ICAT Outlines Supply Chain Challenges in Latin America

Editor’s note: With Latin America poised for explosive growth over the next decade, many U.S. shippers are evaluating the risk/reward scenario for enterprise penetration. In an exclusive interview with Jaime Cabrera, vice president, Latin America for ICAT Logistics, Inc. in Miami, Supply Chain Management Review explores some of the opportunities and challenges currently being faced in rapidly emerging market. Cabrera has over 20 years of expertise and experience in international export air freight, ocean freight, customs brokerage and international business development. Before joining the ICAT team, he began his freight career in 1990 and has held various positions at various companies that had an international focus, including LAN Chile airlines and two major freight forwarders. Cabrera also played a major role in building a gateway into Latin American and he hosted the first Latin America (LATAM) conference that brought together over 15 different top LATAM countries including Argentina, Brazil, Costa Rica, Chile, Dominican Republic, Mexico, Peru and Venezuela.

Supply Chain Management Review: Can you briefly outline which Latin American “hot spots” shippers should now be targeting?

Jaime Cabrera: Beside Brazil, Peru and Ecuador are becoming key players in the region, with both nations surpassing many of its regional neighbors in growth. Colombia and Panama, too, are growing with the new U.S. trade agreements in effect. Shippers should also track and evaluate progress being made in Argentina, Chile, and Paraguay.

SCMR: What global forces are at work to help Latin America grow?

Cabrera: Europe struggles to recover from huge deficits, while Latin America continues to forge new trade agreements well beyond its hemisphere. We are seeing a lot more business being done with Asia, for example, and this will only increase as the deadline for the Panama Canal expansion nears.

SCMR: At the same time, that creates some urgency to improve Latin America’s transport infrastructure, does it not?

Cabrera: Yes, you are quite correct. With much larger ocean cargo vessels being launched into the trade, South American ports will have to invest in all aspects of shoreside operations. We can see that U.S. ports – Miami, for example – are expanding at a very fast rate in anticipation of the same hemispheric trend.

SCMR: Let’s talk about risk. How will U.S. shippers profit by entering this emerging market without jeopardizing their current supply chains?

Cabrera: One of the major challenges that U.S. shippers face for expansion into the region is that each of the countries in Latin America had unique regulations and government rules. The best markets, such as Brazil, still put big obstacles in high bureaucratic institutions with complex tax structures.

We see tremendous opportunity for shippers sourcing raw materials – minerals and petroleum products – to get into this marketplace first. After they have prevailed over some of the regulatory challenges, other U.S. shippers will be able to evaluate the complexity of the region, and work with forwarders who can enable them to work effectively there.

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