The abrupt change in consumer habits forced companies to digitalize their operations and sales, but the challenges do not stop there, as companies will have to implement effective logistics systems to reach their customers.
With the boom in demand for food delivery, Costa Rican restaurant owners claim that their companies have given up part of the profits to assume the costs of making alliances with delivery applications.
Since last March, when the first cases of covid-19 were reported in Costa Rica, consumers have been subjected to severe restrictions on mobility, which has led to transformations in the forms of marketing.
After the difficulties generated by the restrictions imposed by Costa Rica on the entry of cargo from neighboring countries were overcome, the Costa Rican pilots denounce that the authorities of the region, far from applying reciprocal measures, have established "repressive measures."
Currently, transporting goods by sea between Central American countries can increase freight costs by at least 60% compared to the land option, which represents an obstacle to changing the way goods are transferred in the region.
As a result of the closure of the Penas Blancas customs crossing, on the border between Costa Rica and Nicaragua, some businessmen in the region had to resort to the sea route in order to deliver their orders.
Although the region's markets are not yet facing a scenario of shortage of raw materials or products, the restrictions imposed on freight transport are destroying the regional logistics chain.
Given this scenario of health crisis, the free transit of goods in Central America has been interrupted in recent weeks.
Faced with the advance of the coronavirus epidemic, businessmen in the region are asking citizens to follow only official recommendations to avoid giving way to disorienting versions that only contribute to generate instability and uncertainty.
In Central America, two countries have registered people infected with the virus. Costa Rica was the first to report cases of COVID-19 (also known as coronavirus) and so far the nation has registered nine infected people. Panama made its first case official on 9 March.
Since mid-July, the main companies transporting maritime cargo from the Port of Santa Tomas in Guatemala stopped operating the direct route to Europe, which will raise between 20% and 25% the costs of imports and exports.
After six decades of keeping the direct route to European ports in operation, the main shipping companies departing from Puerto Santo Tomás de Castilla in Izabal such as Maersk, Hamburg Sud, MSC, CMA-CGM, Hapas Lloyd and Sea Trade, decided not to re-operate the route concerned, leaving only one company with a multipurpose transport ship as an option to move cargo to Europe.
In order to successfully market fresh food, in addition to an attractive presentation to the market, good logistical performance is essential, which is expressed in terms of freshness, availability, and reasonably low logistical costs.
The fresh food sector is booming within the general food trade. For the success of its commercialization, besides an attractive presentation for the market and being able to offer a wide variety of products, also a good logistic performance is very important, which is expressed in terms of freshness, availability, and reasonably low logistic costs.
The costs incurred by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25% additional to the value of the goods, while in El Salvador and Costa Rica, amounts to 18% and 16%, respectively.
A study by the Economic Commission for Latin America and the Caribbean (ECLAC) specifies that the costs paid by businessmen in Nicaragua, because of excessive procedures and low efficiency of foreign trade systems is 25.3% additional to the value of the goods, followed by El Salvador with 18.3%, Costa Rica with 16.3%, Honduras with 15.8%, Guatemala with 14% and Panama with 9%.
Transporting one metric ton of goods in Central America is estimated to cost $0.17 per kilometer, while in developed countries the cost is around $0.10 per kilometer.
Transporting cargo more efficiently remains the greatest challenge that the countries of the region face to improve their competitiveness.
Guatemalan business leaders have denounced the fact that due to the crisis in Nicaragua that is now affecting the region, the cost of transporting goods by sea has increased between 30% and 40%.
Representatives from the Chamber of Industry in Guatemala (CIG) and the Guatemalan Chamber of Food and Beverages (CGAB), reported that due to the Nicaraguan crisis which started in mid-April and has deepened with every week that has passed, entrepreneurs have reported increases in their transportation costs caused by the difficulty of traveling through the territory under conflict.
Traffic congestion, the price of land and rents, and logistical facilities are some of the reasons why more and more companies in Costa Rica prefer to be located outside of San José.
Between 2016 and 2017 the number of companies set up in San José fell from 15,311 to 14,748, which is equivalent to a decrease of 4%, according to figures from the National Institute of Statistics and Census.
From November 7 to 10 companies related to the logistics sector will be meeting in San Pedro Sula to exhibit their products and services and participate in business rounds.
The event Expo Logística Honduras 2017 is being organized by the Honduran government, and will take place at the Expo Center Convention Center, San Pedro Sula.
From October 18 to 20, logistics and foreign trade companies will be gathering together in Panama City to take part in conferences on issues related to the sector.
The event, which will take place at the ATLAPA Convention Center, will involve companies and consultants in logistics and foreign trade.
The decree that reduces the timeframe for foreign cargo transport in the country, from 6 to 3 months, could lead to an increase in logistics costs for exporters and importers.
The decree by the government that aimed to eliminate the unfair competition that Costa Rican carriers say was caused by permitting six month stays for transportation trucks from neighboring countries could solve the problem, but could come very close to causing others for the logistics and foreign trade sector.
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