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Sunday, October 23, 2016

Need for Latin American Transport Infrastructure Investment Highlighted

October 23, 2013

TT Club logo

TT Club logo

TT Club’s Senior Underwriter, Dan Negron, speaking at the recent TOC Americas Conference in Miami outlined his views on future Latin American trade growth and the pressures that this will create on the region’s transport infrastructure. Excerpts from his address follow:

“Two examples of robust economies are Colombia and Peru.  The latter has grown its export trade by a multiple of five over the last decade, while Colombia has a sustained GDP growth rate in the region of 5% in recent years.  Both have burgeoning middle classes, a significant driver of international trade,” explained Negron.

Such economic growth is one of four factors pin-pointed in a recemt TT analysis; the other three being government policies, improved connectivity and distribution channels.  It is clear that a number of government policies, particularly the privatisation of ports and free trade agreements are significant in terms of increasing trade.

Negron reported however that the need for greater investment in domestic infrastructure to improve transport connectivity within the region, and a need for logistics supply chain services to be more organised, were in danger of frustrating trade growth in reaching its full potential.

While Latin American ports are themselves becoming increasingly better organised, the infrastructure used to move goods to and from the inland production and consumption locations have not been modernised at an equivalent pace.

“In addition to this need for capital investment to improve connectivity,” said Negron “very often the functions of warehousing, trucking, cargo consolidation and other related services are performed by individual operators or by shippers themselves.  Systems therefore tend not to be fully-integrated and the efficiencies of a cohesive supply chain can’t be realised.”

The TT Club is the international transport and logistics industry's leading provider of insurance and related risk management services. Established in 1968, the Club's membership comprises ship operators, ports and terminals, road, rail and airfreight operators, logistics companies and container lessors.

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