As Maersk Line creates a new container shipping division to cater to the north-south trades in Latin America, NVOCCs are also ramping up investments in the growing region.
In the last three years, NVOCCs and freight forwarders have been handling more cargo in the U.S.-to-Latin America trade lane. U.S. containerized export volume to Latin America has risen 3.3 percent since 2010, and NVOCCs and freight forwarders have increased their share of that volume by 1.3 percentage points.
Trade within the Americas region is expected to continue to grow at an above average pace, driven by “commercial integration between nations taking place over the past 10 years, the development of middle class across the region and as a response to rising wage and production costs in Asia,” said Robbert van Trooijen, president of Maersk Line’s Latin America and Caribbean region, in a letter to customers. According to the World Economic Forum, Latin America, including the Caribbean, has a projected growth rate of 3.4 percent for 2014, which outperforms other regions in the world, particularly advanced economies.
As a result, Triton Overseas Transport has launched a less-than-containerload export service from Houston to destinations throughout Central America and the north, west and east coasts of South America.
“Central and South America hold a large consumer base that relies on U.S. exports to meet much of their trade needs,” said Sean Ratliff, sales associate at the Houston-based NVOCC, in a written statement. “Seated in the Gulf of Mexico, Triton is excited to open two previously underutilized LCL trade lanes to the region.”
Central America alone holds almost 40 million potential buyers of U.S. exports, as the region has yet to fully advance its domestic manufacturing capabilities and thus relies on imports, according to the U.S. Commercial Service. An estimated 50 percent of those imports come from the U.S., the agency reports. In the first three quarters of 2013, U.S.-to-Central America containerized exports totaled nearly 500,000 TEUs.
In the near term, Triton plans to switch its main port of call for Latin American exports from the Port of Miami to the Port of Houston, according to William Onorato, Triton’s CEO. Currently, the NVOCC has routes from Miami to Colombia, Venezuela, Chile, Peru, Uruguay, Ecuador, Honduras, Guatemala, Nicaragua, Costa Rica and Panama. Before the announcement of this new LCL service, the NVOCC only provided service from Houston to Brazil and Argentina.
That is set to change however, as the Port of Houston offers a “cheaper and faster” route to Latin America, Onorato told the JOC.
“Our goal is to create the Port of Houston as the gateway to Central and South America,” he said. “Latin America as a whole represents the Port of Houston’s second largest trade area.”
Meanwhile, Dependable Global Express, an NVOCC and freight forwarder serving Central and South America from the U.S. West Coast, has launched a biweekly LCL consolidation service from Los Angeles to Buenaventura, Colombia, as well as a direct weekly LCL service to Guatemala City.
Antonio Bellido, DGX’s trade lane manager for Latin America, said in a published remark: “These new service offerings represent another step in expanding DGX’s west coast Central and South America service network. We will continue to develop our direct LCL network, which currently consists of eight destinations on the west coast of Latin America, as well as provide on-forwarding services from Los Angeles to remote Central and South America inland points through all eight Latin American consolidation points.”
“DGX will add new services, as well as increased frequency to every Latin America destination,” Bellido added.
DGX’s network currently includes weekly service to Guatemala; Costa Rica; Guayaquil, Ecuador; Callao, Peru; and Valparaiso, Chile, as well as biweekly service to El Salvador, Panama City and Buenaventura. The NVOCC also offers weekly service to San Juan, Puerto Rico.
“Doing business in Latin America is not like doing business in Asia, Australia or Europe,” Bellido told the JOC. “It’s not as standardized like the rest of the world and you have to react to a cultural element many are not used to.”
Notably, corruption in Latin American ports is a common problem for companies operating in the region, partially stemming from inadequate infrastructure. However, Bellido noted that communications systems in the region are “good,” and getting there is “very easy and accessible.”
CaroTrans has also been expanding its presence in Latin American trade. The NVOCC and ocean freight consolidator recently announced a new directly weekly LCL and full containerload export service from Houston to Rio de Janeiro, Brazil, to complement an existing direct Houston-Santos export service. The company also recently launched an import LCL service from Buenos Aires to New York, and from Callao, Peru to Los Angeles, according to Greg Howard, CEO of CaroTrans, in an email to the JOC.
“We have other service developments aimed at strengthening our market position in the Caribbean and Central America,” he noted.