CFS 2018: Latin American carriers face challenges in tapping future demand
SAN DIEGO – Latin America is considered one of the most promising regions in terms of growth in demand for airfreight capacity due to the recovery of its largest economy, Brazil, and an increased demand for e-commerce. But those interested in tapping the market may be remiss to find there are some major roadblocks in getting products into the hands of consumers.
Such were the themes explored here yesterday at the 2018 Cargo Facts Symposium panel, moderated by Caryn Livingston, deputy editor of Air Cargo World’s sister publication, Cargo Facts.
Panelist Marcelo Penna, U.S cargo country manager for Azul Cargo Express Group, agreed that there is great potential for growth, especially in Brazil. “[There are] so many potential businesses in Brazil,” he said. “But there are some airports that either don’t have the proper infrastructure or don’t have the customs clearance or the cargo handling [capacity],” he said.
Chile-based LATAM Cargo, which offers maindeck and belly capacity throughout its extensive Latin American network, experiences a similar set of issues, said CEO Andrés Bianchi. “I think it’s infrastructure, processes and regulations that need to improve,” he said. “The facilities are not good, especially for a continent that mainly ships perishables commodities… Processes are cumbersome. Sometimes it takes too long to get cargo processed in and out of the plane.”
With infrastructural roadblocks standing in the way of accommodating larger volumes of cargo –especially perishable exports, such as produce, and imports like pharmaceuticals – and complicated cross-border processes, carriers face a complicated equation when it comes to network and frequency planning, the panelists added.
Speaker Jaime Alvarez Price, senior director of COPA Airlines Cargo, said that COPA adds on capacity when needed by working with third-party freighter operators. “We go ahead and try to figure out, ‘Okay, there’s a freighter going from Bogota to Quito,’” he said, adding that the strategy can be a “headache,” but one that still pleases clients. “We deal with them, and then you have your capacity,” he told the audience. “So that’s one of the ways we deal with not having a ‘both-ways’ demand for capacity.”
Latin America is well known for its success in exporting fresh produce to the United States and Europe, but the panel agreed that Latin America’s international trade dynamics are set to expand outside of that mold. East Asian markets are now a source of demand for Latin American goods, inciting carriers to add and increase frequencies to the region.
The imbalance in import and export volumes on aircraft is still a problem for carriers, but it is expected to decrease as Latin American economies improve and demand for e-commerce continues to inflate. Now, all stakeholders have to do is figure out how to fund the implementation of infrastructure throughout the region.
