By: Jorge Choque
Jul 20, 2021
Rethinking logistics in the new century will help transform transport performance. And not just that. But it will also help promote the integrated development of the country..
Logistics may seem like a young business. It is? Of course not. The Inca Empire had one of the best commercial and logistical connection systems on the continent. The technology of tanks, warehouses and transport chains are tourist attractions all over the world today. We can therefore say that the passion for this area is in our roots. However, as we now find ourselves in a pivotal year, it is urgent to ask what challenges our industry faces at the dawn of the third century?
2021 is a year that reflects uncertainty – in the wake of the pandemic – but also hope. It is the year of vaccines, the year of reactivation and, above all, it is the year when our country celebrates its 200 years of independence. Why must the logistics industry (often referred to as frivolous) be in line with the most anticipated national anniversary of our entire generation? Well, there are several reasons.
Rethinking logistics in the new century will help transform transport performance. And not just that. But it will also help promote the integrated development of the country, improve the supply of urban centers, facilitate regional trade, promote the international competitiveness of our production and, of course, improve the quality of life of the inhabitants. There are few reasons.
Diagnosis for the 3rd century
But to enter a scene on the right foot, you have to know where you are. According to the Logistics Development Index (IDL), the country ranks 60th out of 155 countries, with a score of 2.9, far behind leaders in the region such as Chile, Brazil and Mexico. For example, the most populous and largest city in the country, in economic terms, Lima, is experiencing enormous difficulties. There is also an important aspect: the need to reduce logistics costs from 32% to 23% of the value of the product (in countries like Chile they only represent 15% of the value of the product and in Brazil and Mexico, they are 26% and 20% respectively).
Honestly, discussions about improvements in the sector are not recent. Already in 2014, the Competitiveness Council had established guidelines for generating development in the perspective of two hundred years of independence. The plan defined ideas for bridging the logistics and transport infrastructure deficit by generating articulated logistics service hubs that support the regions’ economic growth.
While there are encouraging investments – in the port area for example – this can still be unfavorable if additional infrastructures are not created to facilitate connection to these terminals. That is to say: the creation of multimodal platforms associated with the expansion of services that are under the concession modality. Change is quite a process, but what better opportunity than to enter a new century of our Republican life.
A good diagnosis is vital. While the National Logistics Survey is positive action, there is still a long way to go in getting businesses to participate. It is therefore also important that competitions are launched for research and logistics projects. Just for information: on the occasion of the Bicentenary of Argentina, in 2010 there was an essay competition entitled: FPT Prize of the Bicentenary of Logistics and Transport for a better Argentina. Why not motivate something like this in our country?
What we have waiting
Although global trade has managed to reverse the pullback generated by COVID-19 to macro numbers, there is still a gap in Peru. For this reason, we must promote measures that promote trade facilitation, since the World Bank maintains that it “plays a leading role in improving competitiveness”. So what do we need? Let’s see.
In the airfield, for example, it is time to overcome a long delay. According to the Competitiveness Report 2014, our national air network comprises 136 airport facilities, 74 aerodromes, 12 national airports, 11 international airports and 39 heliports.
However, despite the fact that connectivity has grown, according to Oxford Economics, domestic airports continue to exhibit a low degree of connectivity compared to those in other countries in the region.
In the earthly realm, well, there’s not much to say. We all witness the disastrous condition of the city’s main roads and tracks. And not only that, but the lack of town planning and the delay in projects. However, something positive and recent must be saved: congratulations that the current government has decided to promote the construction of the new central road. It is 11 billion soles of investment that will make this project possible, which we hope accelerated. It is inspiring to know that Daniel Alcides Carrión will be called, as our martyr and national hero.
Coming back to the terms of evaluation, it is also urgent to create an observatory system. Thus, for example, information would be provided on the level of costs and services offered by logistics operators to customers abroad. In this way, not only in our country the incentive to offer would be increased, but better practices of transparency and competitiveness would be forged. Although the Ministry of Transport and Communications and the National Association of Ports are leading this project, there is still no concrete development.
Our industry also owes a large debt to technology. Although implementations are taking place in transport, storage and distribution chains, this area needs to be further strengthened. The government could encourage the sector to move towards smarter logistics and, why not, even environmentally friendly. It can mean a lot in the age of e-commerce.
And, by way of conclusion, perhaps the most important objective of this bicentenary is to be able to implement a logistics system, which articulates the road infrastructure, airports, ports and platforms with safe traffic. , fast and low cost. Remember that Peru has lost several places in the last logistics performance index of the World Bank. It went from 69th place to 83rd, the lowest of all time. But this negative indicator should serve as fuel for improvement.
Business development with Peru
As we know, planning a logistics vision involves planning in detail long-term investments – more than 20 years – from an intermodal perspective, and in close coordination between the three levels of government.
What critical reflection do we bring with us in the face of the Bicentenary? Well, the logistics industry can no longer go it alone. For this reason, presidential candidates should keep in mind that the logistics industry is cross-cutting and moves around $ 1.6 billion per year. And it doesn’t need favors, but rather specific things, such as, for example, the acceleration of infrastructure investment projects: the Lima metro, the Transandino tunnel or the Chinchero international airport. It would also help if they worked more on creating smart roads or reducing the informal transporters that populate the city.
Two hundred years ago, the economy of our country was limited to exclusivism. As you will remember, Spain forced us to only trade with them. With Independence, this was broken. Peru was born and opened to the world. This is where we need to focus: on growing the country. Let us therefore turn to the field of logistics, with the firmness of reaching the third century with technology, development and efficiency, as our ancestors wanted.