. As a result, there is a need for temperature-controlled warehousing and transportation. In addition, the widening of the Panama Canal is bringing new opportunities into the surrounding area including expansion of ports and airports to meet the potential transshipment needs.

According to lead writer of the report, Ti senior analyst Cathy Roberson, “The region’s greatest enemy is itself. In order for Latin America to reach its true potential, it will have to overcome its infrastructure issues once and for all as well as its bureaucratic and corrupt practices.”

While the opportunities are great, supply chains are unique for this region as companies work around infrastructure and regulatory issues. Many of these supply chains encompass Brazil and Mexico which combined, comprise almost 60% of Latin America’s GDP. However, the disparity between these two large economies is widening as Mexico enjoys its close proximity to the US and Brazil becomes further mired in taxation, regulations and strikes. Once the region’s export leader in electronics and automobiles, Brazil has now taken a back seat to Mexico.

Ti’s Trade Analyst, David Buckby notes that this disparity between the region’s largest economies will likely grow further as more companies move production to Mexico to take advantage of NAFTA credits as well as lower labor costs.

However, despite the heavy dependence on trade with North America, global trade is changing for this region. Trade with emerging markets in Asia, Africa and the Middle East is on the rise. Furthermore, intra-region trade is considered the fourth largest trade partner behind North America, Europe and Asia. But, as noted by a few supply chain practitioners, managing customs clearance between countries is difficult at best as much of it is still not automated.

Still, while there are challenges to operate in this region, its growing middle-class with its purchasing power combined with improving social and health programs are presenting new opportunities. How it will overcome itself as its major enemy will be played out in the years to come as Latin American countries look towards government reforms to stimulate a region rich in opportunities.

To coincide with the publication of ‘Latin America Transport and Logistics 2015’, Prof John Manners-Bell, Ti’s CEO, will be speaking at the forthcoming 2nd Brazilian Supply Chain and Logistics Summit in Sao Paulo on the limitations of Brazilian infrastructure.

About ‘Latin America Transport and Logistics 2015’

Ti’s latest report provides research and analysis into Latin America’s key industries along with country and top logistics profiles. New to this report is a comparative analysis of leading logistics providers. In addition, the report includes Ti’s market sizing of the region’s contract logistics, e-commerce, express/small parcel and freight forwarding sectors.

About Transport Intelligence

Transport Intelligence (Ti) is one of the world’s leading providers of expert research and analysis dedicated to the global logistics industry. Utilising the expertise of professionals with decades of experience in the mail, express and logistics industry, Ti has developed a range of market leading web-based products, reports, profiles and services used by all the world’s leading logistics suppliers, consultancies and banks as well as many users of logistics services.

Key Contacts

Michael Clover, E: mclover@transportintelligence.com T: +44(0)1666 519900

 

 

 

March 7th 2015 - Investment in infrastructure could see the growth of Indonesia’s logistics and forwarding markets rapidly accelerate over the next five years, says new Ti report  

  • Indonesia’s contract logistics market could grow at a compound annual growth rate (CAGR) of up to 14.4% over 2013-19
  • Total forwarding market to expand by a CAGR of up to 14.7% over 2013-19
  • Ocean and air markets to see double digit growth
  • Express and contract logistics markets to potentially grow by CAGRs of more than 20% and 14%, respectively, over 2013-19

Indonesia’s new government needs to remove obstacles to investment in its transport and trading infrastructure to realise its enormous economic and logistics potential, according to a new report by Transport Intelligence.

By most rankings Indonesia lags behind its regional competitors in South East Asia terms of logistics performance. However, Ti’s latest report - Indonesia Transport & Logistics 2015 - A New Dawn? – argues this could soon change if the new government of President Joko ‘Jokowi’ Widodo follows through on its promises to fund new transport and infrastructure investments and attract private investors and operators.

“Ti believes that if the country’s logistics performance could be improved by boosting investment, Indonesia’s low land and labour costs, huge domestic market and easy access to neighbouring ASEAN markets could make it a highly attractive location for manufacturers seeking alternatives to China,” said Michael King, Ti’s Head of Operations in Asia. “This would have huge benefits for all sectors of the logistics and forwarding business.

“However, if the new government does not follow through on its pledges to push through business-friendly reforms, then Indonesia’s economic and trade growth is likely to underwhelm.”

Ti’s market sizing analysis looks at each key logistics sector using three growth scenarios over 2013-19. The realisation of a scenario (low, medium or high) is dependent on Indonesia’s Logistics Performance Indicator reaching a certain threshold. Vast differences in growth rates are predicted when LPI scores differ.

At the upper range of LPI improvement, TI’s analysis found that the total forwarding market in Indonesia could increase by a CAGR of 14.7% over 2013-19. Also under the ‘high’ scenario, the contract logistics market in South East Asia’s biggest economy could increase by 14.7% over the study period, while the combined domestic and international express market could be worth €9,236m by 2019, up from just €2,923m now.

Indonesia’s air and ocean forwarding markets in the report’s ‘moderate’ (expected) forecasts are expected to grow by CAGRs over 2013-19 of 9.2% and 13.5%, respectively. However, under Ti’s ‘high’ forecast, this could rise to 11.5% for air forwarding and 16.9% for ocean forwarding.

“Low hanging fruit for the new President in terms of trade facilitation and logistics performance includes customs reform, encouraging adoption of a national single window and easing the process of setting up a business in Indonesia,” said King. “Land acquisition also urgently needs examining.

“But the key differentiator between our ‘low’ and ‘high’ forecasts is infrastructure development. For much of the last decade Indonesia’s ports, railways, airports and roads have been neglected. The privatisation of transport has stalled, starving the sector of investment and leaving inefficient state-owned enterprises in monopolistic positions that further discourage private operators from entering the market.

“If ‘Jokowi’ can address these failings then domestic and international trade and logistics demand across all verticals will rapidly accelerate.”

 

Notes to Editors

About ‘Indonesia Transport & Logistics 2015 – A New Dawn?’

Ti’s latest report offers unprecedented insight into the competitive environment for forwarders and logistics service providers operating in South East Asia’s largest economy, including analysis of which companies are already major players and what barriers market entrants face. In addition, the report features in-depth analysis of the road, rail, sea and air sectors including Ti’s exclusive market sizing and demand forecasts.

About Transport Intelligence

Transport Intelligence (Ti) is one of the world’s leading providers of expert research and analysis dedicated to the global logistics industry. Utilising the expertise of professionals with decades of experience in the mail, express and logistics industry, Ti has developed a range of market leading web-based products, reports, profiles and services used by all the world’s leading logistics suppliers, consultancies and banks as well as many users of logistics services.

Key Contacts

Sophie Brady, Head of Sales, Asia

+61 (0)2 8003 7208 or email: sbrady@transportintelligence.com.

 

Michael King: mking@transportintelligence.com

Head of Operations & Senior Analyst, Asia

 

 

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