Latin America – Region of Extremes, Region of Opportunities
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.
A region of extremes, Latin America is geographically and culturally diverse. However, Ti’s latest report, Latin America Logistics and Transport 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 these factors 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.
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.
To find out more about the report please contact Michael Clover at firstname.lastname@example.org