Interview: Juan Camilo Samacá
What needs to be done for Colombia to reach international levels of competitiveness in logistics?
JUAN CAMILO SAMACÁ: If we take as a reference the World Bank’s Logistics Performance Index 2016, which reported that after evaluating factors such as customs processes, infrastructure, transport, and quality and capacity of related services, Colombia ranked 60th position, and the sector faces many challenges.
Infrastructure is one of the priorities that must be addressed. Even though the so-called “fourth generation” road projects led by the government are interesting, they are not necessarily a concrete solution to achieving better connectivity and reducing logistics costs. The objective goes beyond that, to the integration of all modes of transport in an efficient way. We need to go beyond looking at transport over land, but also achieve the unification of existing multi-modal, secondary and tertiary routes by integrating the port network with fluvial, rail and air transport.
In addition, there is the need for the constant and sustainable development of new ports, airports and free zones, as well as the provision of different modalities for the development of foreign trade. It is vital to provide plans that seek to generate employment and investment, as well as developing industrial processes that make the region competitive. In order to reach that point, we need clarity, sustainability and proper regulation for smooth operation.
To what extent has government-led investment in infrastructure helped improve logistics?
SAMACÁ: There have been improvements but progress is slow. There are priorities that must be considered to generate positive impact and further development. The multi-modal transport development plan – to reduce the primacy of road transport, which accounts for over 90% of the country’s transport – as well as the modernisation of the country’s existing road network through the construction of double roadways, tunnels and viaducts, and the enabling of its efficient connection to waterways and railways, are key investment considerations that would directly improve competitiveness.
Also, a plan that promotes the creation of value-added transport and service companies as opposed to thousands of owners who work independently with small fleets and without a regulatory structure would make the sector more competitive. In terms of the biggest challenges in developing and implementing Colombia’s Transport Master Plan 2015-35, a long-term project involving numerous sectors of society, the country must work to achieve continuity. This way it’s a national effort and not just a plan by the current government. We must assure through different governments we achieve a commitment on the execution and control of the projects as well as sound financing by maintaining a balance between income and investment expenses so that investors’ capital costs are not raised.
Is there room for new players to enter the Colombian market, and if so, which segments of logistics are most in need of investment?
SAMACÁ: International trade and commercial exchange will always be in search of the economic efficiencies in each market. New participants who bring efficiencies in their processes, improvements in service levels, cost reduction and a simplification of processes are always welcome. As for the segments that require greater investment needs, technology must facilitate effective and real-time communication among the participants of the chain as well as increasing visibility in the process in order to make more informed and efficient decisions along the entire logistics chain.
There is also a need for migration from traditional logistics models to fourth-party logistics models that generate commitments between the service provider and the customer. This is done by sharing risks, benefits and knowledge about the industry, which generates efficient, responsible and competitive companies.
Read More from OBG
