ACW Latin America Cargo Supplement 27th October 21

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LATIN AMERICA CARGO SUPPLEMENT

ACW Latin America Cargo Supplement is sponsored by


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LATIN AMERICA CARGO SUPPLEMENT

Your guide to the latest developments in the international airfreight industry

COVID-19 REWRITES LATAM AIRFREIGHT RULES “Extraordinary opportunity” in Colombia

REASONS TO BE CHEERFUL NAS: super positivity at region’s prospects

27th October 21


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COVID-19 REWRITES LATAM AIRFREIGHT RULES For HAE Group, the UK-based GSSA, there is every reason to throw off the chilly English sangfroid and embrace the Latino beat when it comes to dealing with Latin America. Felipe Campillo, regional director Spanish LATAM embraces the Latin heat when it comes to working for the GSSA’s clients in the region. He says: “HAE currently operates in Brazil, Chile and Argentina. Our plan is to continue to expand operations in Latin America, offering diversified products to our customers seeking solutions for their business.” The East Midlands Airport-based agency is constantly in expansion mode and is keen to grow in the region. He says: “We are mostly opportunity-driven and like to grow with our airline partners. For example one of our TCM (Total Cargo Management) appointments is with Eastern Airlines who will soon expand operations to another two countries in Latin America. We are working on expanding our office footprint to support their development. “We are also expanding activity into other countries on an agency basis, this is to support our charter and solutions activity – we do this

on a crosstrade basis using our own interline agreements with our airline partners.”

Regional competition Competition is a constant in the airfreight industry. However, in this matter, Campillo is showing his own sangfroid. “We are lucky that we have our value-added solutions business and our own technology platform that we feel gives us the ‘HAE Edge’. In his opinion, what is unique about the region’s airfreight for Campillo is the way Latins do business. He says: “Latins prefer to work with friends. The central basis is their trust in the counterparty. They think more in short term than in an expanded plan of their businesses. It is very common for people to start doing business after meeting each other or communicating by phone, not just the ‘cold’ internet.” It is not just the friendliness of the industry that inspires Campillo. The airfreight sector in the region is behind the whole process of airfreight despite being hindered by the slow growth in infrastructure. The airfreight industry in the region has been changing after many years of operations being stuck in a rut and during the pandemic, decisions were taken faster than ever.

Conservative Before the pandemic, markets in the region were very conservative as business seemed to work and produce good results, notes Campillo. However, after COVID-19, manufacturing industry was forced to be open for new ideas once the regular and common operations began to disappear. Customers needed to keep exporting and importing their products so airfreight had to change what it did. At the same time, Campillo is pleased to note that the workforce in the airfreight industry in the region remains very steady. He says: “Most of the freight forwarders have key people who have worked with them for many years even though young people in the region, like in other places in the world, do not want to be in the same place forever. It is of course beneficial for people to travel, work for periods of time in other countries and bring their experience back to the industry, their work practices and new ideas. We always need new ideas.” With a great Latin flourish, Campillo concludes his thoughts on airfreight in Latin America. He says: “Latin America trade is growing fast and there are lots of eyes on the region looking for business opportunities to grow and HAE is one of them.”

“We are lucky that we have our valueadded solutions business and our own technology platform that we feel gives us the ‘HAE Edge’

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“EXTRAORDINARY OPPORTUNITY” IN COLOMBIA

“We will focus on defining our future fleet and network strategy to strengthen our value proposition to our clients”

progressing hand in hand with technology at an accelerated pace, driven by a dynamic market thanks to e-Commerce, which increased its share due to the COVID-19 pandemic, among others, and its need for shorter delivery times at the lowest possible cost. This situation has encouraged many new transportation companies to emerge with different operating models and platforms, increasing local competition.” Colombia continues to implement, further develop, and strengthen its infrastructure. The country is moving forward with its ambitious infrastructure plan known as 5G, which includes the improvements of highways, airports, waterways, and railroad projects. According to the World Economic Forum’s Global Competitiveness 2020, Colombia ranks 81 out of 141 countries in quality of road infrastructure. Therefore, the need for improvements is imminent. In the National Competitiveness report of 2020-2021 completed by the

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With more than 20 years of experience in executive positions in a range of industries and a decade of experience in the aviation sector, Gabriel Oliva, chief executive officer, Avianca Cargo is the perfect man to help his operation navigate through the rapids of the current pandemic. What has he brought from these experiences to his new role? Oliva says: “My combined experience in leading organisational transformation processes and developing and executing business strategies in addition to my experience in diverse functions in the air cargo industry within the region enables me to add value to Avianca’s new vision of its air cargo division. We have an extraordinary opportunity to generate exponential value for our customers by providing more and better solutions to take our cargo business to another level. “We will focus on defining our future fleet and network strategy to strengthen our value proposition to our clients. In addition, we need to continuously improve our cost efficiency to strengthen our competitive advantage, add technological tools to be more agile and convenient, raise the quality of our service and enhance our decision-making process to a more agile, and data-driven one. All these will be achieved with highly talented, customer focused and dynamic teams. These actions will contribute to the long-term strategic objectives of Avianca Cargo to continue strengthening our competitive position in the region and adding more value to our customers.” He oversees Deprisa, Avianca’s last mile delivery business. How does he see this? “Ninety percent of the volume operated by Deprisa is concentrated in the transportation of documents and packages within Colombia, with a multimodal operation leveraged on the domestic air network and complemented with the ground network that allows us to offer the broadest portfolio of services in the market with the best delivery times. From Colombia, we provide international courier services taking advantage of synergies between the two business units (Avianca Cargo and Deprisa) and with third parties that allow us to offer first and last-mile coverage worldwide in more than 200 countries,” he says. “In Colombia, the infrastructure can present geographical and climatic challenges that we can overcome thanks to the air connection. In particular, the industry is highly competitive and fragmented, so it offers great business challenges such as cost optimisation, reduction in delivery times, and service quality. The industry has been


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“Avianca Cargo has been actively involved in transporting the Covid-19 vaccine”

of the modern low-cost world: competitive prices and operational efficiency, a very robust passenger network with the highest number of frequencies in the region, a differentiated and flexible product, adjusting to our customers’ needs, LifeMiles, the best loyalty programme in the region, our VIP lounges and the service that has always characterised us. “In addition, the company is giving Avianca Cargo more prominence as a business unit. We continue with great growth potential, maintaining our leadership in Colombia and continuously expanding in other strategic markets, providing more and better solutions to our customers. We are migrating to leaner processes and operations to match the organization’s target: simplification, which will undoubtedly translate to delivering timely and quality service to our customers, with a strengthened route network in strategic markets.

Latin America matters

company KPMG, there were 12 initiatives chosen for the first wave of 5G, reaching an investment amount of $5.2 billion dollars. Cargo investments on the up In terms of airports, there are 14 international airports in Colombia, including the main cargo transportation airport (El Dorado) in Latin America. In the last ten years, significant investments have been made in cargo facilities at the region’s airports, the cargo terminals at the El Dorado - Bogotá airport being one of them. However, as reported, the government plans to start the bidding process for the construction and modernisation of three airports in the fourth quarter, the expansion of the capacity of the airport that serves Cali, the nation’s third-largest city, as well as those of Buenaventura and Neiva, in western Colombia. All these infrastructure projects in the pipeline will undoubtedly impact Colombia’s airfreight evolution positively. Adrian Neuhauser, president, and chief executive Avianca Holdings, said: “Cargo has without a doubt enormous relevance for Avianca as it represents an important percentage of our total income.” Avianca Cargo is key to the company and will continue to be a relevant business unit for Avianca. It has grown consistently, contributing to the long-term strategic objectives of the company. With the restriction of commercial passenger transportation, which has not yet recovered 100%, the business units, including cargo, represent 43% of Avianca’s total revenues for the first half of 2021. Through its plans, the organisation has indicated that Avianca Cargo is here to stay, and my incorporation will contribute to consolidating a long-term plan to position ourselves as the leader in the region. Furthermore, Avianca Cargo’s role has become more prominent now that it is part of the Executive Leadership Team of Avianca Holdings, facilitating our decision-making process, increasing our exposure, and viewing cargo’s relevance as part of its network and fleet decisions as well. It is a great responsibility to forge a robust strategy that meets the expectations of our customers and partners, for whom we will continue to provide strategic solutions while increasing our efficiencies. Oliva says: “The pandemic has been an opportunity in terms of redefining our business vision, identifying where we add value to our customers, and moving towards becoming a company that will combine the legacy of Avianca’s more than 100 years with the best

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Latin America is a region of constant growth as it continues to rise in global prominence and is an important trading partner for the United States. Avianca Cargo has been serving this market for many years, currently operating 154 weekly freighter frequencies from and to the United States. Latin America produces products in demand worldwide. For instance, from Colombia, the world’s second-largest flower exporter, and Ecuador, Avianca Cargo transports approximately 134,000 tonnes of flowers per year to the United States. He says: “From Chile, we mainly transport salmon, fresh fruit, seeds; and from Mexico, auto parts and perishables with our affiliated company AeroUnion.”

COVID-19 pandemic The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. How long into the future does Oliva anticipate the airline will still be carrying COVID-19-related cargoes? “It is uncertain, but we are committed to supporting the critical distribution of humanitarian goods, healthcare, and pharmaceutical products for as long as required, ensuring industry standards. “Avianca Cargo has been actively involved in transporting the Covid-19 vaccine. We have been working closely with allies and several freight forwarders to develop vaccine distribution solutions to Latin America, transporting to date more than 31 million doses to 11 destinations in the region. We renewed our cooling facilities at our Miami hub; with an investment of over $2 million, we installed stateof-the-art equipment with a storage capacity of 300 tonnes on racks and 200 tonnes in full pallet for a total of 500 tonnes to preserve perishable products and a separate area exclusively for handling Pharma temperature-controlled products.” There is more to Latin America airfreight than perishables traffic, Oliva considers. “Yes, even though perishable represents 67% of the cargo originating in Latin America, we have seen growth in textile, e-Commerce, and temperature-controlled cargo (pharma, medicines, human organs). There has also been an increase in the transport of high value/technology goods (art, vehicle parts, medical equipment) and dangerous goods. “As a leading airline in cargo transportation in the Americas, our commitment is to continue to offer an array of destinations and connections and excellent service tailored to our customer’s needs. Therefore, at Avianca Cargo, we are focused on generating exponential value for our customers, strengthening our presence in key Latin American markets by enhancing our route network, fleet plan, and increasing our efficiencies that will take our service to another level. As part of the company’s long-term strategy, we will continue working to be a leader in the region,” he concludes.


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REASONS TO BE CHEERFUL

“Latin America is going through rough times especially due to COVID-19 and the air cargo sector has not been oblivious to this”

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A Mexican biologist is an unlikely source for a pessimistic comment about the region that Mark Thiermann, regional director for South America for Frankfurt-based GSSA, ATC Aviation, would take issue with. Following the pandemic, Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” For industry professional Thiermann, this is a step too far in pessimism. He says: “Latin America is going through rough times especially due to COVID-19 and the air cargo sector has not been oblivious to this. But talking about a lost decade is much too pessimistic. I believe in the resilience and perseverance of the people that will allow for Latin America to recover and grow in the next coming months.” This resilience and perseverance may have been given a boost by the election in Washington of Joe Biden last year. Entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, the US president is said to want to prioritise strengthening the United States’ ties to the region. “With travel bans lifted and the proposed strengthening of ties with the United States, trade will definitely increase and will have a positive effect on the air cargo business,” notes Thiermann. As a leading GSSA, in terms of ATC Aviation’s overall activity, how important is Latin America? With 24,000 tonnes of airfreight sold during the pre-COVID year 2019, Latin America represented roughly 8 % of ATC Global tonnages. He says: “We are convinced that airfreight capacities will come back and that with the strong management team we have in the region we will further grow tonnages and market-shares. It’s the group’s strategy to expand in South America through organic growth but also by purchasing other GSSAs.”

production in Peru due to the phenomenon known as El Niño and Chilean salmon production due to ISA virus that led to nil production for several months. Fortunately structural measures have been taken in the salmon industry to reduce the risk on the Peruvian side, the diversification of crops to reduce weather- related incidents. Both have led to a more stable production.”

Latam carriers For many years ATC Aviation has been representing GOL Linhas Aereas (G3) in several countries in South America and also recently the GSSA has been greatly supporting the regional expansion of Colombian carrier LAS Cargo (4L). The GSSA is always looking to ways of adding new airlines to its portfolio that may generate synergies with these

The Latin way It is all too easy for the outsider, even in the global aviation market, to quickly revert to stereotypes of the Latin American people. The Spanish word ‘mañana’ is often thrown about to describe a slow-paced, lazy lifestyle. For Thiermann, there is no truth to this image. He says: “I do not see many differences with regards to other nationalities or staff from other continents. All are very reliable and professional executives with great knowledge of the business. “The charm and warmth of the Latin executives stand out and makes it easy to work with, and definitely helps establish business relationships, negotiations and project development much easier and efficient (and obviously more fun!).” The airfreight industry in Latin America has become quite consolidated after years of growth, he notes. It is based on a mix of local “heroes”, local cargo agents and international freight forwarders. The norm is to see many direct AWBs with one shipper-one agent and very little consolidated AWBs, “This encouraging the who-you-know and who-knows-you within forwarders-exporters-airlines relationships,” says Thiermann. “The main weakness is the high dependency of perishable products, which in turn depend on weather and health-related events that may affect the production and therefore, air transport demand as well. Good examples are the depletion of asparagus and mango

airlines and its other existing representations worldwide. Keeping his cards close to his chest, Thiermann says the company is currently in the process of adding another regional airline to its portfolio, which it will be publishing soon. He says: “We are currently the GSSA with the largest own network in South America, with ATC Aviation staff and offices in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Peru and Venezuela, plus additional joint-ventures in Haiti, Guyana, Paraguay and Uruguay. [This gives us] top local know-how. Our next step is growing to the rest of Central America and the Caribbean so that we are able to offer our represented airlines a broader spectrum of own managed network. One-stop-shop is the name of the game! “Our South America staff is all locally sourced and therefore have the vital knowledge of their respective markets and customers. Additionally, our headquarters have set up an exchange programme between ATC Aviation offices around the world, all 53 of them, which enables us to move staff around in an exchange/training mode in order to


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ue to mutate and therefore new or modified vaccines will have to be developed continuously. These vaccines will not only be developed or sourced from China, USA, Russia or other countries, but we will see more locally reproduced vaccines that will require shorter logistics. Such is the case of Sinovac that will install a vaccine plant in Santiago, Chile and an R&D centre in Antofagasta, in the north of Chile, in order to reproduce vaccines for Latin America. Another example is Pfizer who are planning to produce vaccines in Brazil for distribution in Latin America. “This will require proper pharma air products that are already being offered by us and or represented airlines to distribute them around the continent.”

Fruit of their labour

standardise our service, expand and share knowledge, generate synergies, and grow co-operation between the offices. Unfortunately this programme has been put on hold due to COVID-18, but we are certain that come the lifting of health restrictions worldwide, we will be able to restart this exciting project.” The first case of COVID-19 in Latin America and the Caribbean was reported in Brazil on February 26, 2020. While Thiermann would argue with Ms Bárcena about a ‘lost decade’, he does accept that COVID is “here to stay”. He says: “We believe that COVID is here to stay. The virus will contin-

One cliché about Latin American airfreight is that it is all about the perishables. Well, in truth, according to Thiermann, it is almost the truth. He says: “Depending on the country of origin and the month of the analysis, between 10% and 35% of total exports from South America are non-perishable cargoes, so there is definitely a demand for general cargo that include chemicals, car parts, raw materials, but also live animals, Dangerous Goods amongst others.” Another cliché has to be the presence of narco traffic from the region being flown to drug users in North America, Europe and Asia. However, Thiermann is confident that international commercial aviation is not at any danger from this traffic. He notes: “Each one of the countries has set up the proper safety and security measures to ensure the early detection of this kind of traffic, so the risk is minimised.” For the commercial airfreight industry, Thiermann believes in the export traffic from Latin America, the two largest trade lanes are Bogota-Miami and Santiago-Miami, while on the import side the largest trade lanes are Miami-Sao Paulo and Miami-Santiago.

“We believe that COVID is here to stay. The virus will continue to mutate and therefore new or modified vaccines will have to be developed continuously”

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NAS: SUPER POSITIVITY AT REGION’S PROSPECTS “This is too pessimistic, we all disagree! Once the region can get past COVID and become healthy once again, many industries will boom and expansive growth will ensue”

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Network Airline Services aims to provide the best quality and quantity of people to maximise the revenues of the airlines we represent around the world. NAS are extremely optimistic at the prospects of rapid, expansive growth within the Latin American region. Network Airline Services (NAS) is the General Sales and Services (GSSA) division of the Network Aviation Group, a wholly owned and inter-related aviation group which started life over thirty-five years ago. Network is unique in the fact that they also have their own managed fleet of aircraft consisting of Boeing 747 Freighter aircraft and various others over the years. This arm of the company is known as Network Airline Management (NAM) who offer both regular, scheduled flights and charter services on a worldwide basis. “Our freighters allow NAS to provide the airlines we represent additional capacity as and when required, a unique benefit not offered by any other cargo GSA.” NAS has expanded its GSA operations in Central/Latin America and the Caribbean by establishing its own presence and our ongoing strategy is to continue expanding in the region. The further rollout of additional NAS offices in the rest of Latin America is part of NAS’s wider three-year plan. In order to serve their Latin American clients and customers effectively, Network employs Spanish and Portuguese speaking staff in many of its regional offices. It has a long-established legacy that continues to this day representing Latin American carriers in Europe and several other regions. During this period, its teams have gained a key understanding of the key commodities and clients who ship from the Rest of the World to Latin America. Furthermore, over the last decade Network has seen its global footprint rapidly expand in Europe, the Middle East and Africa. Network’s represented carriers include those serving Latin America from other regions as well as carriers based in Latin America. The reason for their enthusiasm is obvious: they believe that Latin America will be a region that many airlines will seek to serve or increase their capacity during the 2020s and beyond. “NAS sees a need in the region for a GSA with an international network to establish a web of offices in and around the region to provide these carriers with a quality GSA solution which we regularly provide,” says John Gilfeather, sales director of Network Airline Services. NAS has and continues to represent Latin American airlines over the last 25 years in most global regions. Certain Latin American countries have a very strict customs system which can cause headaches for airlines and freight forwarders to navigate. However, NAS’ experience of the potential pitfalls means its team can advise and check the paper-

work of forwarding clients to ensure they avoid costly mistakes before they even happen.

Growing exports When it comes to exports, “the weather is a BIG contributor in dealing with temperature sensitive cargo, such as frozen goods or keep cool perishables. It is imperative that all facilities are available to keep the cargo at the optimum temperature,” notes Gilfeather. Network works closely with its airlines and representatives to make sure that any temperature sensitive cargo is stored and transported safely and correctly. Latin American airfreight exports to Europe are growing. Commodities include perishable goods such as flowers, fruit, and vegetables. Network view this airfreight growth as set to continue.

COVID-19 impacts COVID-19 resulted in the suspension of many passenger flights to and from Latin America presenting global forwarders a real challenge to get their goods to the region. NAS’ teams were able to find creative routings and solutions allowing their forwarding clients to still get their cargoes to the region, quickly. A particular challenge was the transportation of temperature sensitive pharmaceuticals. “This challenge was overcome by meeting and listening to our customer’s collective needs and being able to secure cargo-only loads that generated guaranteed revenue. This enabled our carriers to operate cargo-only flights between Europe and Latin America,” he says. Is there more to Latin American airfreight than just perishables? Gilfeather is passionate: “YES! There is way more than just perishables, such as automotive products and cars, heavy machinery including mining equipment, just to name a few. Alicia Bárcena, head of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), cautioned that the region should brace for a “lost decade.” The spokesperson bridles at this description. “This is too pessimistic, we all disagree! Once the region can get past COVID and become healthy once again, many industries will boom and expansive growth will ensue,” he says. Latin America’s business culture is said to ‘place a high value on establishing personal relationships’ and in turn this will aid the region’s inevitable airfreight business growth, with more passenger airlines wanting to fly to the region, as well as freighter-only aircraft which will create a higher capacity for customers. “The red tape is becoming less as relationships blossom which reduces the complexity to fly to the region regularly,” says Gilfeather.


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THERE IS NO MAÑANA IN LATIN AMERICA AIR CARGO A lazy cliché about Latin America is that it is a region where urgency is unknown and that tomorrow will always do. Not in airfreight. Think Latin American airfreight, think perishables traffic. If there is one market associated with one export trade, then it has to be the countries in Latin America and their work in keeping the flower vases and fruit bowls of the world filled. At some points in the calendar, almost 90% of cargoes flown from the region are perishable. Even out of season perishables traffic rarely falls south of 70% of total flown cargo. This allows forwarders, cargo handlers, airport authorities and airlines to develop great expertise in handling fresh and cut flowers and fresh produce such as fruit and vegetables. Latin American carriers did not support the growth, shaving 0.5 percentage points off the total. Overall capacity, measured in available cargo tonne-kilometres (ACTKs), remained constrained at 10.8% below pre-COVID-19 levels (June 2019) due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9% on June 2019 levels, partially offset by a 29.7% increase in dedicated freighter capacity. Latin American carriers reported a decline of 22.9% in international cargo volumes in June compared to the 2019 period. This was the worst performance of all regions and a weakening of performance compared to the previous month. International capacity decreased 28.4% in June 2021 compared to June 2019. This weak performance is mostly due to local airlines losing market share to carriers from other regions. According to a report by Global Information, Inc. (GII), Latin America Air Freight Industry - Growth, Trends, COVID-19 Impact and Forecasts (2021 - 2026) published on May 13, 2021, “the Latin America Air Freight (sic) industry is expected to exhibit a CAGR (Compound annual growth rate) of over 3% during the forecast period. Commercial air transport of cargo in the Latin America region has undergone enormous changes in the recent decade,

owing to factors such as exponential consolidation of the low-cost airline model and ever more demanding safety and environmental requirements. Growth in the market has put enormous pressure on airport infrastructure, making operations more complex and requiring greater investment in both physical and technological infrastructure to optimise its use and provide services for cargo.”

Competitive landscape The report considers the “the Latin America airfreight industry is moderately fragmented in nature. However, the industry is dominated by some of the major players like FedEx, UPS and Emirates. The growing demand for airfreight transportation services has opened new challenges for air cargo service providers. Air transport has become more expensive with the rising fuel prices; however, it is also driving a need for more efficient planes which has created a market for advanced cargo-only flights. Airlines need to focus on implementing fuel-efficient solutions and accommodate innovative technologies to provide cost-effective services.” It will come as no surprise to Latin American industry observers that e-Commerce is said to have been pushing air cargo in the region towards greater visibility and transparency throughout the supply chain, with Brazil being the biggest market. Companies like Azul are focusing on the expansion of their presence in the country via collaborations and partnerships with e-Retailers like Amazon, say the report authors. The report points to greater trade assimilation between the region and some of the most important trade areas, including the United States Mexico Canada (USMCA) and the EU-Mercosur agreements signed in 2020. “Both could have substantial positive effects on growth of the e-Commerce market, the demand of faster deliveries; boosting the airfreight market,” says the report.

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THE $46 BILLION DESTIN Andrés Bianchi, LATAM Cargo CEO is beginning to reflect on his airline and how it has been affected by the global COVID-19 pandemic.

“The United States exports 380,000 tonnes by air to Latin America; that is airfreight with a total value of $46 billion”

The breadth and depth of the pandemic’s impact, as well as the speed at which it spread throughout the world, were unprecedented, considers Bianchi. He says: “It is hard to be prepared for something of such magnitude. The key in a situation like this is to adapt rapidly to the various scenarios that come up. We implemented several initiatives in order to mitigate the impact of the reduced belly capacity and to offer alternatives that satisfied our customers’ needs at a critical time for their businesses while effectively supporting the region’s economy. “In our case we focused on understanding the key variables impacting our business, having a broad master plan of how to navigate changes on those variables and rapidly implementing initiatives to address those changes,” says Bianchi. “For instance, it was clear we were bound to lose half of our international capacity due to the suspension of belly operations, so we focused on understanding how demand could behave and on how the new supply-demand equilibriums would shape up. We also did extensive work on how to support our home markets by bringing PPE and on how would we be able to support vaccine logistics. Overall, we are satisfied that we could redeploy capacity by combining increased freighter utilisation with the launch of an aggressive passenger-freighter programme.”

Cargo Rewards The airline’s Cargo Rewards programme was introduced in 2015 and it is currently available all around the world. This loyalty programme rewards the carrier’s largest international clients with LATAMPass miles for every tonne they move with the airline. “All the miles accrued are easily redeemable for tickets in LATAM and associated airlines through the web or any of LATAM Group’s Contact Centres,” says Bianchi. “For the past five years we have seen a constant interest in our pro-

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gramme from our clients. As a result, we have been investing in it, expanding the eligibility criteria and working together with LATAMPass to improve the benefits offered.”

Forty-six billion dollars Does, or should, Latin America matter to the United States? Bianchi is empathic it does. He says: “Yes, it does as it is both an important cargo origin and destination. Latin America is the third most important region in terms of airfreight to the US, representing 20% of the exports (behind Europe and Asia Pacific with 37% and 31%, respectively) and 23% of the imports (behind Asia Pacific and Europe with 40% and 30%). “The United States exports 380,000 tonnes by air to Latin America; that is airfreight with a total value of $46 billion. Brazil is the biggest destination market with 94,000 tonnes, followed by Colombia, Mexico, and Chile, with 49, 48, and 40 thousand tonnes, respectively. “The US also imports 750,000 tonnes from Latin America with a total air value of $23 billion. Colombia is the biggest origin with 185,000 tonnes, followed by Chile with 175,000 tonnes and then Peru, Mexico, and Brazil with 58, 57, and 54 thousand tonnes, respectively. As global annual numbers, Latin America exports 1.6 million tonnes of airfreight with an equivalent air value of approximately $94 billion and imports 1.4 million tonnes with an equivalent air value of approximately $154 billion.”

Relevant Airfreight is “extremely relevant” for Latin America, as it not only enables relevant exports out of the region, but it also supports key sectors by bringing in critical inputs, considers Bianchi. It is a very competitive market with a variety of value propositions, ranging from belly-only players to sophisticated freighter-only players that provide customers with multiple options and forces airlines to continuously update their products. The main weaknesses are lack of infrastructure to support efficient growth and government-related barriers to digitisation.


SUPPLEMENT

TINATION The region will follow the same trend as the rest of the world in terms of medical supplies related to the COVID-19 pandemic. As it has been seen, the virus and its different strains have affected all regions of the world in a very similar way with just small differences in timeframe.

Perishables There is more to Latin America airfreight than perishables traffic, notes Bianchi. He says: “Considering imports and exports in Latin America, perishables represent 35% of total airfreight. If we focus only on exports, perishables are by far the main commodity and represent over 60%. It mainly consists of flowers from Colombia and Ecuador, salmon from Chile, asparagus from Peru, berries and meat from Argentina, and tropical fruits from Brazil. But there are also other commodities exported like automotive parts, foodstuffs and beverages, pharmaceutical products, fragrance or flavour chemicals and so on. “Now, if we look at the imports, there is a broad diversity of commodities that go from machinery parts and components for the mining industry in Chile, parts and components for the automotive sector in Brazil, machinery for industrial uses, pharmaceutical products, computers and high technology components, among others.” On entering office with a profound understanding of the Americas and a track record of advancing policies fundamental to the region’s prosperity, President Biden is said to prioritise strengthening the United States’ ties to the region. Does Bianchi expect this to be reflected in a cargo uptick to and from the US? He says: “Policies that foster inter-regional trade are positive for the countries involved. They also generate opportunities for airlines like us. Having said that, it is hard to understand how they may impact or change it. “Nowadays, we are seeing strong demand from and to Latin America, most markets have recovered and even surpassed pre-pandemic levels. Part of this growth is influenced by supply chain disruptions (backlogs and inventory shortages) and growth in the e-Commerce sector.”

Air cargo - both globally and regionally - has a significant trust component. The airline’s value proposition seeks to address the elements that build and preserve trust over time. Bianchi concludes: “At LATAM Cargo we seek to strengthen the links with clients, employees, suppliers and all the stakeholders encouraging open dialogues and feedback. Our value proposition incorporates proactively seeking growing together with our clients and caring about the communities in which we operate. Also, as part of LATAM Group, our sustainability strategy focuses on generating and sharing value with all stakeholders.”

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