Already working together in China and South Korea, Porsche and DB Schenker extend their long-running relationship to Canada, where they opened the automaker’s first parts distribution centre in Mississauga, Ontario this year. What happens when you take a global manufacturer known for its high-performance cars and combine it with a global logistics provider that gets shipments from Point A to Point B as fast and frictionless as possible? The answer: a long-term partnership between Porsche and DB Schenker that this year is expanding into new terrain. Already working together in China and South Korea, the automaker and the logistics provider are extending their alliance into Canada, where in October 2019, they opened a brand new, 176,000-square-foot parts distribution centre (PDC) in Mississauga, Ontario. For Porsche, DB Schenker will manage the parts storage and inventory management; picking and packing; and dispatch to the final destination (in Canada). The new facility is expected to ship about 282,000 orders during its first year in operation. The global logistics provider will work with the manufacturer of high-performance automobiles to run a streamlined logistics process that caters to Porsche’s highly-discerning customers. Previously, Canadian Porsche Centres received their spare parts and lifestyle accessories from three PDCs in the U.S. The 3PL of Choice George Fremis, Manager, Parts Operations & Logistics, Porsche Cars Canada, Ltd., says the automaker selected DB Schenker for its broad logistics service portfolio, its track record in the automotive market, and its high service levels. “DB Schenker was not only the most cost-effective bid to come out of our RFP process,” says Fremis, “but it was also the most highly-qualified third-party logistics (3PL) company to run our PDC.” A Great Match According to Fremis, Porsche sources its car parts directly from the company’s main warehouse in Germany. The new facility will be Porsche’s first PDC in Canada, and roughly 140,000 square feet of it will be run entirely by DB Schenker staff. The remaining space will be used as a national training centre, vehicle storage, and potentially a “Porsche Forum” to showcase the brand, its innovations, and host customers. “DB Schenker is familiar with our brand and what it represents in the marketplace in terms of products and services,” says Fremis. Because the window of driving opportunity is limited in Canada, where the winters can be harsh, keeping cars operational and on the road is more important than ever for Porsche Centres. “If your vehicle is in for a service or repair,” Fremis says, “you want to make sure your Porsche is on the road as quickly as possible.” When selecting a 3PL to work with, Porsche factored in cost and capabilities, but also looked closely at how well its logistics partner could emulate its own high levels of customer service and professionalism. “Porsche Cars Canada has a very good comfort level with DB Schenker, which knows what we need from a service point of view,” says Fremis. To enforce that understanding even further, the global logistics provider brought in the project manager who had successfully orchestrated a similar setup for Porsche in South Korea. By supporting a seamless, fast supply chain for Porsche Canada’s automotive parts and related accessories, the global logistics provider is helping to ensure that the carmaker’s global brand continues to meet and exceed its customers’ expectations. About Porsche Cars Canada, Ltd. Established in 2008, Porsche Cars Canada, Ltd. (PCL) is the exclusive importer and distributor of the Porsche 911, 718 Boxster and 718 Cayman; Panamera; as well as Cayenne and Macan. Headquartered in Toronto, Ontario, since 2017, PCL employs a team of more than 50 in sales, aftersales, finance, marketing, retail development, and public relations. They, in turn, work to provide Porsche customers with a best-in-class experience in keeping with the brand’s 70-year history of leadership in the advancement of vehicle performance, safety, and efficiency. In 2019, a Parts Distribution Centre will open its doors and service the countrywide network of 19 Porsche Centres. PCL is the dedicated subsidiary of Porsche AG, headquartered in Stuttgart, Germany. In 2018, Porsche sold an unprecedented 8,904 units in Canada, up 7.9% over the prior year. At the core of this success is Porsche’s proud racing heritage that boasts some 30,000-plus motorsport wins to date. Follow us: twitter.com/porschecanada | facebook.com/porsche | instagram.com/porschecanada For Porsche apps: https://www.porsche.com/usa/apps-and-entertainment/apps/ Making the Grade: DB Schenker & Porsche Pair Up to Open New Warehouse in Canada syndicated from https://topmoversblog.wordpress.com/ via Tumblr Making the Grade: DB Schenker & Porsche Pair Up to Open New Warehouse in Canada
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This year has been full of news, trends and opinions for the logistics industry. With so much going on, and so much being written, what’s being read?Now That’s Logistics aims to educate the discerning logistics professional on what’s going on in the industry today, and what to look out for in the future. While the blog covers subjects including air, ocean and land transport, trade routes, customs, case studies, and trends, it’s the reader that decides what stories become popular and shapes the direction of future content. When it comes to trends you want to be one step ahead of the competition and this is evident by the interest in stories such as trends affecting ocean cargo, aerospace logistics, retail logistics, Incoterms and technology. As a topic, technology is of increased importance to the logistics professional and stories including smart technology and how technology will revolutionize warehouses have been of great interest. Here are the top stories read this year on Now That’s Logistics: Top 15 Ports in the Americas 2019 There was a time when the Americas (or North America and South America combined) was a major geographic inconvenience for ships needing to sail east from Asia to Europe. The Panama Canal helped change that when it opened in 1914 — coincidentally, just days after the start of WWI — making the journey much faster and economically viable. Today, 105 years later, the Americas play a larger role economically than geographically. But for ports up and down North and South America, both factors impact who’s winning business. Top 10 Airfreight Ports in Latin America Latin American and the Caribbean airports account for 5% of the global share of international air freight traffic and 4% of the global share of domestic traffic, according to the 2017 ACI World Airport Traffic Report. Considering that air cargo itself represents less than 1% of all cargo shipped, that may not sound like much. But when you consider that the value of the goods shipped by air is an incredible $6 Trillion USD, or 35% of the value of all goods shipped annually, it puts LATAM’s 4-5% share — and the billions of dollars it represents — into perspective. 2019 Airfreight Outlook: Strong, Steady, Predictable Coming off an extremely strong year in 2017, the world’s air freight market fluctuated at certain points in 2018, but for the most part remained stable. “There was a strong push during the second half of 2017, with a lot of companies restocking after a busy first half of the year,” observes Asok Kumar Executive Vice-President of the Americas Region at DB Schenker. “That created a capacity shortage; air freight shipping space was tight.” The shipping climate in 2018 took some by surprise, and particularly when peak season (i.e., the months of September, October, and November) didn’t produce the same demand for air freight that it did the previous year. “We would have expected stronger volume during those months leading up to the holidays,” says Kumar, “but that didn’t really happen this year. As a result, the market isn’t as strong as we would have anticipated to be at this point in the year.” The Top Stories of 2019 on Now That’s Logistics syndicated from https://topmoversblog.wordpress.com/ via Tumblr The Top Stories of 2019 on Now That’s Logistics Updated Incoterms® 2020 Rules will go into effect January 1, 2020. The International Chamber of Commerce (ICC) set out to make Incoterms® 2020 easier to access and use and has included detailed examples of the responsibilities for both importers and exporters under each rule. Incoterms® are the internationally recognized standard for both international and domestic contracts for the sale of goods. The rules are developed and maintained by experts and practitioners brought together by the ICC and are the standard in international business rules setting trade terms to help traders avoid costly misunderstandings and identify which fees and potential liabilities can impact the price of their goods. How you may be affected with Incoterms® 2020. Shippers should review and identify what Incoterms their business typically uses and once understood, check to see if they are in alignment with the changes introduced by Incoterms® 2020 and what impact they could have on their shipping. With one exception, everyone should be familiar with these 11 universally recognized terms subdivided into two categories or ‘mode of transport’: Rules for any mode or modes of transport:
Rules for sea and inland waterway transport:
What changed? A new Incoterm DPU (Delivered at Place Unloaded) has been created to replace DAT (Delivered at Terminal). DPU is the only Incoterm in which the goods are delivered unloaded at the place of destination. The ICC renamed this term because at times, the buyer and/or seller want the delivery of goods to occur somewhere other than a terminal. This is the only term that tasks the seller with unloading the goods. What’s new? As compared to 2010, Incoterms 2020 has also revamped its formatting and arrangement. Here’s a quick look at what’s new in Incoterm 2020 rules.
“Explanatory Notes for Users” for each Incoterm® have replaced the 2010 edition’s Guidance Notes and are designed to be easier for users. As with all trade compliance, it is important that all involved in international trade gain a thorough understanding of the amended Incoterms 2020 rules set to roll out on the first of the new year. For a simplified visual guide, download DB Schenker’s Incoterms 2020 At a Glance or for more information, reach out to your local DB Schenker representative. Take any of our new Incoterms® 2020 courses and learn from the experts, what changes have been made and how to apply the rules. Click here. https://tradesolutions.dbschenkerusa.com/training/incoterms-training/ “The Incoterms® Rules are protected by copyright owned by ICC. Further information on the Incoterm® Rules may be obtained from the ICC website [insert hyperlink]. Incoterms® and the Incoterms® 2020 logo are trademarks of ICC. Use of these trademarks does not imply association with, approval of or sponsorship by ICC unless specifically stated above. “ Incoterms 2020 – What You Need to Know as a Shipper syndicated from https://topmoversblog.wordpress.com/ via Tumblr Incoterms 2020 – What You Need to Know as a Shipper Here’s what global shippers can expect as they begin planning their ocean freight activities for the coming year. With 2020 right around the corner, global shippers that are planning their ocean transportation for the coming year are probably wondering what new challenges, opportunities, and trends could impact their shipping activities. Reflecting on 2019, Sheela Seth, DB Schenker’s Senior Vice President, Head of Ocean Freight USA, said the good news is that, unlike what we saw in 2018, there were no major ocean carrier events that negatively impacted shippers (i.e., carrier liquidations, massive cybersecurity breaches, etc.). The global market is stable, we didn’t experience the usual peak season this year, and carriers are focusing on strengthening their presence for 2020. In July, Hyundai Merchant Marine (HMM) announced that it would join THE Alliance as a full member beginning in April 2020. A cooperating group of major container shipping lines, THE Alliance is expected to give the carrier access to “significant new business as it seeks to gain financial stability,” the WSJ reports. The members of THE Alliance also established a new partnership with four members that will participate in the group until 2030. The actions were agreed on in Taipei in June, and are subject to regulatory approvals, the new contract between the four lines—Hapag-Lloyd, Ocean Network Express, Yang Ming, and Hyundai—will start this coming April. According to Seth, HMM has ordered twelve 23,000 TEU vessels, which will be delivered in the second quarter of 2020. Additionally, eight 15,000 TEU new ships will join HMM´s fleet in the second quarter of 2021 and deployed for Far East – North Europe trade. In May 2019, CMA CGM announced that its Singapore-headquartered subsidiary, APL, would exit the Asia-Europe trades after the summer. As a result, CMA CGM would be the sole carrier in the group to operate on the transatlantic, Asia-Europe, Asia-Mediterranean, Asia-Caribbean and Europe-India/Middle East markets. “The new organizational setup will allow the group to simplify its offer, making it more legible to its customers,” CMA CGM said in a press release, “and benefit from the expertise of specialist companies from coherent regional groups, while reducing its costs.” Global Trade The persistent trade/tariff situation did impact ocean shipping in 2019, with many shippers “rushing” to avoid the tariffs, which escalated and changed as the year progressed. These early moves resulted in an overall slowdown in ocean freight later in the year. Concurrently, exports to Europe leveled off, likely due to the ongoing challenge of Brexit plus a lack of incentives on the part of carriers and the exchange rate USD/EUR challenge. Tariffs are also impacting ocean freight right now, with those impacts expected to continue in 2020. Although, the U.S. and China both said in November that they had made progress in talks, stirring hopes of a trade agreement later this month, the U.S. administration imposed tariff increases to 15% on $300 billion worth of Chinese imports in September and indicated plans to continue raising tariffs by up to 35% on $250 billion in other goods. “These duties would extend to almost all Chinese goods that the US imports,” says Seth, “and are expected to weigh on global economic growth.” Some companies are turning to countries like Vietnam and India to handle their manufacturing and altering their supply chain strategies. Seth says carriers and logistics providers are working to alleviate challenges associated with some of these new manufacturing locations and to create a more streamlined supply chain for shippers that explore these alternatives. Combined, these factors will likely ward off any real “peak season” for ocean going into 2020, although Seth maintains a “cautiously optimistic” forecast for the year ahead. IMO 2020 is Coming Beginning January 1, 2020, the limit for sulfur in fuel oil used onboard ships operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass) versus a previous limit of 3.50% m/m, according to the new IMO 2020 regulation. DB Schenker is watching this development closely and has a particular interest in how the ocean carriers choose to deal with it. To meet IMO requirements, for example, refineries are blending fuel oils that have both high and low sulfur contents to achieve a compliant fuel oil. Other options include the use of fuel additives, exhaust gas cleaning systems (“scrubbers”), or biofuels. Use the Right Logistics Partner With political uncertainty, the U.S. election in 2020, and undercurrents about a possible recession beginning to surface, DB Schenker is ready to provide the necessary global presence that shippers need to be able to navigate their supply chains. As a logistics provider, DB Schenker partners with customers; it truly understands the ins and outs of the ocean market—be it full containerload (FCL), less-than-containerload (LCL), Ocean Solutions, Customs & Trade Advisory, Foreign Trade Zone (FTZ), or supply chain consulting. DB Schenker keeps its finger on the pulse of the ocean industry and has the expertise to anticipate challenges and offer immediate solutions. “We’re very solution-oriented and we pride ourselves in helping customers save on freight costs, gain better supply chain visibility and lead time management” says Seth, “or any other number of challenges that they may be facing.” With DB Schenker in their corner, shippers can rest easy, knowing that their ocean logistics are being expertly handled. We partner with carriers to manage service levels, specific product requirements and the familiar routes of getting individual shipments from Point A to Point B. With a worldwide presence and decades of expertise, DB Schenker provides a complete logistics package that helps shippers improve their supply chain efficiency and build their global businesses. Ocean Freight Outlook: What’s Ahead for 2020? syndicated from https://topmoversblog.wordpress.com/ via Tumblr Ocean Freight Outlook: What’s Ahead for 2020? Here are five important global airfreight trends that all shippers should be aware of as the market moves past 2019 and pins its hopes on recovery during the year ahead. Challenged by the ongoing trade and tariff wars, the global airfreight market is in the midst of a 10-month-long slump, the International Air Transport Association (IATA) reports. Measured in freight tonne kilometers (FTKs), industry volume contracted by 3.9% in August (the latest available figures) compared to the same period in 2018. Airfreight capacity, measured in available freight tonne kilometers (AFTKs), rose by 2% year-over-year in August 2019. That means capacity growth has now outstripped demand growth for the 16th consecutive month. This marks the tenth consecutive month of year-on-year decline in freight volumes, the longest period since the global financial crisis in 2008, IATA notes. “This is deeply concerning,” IATA’s Alexandre de Juniac said in a press release. “And with no signs of a détente on trade, we can expect the tough business environment for air cargo to continue. Trade generates prosperity. Trade wars don’t. That’s something governments should not forget.” 5 Airfreight Trends to Watch in 2020 From his vantage point as DB Schenker’s Head of Airfreight, Region Americas, Asok Kumar has seen firsthand the ups and downs that the global airfreight market experienced in 2019. From excess capacity, to lower freight volumes, to the ongoing trade wars, the market as a whole simply wasn’t able to catch a break this year. Hopeful about a possible recovery in 2020, Kumar is keeping an eye on these five trends, which he tells all shippers to watch as we move into the new year:
What’s Ahead? Cautiously optimistic about the industry’s potential in 2020, Kumar said most market indicators are predicting another challenging year for the airfreight sector. “From the market data we’re seeing and the feedback that we’re receiving, it looks as if we might see some improvement over 2019,” said Kumar. “There are definitely a lot of external factors that will play into it, so we’ll just have to wait and see.” What’s Ahead for Global Airfreight in 2020? syndicated from https://topmoversblog.wordpress.com/ via Tumblr What’s Ahead for Global Airfreight in 2020? This Veteran’s Day, DB Schenker Americas’ new CEO shares a message of gratitude and thankfulness for America’s military veterans. When Hessel Verhage moved into the role of CEO for DB Schenker’s Region Americas in August, he brought his nearly 30 years of experience in the logistics industry along with him. A U.S. Army veteran, Verhage is also a veteran who delivers a high level of discipline, expertise, and commitment on every job that he’s tasked with. Responsible for 24 countries in North, Central, and South America, Verhage began his logistics career driving a forklift and was later promoted to supervisor. “I worked my way up,” says Verhage. “Along the way, I had some really good mentors who helped me and others who cut me some breaks.” A New Opportunity When Verhage learned about the CEO opportunity at DB Schenker, he started thinking about what would go into taking a large, established logistics leader and helping it adjust to the new realities of the logistics field. “Logistics is changing fast, and it’s creating some challenges for the companies that are operating in it,” says Verhage. “That was my catalyst for joining DB Schenker.” Ready to be a part of change, Verhage has full operational profit and loss (P&L) responsibility for the 11,000-employee Americas region. “I’m really looking forward to the challenge, and I’ve already found a lot of great people around me to work with,” says Verhage. “At the end of the day, we all use the same ships, planes, and trucks. It’s our front line people who truly make the difference.” Taking on a Whole New Life Born and raised in Holland, Verhage was in high school when he moved to the U.S. with his mother, who is American. After graduating, he knew he wanted to go to college but lacked the funds, so he enlisted in the U.S. Army. Opting for a shorter enlistment time and a maximized GI Bill opportunity (which would pay for college), 18-year-old Verhage signed up. “America hadn’t been at war since Vietnam, so I signed up and started boot camp in 1990,” he recalls. “Saddam Hussein invaded Kuwait a month later, and life changed dramatically. At boot camp, we were actually being prepped to go to war, so I took on a whole new life.” Wounded while serving in Desert Shield (the name was later changed to Desert Storm), Verhage returned home to yet another whole new world—one where he had to apply his military experience in a career setting. We’re Glad You’re Here This Veteran’s Day, DB Schenker honors its employees who have served their countries and their families. “Veterans have a discipline, drive, and tenacity and that is always extremely welcomed in any organization where I’ve worked,” said Verhage. “I really like having veterans on my team, and not just for nostalgic purposes, but because they’re disciplined and focused and know how to get stuff done.” To DB Schenker’s many team members who have served and to veterans everywhere, Verhage offers a message of gratitude and thankfulness. “Thank you for your service,” he says, “I’m glad you’re here.”
DB Schenker Honors Those Who Served Their Countries syndicated from https://topmoversblog.wordpress.com/ via Tumblr DB Schenker Honors Those Who Served Their Countries DB Schenker Peru provides global shippers with a single point of contact for their end-to-end supply chain operations.Known for having a stable democratic political system, numerous natural resources, an expanding middle class, and a commitment to free trade, Peru has posted the highest growth rate—and lowest inflation rate—in Latin America over the last decade. These favorable conditions have created opportunities for shippers that want to do business in the country. Like most countries, Peru also has strict rules that global shippers must follow when importing goods into the country or exporting shipments to other areas of the world. For imports, shippers pay depending on what products are being shipped, and to add complexity, there are several Foreign Trade Agreements that need to be taken into consideration that can reduce ad valorem duties. Roughly 93% of imports into Peru are also subject to an 18% value added tax (VAT), as are domestically produced goods. In addition, an excise tax (ISC) is applied to certain products such as tobacco and alcoholic beverages. These and other requirements can create challenges for global shippers that are trading in Peru, where DB Schenker has been offering a one-stop, consolidated customs approach for the last two years. Jorge Roman, Customs Manager at Schenker Peru, said the logistics provider formed the division in response to customer demand for a single source of customs support and expertise. “Global shippers wanted to have just one provider handling their end-to-end supply chains,” said Roman. Put simply, those shippers wanted to be able to interact with one logistics company, be informed about their shipment status, navigate the customs requirements, and have a seamless import or export experience. Pairing those demands with its strong logistics capabilities in the Peruvian marketplace, DB Schenker decided to form a dedicated, in-country customs practice. A Single Point of Contact Up until a few years ago, DB Schenker was outsourcing the work to a handful of customs brokers. “The approach worked, but it wasn’t like having our own operation,” said Roman, whose team then went about requesting authorization to start its own customs broker operation in 2017. “At that point, we started letting clients know that we were going to be managing their customs processes in-house,” said Roman, “and that we’d no longer be working with third-party partners for that aspect of our business.” As part of that campaign, the logistics provider began integrating its custom broker’s license capabilities into its complete, commercial proposals for both new and existing customers. “We let everyone know that we were now not only offering customs broker services, but we are also managing the delivery of the goods to warehouses, storage services, loading/unloading, and the consolidation of containers,” said Roman. “That was all done with the goal of providing a complete logistics solution and a single point of contact for shippers.” Airport-to-Store Shelves in One Day Today, DB Schenker Peru’s customs department manages a full scope of responsibilities for its global customers, which include a major fast-fashion chain that sells products worldwide. When that company approached the logistics provider for help orchestrating its import operations, it was specifically interested in signing on with a partner that could manage 6-7 shipments per week—from filing the customs declarations to handling the customs brokerage requirements to ensuring that the goods were released quickly (within 24 hours or less) for distribution to its stores. “We have a day to handle the entire customs brokerage procedure for this customer,” said Roman, whose team has to be able to anticipate customs clearance times and file the appropriate customs declarations before the goods arrive in Peru. Working with local customs officers, DB Schenker established a business model that ensures that the garment manufacturer’s goods make the smooth transition from the air terminal to its stores within the desired timeframe, and without the need for warehousing or storage. “Everything is sent right to the four shopping centers where the customers’ stores are located,” said Roman. “The goods arrive at midnight and the products are on the shelves, ready for customers to buy.” More Transparency Ahead Looking ahead, Roman says DB Schenker will continue to promote a capability that’s going to become more important over the next year or two, and that’s ensuring that shipments clear customs before those goods even enter the country. “We already have this process in place, but most of the logistics providers haven’t caught up yet (i.e., because it’s not required yet),” Roman explained. “We’re going the extra mile to integrate this level of transparency into our supply chain.” A One-Stop Customs Shop for Global Shippers in Peru syndicated from https://topmoversblog.wordpress.com/ via Tumblr A One-Stop Customs Shop for Global Shippers in Peru As an environmental pioneer, DB Schenker is leading the way in green logistics and is continuously searching for ways to help protect our planet. Ecosia – a Berlin-based start-up – is offering a new way of searching the web by using the money generated from search ads to help fund reforestation projects. As of October 2019, Ecosia is the default search engine at DB Schenker, meaning over 62,000 employees using a computer in their daily work can join the movement to help reduce the amount of CO2 in our atmosphere. An average of 45 searches are needed to plant a tree, according to Ecosia. If each DB Schenker employee searches just once per working day, enough money could be made to plant over 1,300 trees every day. This could equate to over one million trees in the next three years. By switching to Ecosia as the default search engine, DB Schenker has the potential to improve the environmental sustainability of the logistics industry as a whole. “At DB Schenker we are aware of the responsibility we hold to set sustainable standards in logistics and are continuously trialing innovative solutions in environmental protection. Jochen Thewes, CEO of DB Schenker Ecosia uses 80% of their income to fund nonprofit organizations focusing on reforestation, in order to benefit the environment, people and local economies. So far, over 70 million trees have been planted all over the world.
Ecosia uses 80% of their income to fund nonprofit organizations focusing on reforestation, in order to benefit the environment, people and local economies. Ecosia is also powered by renewable energy from their own solar energy plant, meaning each search is carbon-negative and helps to remove CO2 from the atmosphere – one kilogram, to be precise. Additionally, Ecosia is transparent in their financial reporting and has high standards in user privacy and data protection. All of these factors convinced our Global Infrastructure Services department that Ecosia is a great fit for DB Schenker.
Ecosia currently supports over 20 reforestation projects in 15 countries around the world, including Brazil, Ghana, Indonesia, Morocco, Senegal, Spain, Tanzania and Uganda.By working with local partners and focusing on biodiversity hotspots, Ecosia not only removes CO2 from our atmosphere, but also helps protect endangered species, restores destroyed or damaged habitats and provides help where it is needed the most. As a global organization, DB Schenker recognizes the importance of collaborating with local communities as we work towards our goal of becoming the world’s leading green logistics provider. With many of our employees involved in sustainability initiatives – including tree-planting activities – around the world, we are proud to be taking this important next step in helping to protect our environment.
DB Schenker Employees Search Green with Ecosia syndicated from https://topmoversblog.wordpress.com/ via Tumblr DB Schenker Employees Search Green with Ecosia Latin American and the Caribbean airports account for 5% of the global share of international air freight traffic and 4% of the global share of domestic traffic, according to the 2017 ACI World Airport Traffic Report. Considering that air cargo itself represents less than 1% of all cargo shipped, that may not sound like much. But when you consider that the value of the goods shipped by air is an incredible $6 Trillion USD, or 35% of the value of all goods shipped annually, it puts LATAM’s 4-5% share — and the billions of dollars it represents — into perspective. Because air cargo is so valuable, freight traffic speaks volumes about the health of a region’s economy, the effects of trade policy, weather events, and other factors. For this reason, we took a closer look at the 10 busiest LATAM airports for air freight. According to the total amount of metric tons moved in 2018, the top LATAM airports are: 1. El Dorado International Airport (BOG) Bogota has by far the busiest cargo airport in Latin America. In the last 10 years, BOG’s YoY air cargo volume has increased by 45%, which roughly corresponds to Colombia’s 32% increase in GDP over the same period. Columbia plays a vital role in the global healthcare industry. It’s also the second-largest exporter of cut flowers (after the Netherlands) at $1.4B in 2017. The airport features 71,000 m2 in warehouse and office space, 63 cargo gates and space for 25 aircraft to simultaneously load and unload cargo. DB Schenker operates in Colombia in an exclusive partnership with Sunrise Cargo SAS, an authorized IATA agent, which features 120 employees and has over 10k m2 of warehouse space. 2. Benito Juárez International Airport (MEX) Moving into second place for air cargo volume, MEX also holds the top spot in LATAM for passenger volume: 47.7 million in 2018. This makes MEX the 33rd busiest passenger airport in the world. Between passengers and cargo, the airport’s 2 parallel runways are just about at 100% of their capacity. In 2014, a new airport to serve Mexico City’s 20 million people was approved. However, the project was canceled in October of 2018, after failing to survive a referendum vote, with about a third of the construction completed and $5B already invested. Meanwhile, a new airport to be built on the former Santa Lucía Air Force Base was approved in July 2019 after passing the environmental review. In the short term, it’s unclear how MEX can sustain the increase in cargo traffic it saw in 2017 and 2018, but it may not need to: while trade was up 1.8% between Mexico and its largest trading partner, the US, in April of 2019, airfreight volumes were flat during the same period[1]. For more information on Mexico’s busiest cargo airports, click here. DB Schenker offers customs clearance services at MEX and operates 30,000 ft2 of bonded warehouse space, including 52,000 cubic ft of refrigerated space (both 15-25°C climate-controlled 2-8°C cold chain space available). 3. Guarulhos International Airport (GRU) Locally known as the Cumbica Airport, GRU was edged out of the #2 spot by MEX after sub 2% growth in 2018. The airport did, however, enjoy nearly 7% growth in 2017, and it still accounts for about 10% of all LATAM airfreight traffic. DB Schenker Brazil’s customers saw better numbers in 2018, with 10% outbound and 20% inbound increases. However, according to Fernando Fetter, Director of Airfreight at DB Schenker Brazil, this illustrates another challenge: the imbalance between inbound and outbound freight. “While inbound airfreight is fairly consistent and lucrative, outbound traffic is irregular and therefore commands lower rates … this leads airlines, especially freighter operators, to seek alternative markets in South America.” The problem is further exacerbated by generally high landing fees (although GRU did experiment with a 100% landing-fee exemption from Q2 2016 to Q1 2017). Another challenge that continues to plague GRU is long wait times. Fetter says: “a 24-48 hour airfreight export time frame may be extended to 48-96 hours due to pre-transport delays and airport inefficiencies”. It turns out that when they were privatized, airports in Brazil agreed in advance to large lump-sum payments to the government at pre-determined intervals, based on the promise of steady economic development. Since such development never really materialized, airports such as GRU have been forced to cut staff, reduce service hours, delay repairs & maintenance of critical equipment, etc. as they struggle to stay profitable. “At GRU trucks can only dock within pre-booked times,” explains Fetter, “it’s a challenging market that demands a lot of flexibility and the high level of service that can only be provided by experienced freight forwarders such as DB Schenker.” DB Schenker is one of Brazil’s top 5 freight forwarders and offers operational support at GRU to handle documentation, in/outbound warehouse, delivery/pickup trucking, and logistics within Brazil and beyond. 4. Arturo Merino Benítez International Airport (SCL) SCL saw double-digit growth in 2018, strengthening its hold on the #4 slot on this list. The airport has the distinction of being the longest non-stop destination for a number of European carriers, as well as South America’s main gateway to Oceana destinations such as Sydney and Melbourne. Recently, however, Chile has been aggressively pursuing “bigger fish”. To illustrate, last February Santiago-based LATAM Cargo added twice-weekly service to Chicago, primarily to deliver Asia-bound Salmon. Thanks to Chicago-Asia interline partners, the carrier is able to offer transpacific transit times of less than 35 hours[2], which is a big deal for a country that is exporting some 700 metric tons of Salmon a week (Chile exported more than $3B in fish in 2017). The Asian market also snapped-up 80% of Chile’s fresh cherry crop last year, valued at nearly half a billion USD. Besides cherries, the country has an abundance of blueberries, asparagus and cut flowers to export, so it seems that air freight capacity demand will continue to grow. DB Schenker has 104 employees and 6,300 m2 of warehouse capacity in Santiago and offers Air Freight import/export services and Customs clearance services, as well as Contract Logistics and Distribution services. 5. Jorge Chávez International Airport (LIM) Chile is not the only country with its eye on the Asian market — Peru is reportedly in negotiations with China to update its 2009 free trade agreement. The country has been emerging as an important fruit and vegetable exporter to the world since the mid-80s. In 2017, Peru’s Customs and Tax Administration and National Agricultural Sanitation Service simplified control proceedings for short perishables, facilitating quicker exports. Currently, Peru is the world’s second-largest exporter of asparagus (just after Mexico, see Managing Peru’s Cold Food Chain Logistics), but it has its eye on taking the top spot this year. Last year the country also exported approximately $500M worth of blueberries; it’s looking to replace Chile as the world’s top blueberry exporter as early as 2021[3]. Other exports include cacao, nuts, textiles, and even Tesla window glass; important imports include hi-tech, spare parts and pharmaceuticals. Schenker Peru has 70 employees and provides customs brokerage services at LIM. It maintains additional offices in Lima Cargo City, where it offers warehousing, including refrigerated and cold storage, provided in partnership with Talma Peru. 6. Viracopos International Airport (VCP) The airport in Campinas is not far from Guarulhos International Airport in São Paulo, and therefore shares many of the same issues. However, there is one significant difference: last year, VPC grew faster than any other LATAM airport. It grew 18.1% in 2018 (compared to GRU’s lackluster 1.7%), moving up two places on this list. At least some of its growth can be attributed to an increase in fruit exports — Brazil is the world’s 3rd largest fruit producer, yet it ranks 23rd in exports. So in 2018, the Brazilian government launched an ambitious program to increase fruit exports[4]. DB Schenker’s Fernando Fetter, mentioned earlier, notes that they have made significant incursions into this market. “Our teams are trained to handle cold-chain shipments from a coordinating/documental aspect with great expertise,” says Fetter, which also benefits other perishables that require special handlings, such as beef and fresh fish. “And 80% of the perishables we handle flows through either Viracops (VCP) or Guarulhos (GRU).” With some 600 employees and 12 branches, DB Schenker, one of Brazil’s largest Brokerage services, is able to offer door-to-door road and road-air services within Brazil and beyond. 7. Mariscal Sucre International Airport (UIO) Flowers are a big deal at Quito’s UIO airport. Ecuador is the 3rd largest exporter in the world (after Columbia), moving almost $1B annually. And demand is growing, prompting carriers such as Emirates SkyCargo to add flights — the carrier now operates 4 flights a week and estimates it has shipped some 50,000 tons of flowers over the last 5 years[5]. But Ecuador exports far more shrimp and prawns — over $3 B in 2017. So having a new, modern airport with 12,000 m2 of warehouse space with cold-chain capabilities on site (and with the potential to add another 18,000 m2 when needed), definitely gives the airport an advantage. UIO’s cargo volumes have increased year over year since it opened in 2013, with the double digit growth in 2017 and 2018. DB Schenker provides air, land and ocean services in Ecuador through its partnership with SAMISA, which specializes transporting perishables by air and ocean. 8. Ministro Pistarini International Airport (EZE) Cargo statistics for 2018 were unavailable for EZE, also known as the Ezeiza International Airport, at the time of publication. But volumes grew 11.2% in 2017 to a total of 215,200 metric tons, so even a modest 2% growth would be enough to keep the airport ahead of 9th place on this list. However, to maintain 6th place as it was in 2017 would require over 12% growth YoY. So we’ll have to wait and see. Meanwhile, Terminal de Cargas (TCA) at EZE announced its second expansion of on-site cold-storage facilities in September of 2019, adding 810 m2 of temperature-controlled and 3410 m2 of cold-storage. TCA already had 85,000 m2 of on-site warehouse space, with 17,500 cubic meters of temperature-controlled space that allows for 3 levels of control (-20°C, 2-8°C, and 15-25°C). TCA’s warehouse space is modular and can be adapted to various loads as needed, making EZE one of the most technologically advanced airports for cold-chain logistics. It also has 22 import and 17 export cargo docks, features pallets scanning at unloading and has space designated for handling dangerous goods. Primary air exports include agricultural products, perishables, and chemicals; while imports include electronics, machinery and auto parts, and pharmaceuticals. DB Schenker has over 290 employees in Argentina, including on-site staff in the Customs-restricted TCA area, and is therefore able to expedite cargo through the airport, while quickly resolving issues as they arise. 9. Luis Muñoz Marín International Airport (SJU) Puerto Rico’s economy is supported by pharmaceuticals, textiles, petrochemicals, and electronics manufacturing, and as such SJU is the busiest airport in the Caribbean. The airport grew 12.4% in 2018. While some of that increase was no doubt due to an influx of relief supplies desperately needed after the category 5 hurricane Maria hit the island on September 20, 2017, the airport saw an even greater increase the previous year: YoY growth was 13% in 2017. DB Schenker offers cargo services in Puerto Rico through its offices located in Miami, FL. 10. Miguel Hidalgo y Costilla Guadalajara International Airport (GDL) Rounding out this list is GDL in Guadalajara, the second busiest airport in Mexico. The recently expanded cargo operations at GDL covers some 6.7 acres and is able to accommodate aircraft of all sizes. Two of the 10 busiest routes, Los Angeles-GDL and Memphis-GDL, accounted for 7.2% and 4.2% of all international air cargo to/from Mexico in 2017. DB Schenker offers customs clearance services at GDL and specializes in electronics as well as climate-controlled operations for pharma and perishables. What to expect in 2019 Clearly there are a lot of factors in play in the LATAM air cargo market, not the least of which are shifting trade policies and the threat of a global economic slowdown. No matter what happens, there will be winners and losers, so who will come out on top in 2019 is anyone’s guess. Meanwhile, we’ll keep an eye on the numbers! For the top 10 freight airports in the US, click here. For the top 5 in Canada, click here, and in Mexico, click here. The Top 10 Freight Airports in Latin America syndicated from https://topmoversblog.wordpress.com/ via Tumblr The Top 10 Freight Airports in Latin America How DB Schenker is helping shippers streamline their supply chains and leverage opportunities in Latin America. Each unique in its own way, the economies of Brazil, Mexico, and Colombia represent some interesting interdependencies that are supported by active transportation lanes that flow between the three countries. As the second-largest economy in Latin America and the 15th largest in the world, Mexico ranks as the largest player in this trio of trading countries. Brazil comes in second and is the largest country in South America and the ninth largest economy in the world. Colombia is the fourth-largest economy in Latin America after Brazil, Mexico, and Argentina, and brings its own set of opportunities to the trading landscape. For the most part, the exports that are moving between these countries include perishables (i.e., fruits, vegetables, and other foods) and some automotive parts and components. All three countries also export to the U.S. and Europe, both which rely on Latin American sugar, coffee, lumber, copper, and other products. In terms of imports, Agustin Lopez, Vice President Intra Americas for DB Schenker, says most shipments coming to Brazil, Colombia, and Mexico comprise finished goods—mainly, consumer, retail, and some electronics. “That’s a broad look at what’s moving in and out of this region of Latin America,” says Lopez. Lopez continues, “From an export perspective, it would be amiss of us not to mention that one of the largest trading partners with Latin America is the U.S. In fact, the U.S. has more free trade partners in Latin America than in any other region of the world, and of course that is a major part of DB Schenker’s experience.” Growing Trade Opportunities The increasingly-complex political climate across all three countries notwithstanding, trade among them continues to grow year over year. In March, for example, Mexico’s government reached an agreement with Brazil on the free trade of light vehicles, (subject to a 40% regional content requirement), thus paving the way for more open commerce between Latin America’s two biggest economies, Reuters reports. The Colombia-Brazil trade connection is also strong, averaging $112.84 million (USD) annually between 1989 and 2019. Trade among the three countries could get a bigger boost this year, thanks to policies being set forth by new Brazilian president, Jair Bolsonaro. “The consensus is that he will help promote economic growth,” says Lopez. For example, Bolsonaro is currently reviewing a free-trade agreement with the U.S. that could be very positive for Brazil, should it be put into effect. “Brazil has been the largest economy in Latin America for a long time,” Lopez explains. “this free-trade agreement with the U.S., could translate into even more trade activity for the country.” Decades of Experience As he looks around at the trade climate, challenges, and potential opportunities currently taking shape in Mexico, Colombia, and Brazil, Lopez says DB Schenker is focused on connecting shippers’ needs with its own logistics and transportation strengths. Specializing in brokerage, air freight, ocean freight, and overall supply chain movement in all three countries, the company’s Latin American office handles a range of commodities, lumber, electronics, and industrial products. “A lot of electronics manufacturing takes place in the Mexico’s northern region, with some of those goods going directly to Latin America and the United States,” says Lopez. “That’s one market that we’re exploring more, and that we want to be a leader in.” This year, DB Schenker opened two new less-than-containerload (LCL) routes for shippers, including one between Brazil and Peru and one between Mexico and Brazil. By the end of 2019, it will add two more—between Mexico and Brazil and between Mexico and Peru. DB Schenker has assembled a seasoned team of experts to help its customers navigate the complexities of global trade. “We have people on our team who have decades of experience working in logistics in Latin America,” says Lopez. “We’re all working together to help shippers to leverage those strengths, optimize their supply chains, and succeed in the global market.” Intra Americas: Exploring the Trade Routes Between Brazil, Mexico, and Colombia syndicated from https://topmoversblog.wordpress.com/ via Tumblr Intra Americas: Exploring the Trade Routes Between Brazil, Mexico, and Colombia |
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