One such concern revolves around political tensions and unrest. “The US-China situation will affect us in Latin America,” said Jaime Alvarez Price, Senior Director, COPA Airlines Cargo & Courier, referring to the ongoing trade war between the United States and China. The Latin America region is facing its own political problems as well. “Political unrest in Brazil and Argentina is making things hard on everybody,” Price said, noting a possible consequence of the unrest: “Commerce might slow down, but the US seems to be doing OK.” However, given the uncertainty over both the political unrest and the duration of US trade conflicts with China (and its nearer neighbors, Mexico and Canada), it is difficult to predict whether or for how long trade will continue at healthy levels.
On another note, unpredictability in the region isn’t entirely political – some is built into typical trade flows. “Latin America is characterized for the volatility of import demand and the dramatic seasonality of its exports,” said Andrés Bianchi, CEO, LATAM Cargo. This can present challenges for air freight operators, but also provides a great opportunity for those that “generate the network and capacity combinations that balance flexibility and efficiency,” according to Bianchi. Achieving balance and efficiency calls for changing regulations and developing infrastructure to increase connectivity in Latin America, and requires that “all stakeholders engage and collaborate in this direction to support the air freight development and, ultimately, the region’s development,” Bianchi said.
Improving cooperation and connectivity in Latin America will also support growing e-commerce traffic, which Price and Marcelo Penna, US Cargo Country Manager, Azul Cargo Express, noted as a major force in the region generally, and particularly in Brazil, Mexico, and Argentina.
“To meet this demand, [it] will be necessary to understand how the e-commerce transportation works because it has some particularities in relation to other segments, such as the short delivery period, the need for complex routing and tracking systems, capillarity, fleet of aircraft, urban vehicles, and fractional packaging,” Penna said. “Few carriers are able to do this service today with excellence, so it will be very important to know this kind of transport well for e-commerce.”
What exactly that means for fleet deployment in Latin America is sure to be a major topic of conversation in San Diego. COPA’s Price noted that belly capacity in the region is growing, “but there are limitations,” and that market conditions may force some freighter relocation as operators adjust to account for volatility.
Those interested in hearing more about freighter deployment and other topics in Latin American air freight are invited to join us 10-12 October at the Omni San Diego for Cargo Facts Symposium, where these issues will be addressed on a panel titled, “Latin American Focus: Rebounding Economies, Renewed Interest In Freighters?” Distinguished panelists include:
- Jaime Alvarez Price, Senior Director, COPA Airlines Cargo & Courier
- Andrés Bianchi, Chief Executive Officer, LATAM Cargo
- Gerald Lee, Chief Executive Officer, Modern Logistics
- Marcelo Penna, US Cargo Country Manager, Azul Cargo Express
For more information, or to register, visit www.cargofactssymposium.com.