In Central America the cost of ground transportation is twice that compared to Africa and four times that of most competitive economies.
From a statement issued by the World Bank:
Central America/WB: High costs of land freight transport, an obstacle to competitiveness
Costs are twice those in Africa and four times more than in OECD
SAN JOSE, March 6, 2014 - A new regional World Bank study shows that the lack of competition in the sector of road freight transport in Central America raises the cost of moving goods to being double that of those in Africa and up to four times higher than in more developed economies.
Agexport is organizing a seminar on the main issues to be taken into consideration by Guatemalans exporting products to the Mexican market.
A statement from the Guatemalan Exporters Association (Agexport) reads:
At present, 4.3% of Guatemalan exports are destined for Mexico, which include products such as natural rubber, textiles (fabrics or knits), paper and cardboard manufacturing, beverages, and liquor, among other things.
Conflicts of interest between carriers and the apathy of the authorities of Costa Rica and Panama have kept the border blocked for all regional trade.
EDITORIAL
It's not just that immigration and customs officials do not provide a 24 hour service, as is needed, and as occurs at other Central American borders, but that in Paso Canoas, the governments of Costa Rica and Panama are not exercising their authority in a responsible manner, resulting in conflicts for one reason or another, with consequent blockades and closures that produce serious economic losses not only for Panamanians and Costa Ricans, but also for all Central American companies whose imports or exports pass through this border.
The implementation of scanner-based inspection of cargo at customs increases the cost of moving goods in the region.
Both Panama and Nicaragua have contemplated implementing scanning systems or X-rays to inspect cargo arriving at the port terminals, the first of these two countries in its inter-oceanic canal, and the second in the one it is dreaming of building.
The company Maersk Line has restructured its service between Asia and the U.S., using the Suez Canal rather than the Panama Canal, mainly for reasons of profitability.
This was the justification given by Sobren Skou, chief executive of the company, in a statement to The Australian Financial Review.
According to the official, Maersk Line will send through the Suez Canal a boat that can carry up to 9,000 TEUs (a unit of measurement equal to 20 feet), instead of using two ships of 4,500 TEUs (maximum capacity) through the Panama Canal .
Businesses who provide agricultural materials in Guatemala are complaining about delays and additional costs related to the review of containers with chemical precursors.
After the detection in Guatemala of the manufacture of synthetic drugs, mandatory controls have been introduced on containers loaded with chemical precursors, led by the Attorney General, the Division of Narcotics Analysis and Information (Daia) and the Superintendency of Tax Administration (SAT), in the ports of Quetzal and Santo Tomas.
Production and logistics inefficiencies arising from their small size means that small scale producers have profit margins that are 19% lower than those of large companies.
An article in Elfinancierocr.com, comments on the ECLAC study "Panorama of the integration of Latin America and the Caribbean 2011-2012",which states that "logistics is a key dimension that influences the competitiveness of enterprises and their inclusion in value chains. "
Insecurity in the Central American countries increases the costs of land freight transport; in the last year alone it required an additional $20 million.
Hiring private security guards, patrols and assisted GPS satellite systems are some of the costs that need to be paid in order move goods in Central America.
The cost of a patrol to accompany a trailer from one border to the capital starts from $150, while for a custodian guard you can pay up to $87.
Advances made in the past two years in the Central American customs offices are still not sufficient, and related costs amount to 38% of logistics costs.
The best advances have been made in customs processes relating to merchandise transported between Central American countries.
Investigating the topic Elnuevodiario.com.ni reports that "The biggest problem is imports from countries like the U.S.
The increased activity which comes from being a global logistics hub, expected to increase even more when the expanded canal is operating, requires an all encompassing regulatory framework.
Cargo agency representatives agree that the lack of a regulatory framework leads to situations where the problem is solved at the discretion of the officer involved.
Distribution and logistics are booming areas in businesses, who need to invest more in process automation and improving delivery times.
The international consulting firm Miebach, from Germany, has conducted for the first time a regional study on distribution and logistics among Central American companies, with the participation of 238 companies, 80 of them in Costa Rica (39% of the total).
Taking time to eliminate hidden costs in business may be the best short-term investment.
In the article by Omar Becerril at Altonivel.com.mx, he highlights some of the types of expenses in which businesses often incur. Even highly efficient processes may be covering up unnecessary costs that can be avoided.
1. Cost of obsolescence:
Nothing is more detrimental to sales of products than to look old next to the competition.
Panamanian companies have a total logistics sales cost of 12.4% where the average in Latin America is 14.7%.
These figures are the result of a survey conducted by the Latin America Logistics Center (LALC), at the request of the Chamber of Commerce and the National Secretary of Science, Technology and Innovation (SENACYT).
María Rey, LALC consultant, told Prensa.com: "The results are very positive and confirm that logistics costs are lower in this country than elsewhere in the region. However, these costs could be lower if Panama made the necessary investment in technology and human development. "