"Our clear focus is the integration process for our new companies in Colombia and Peru, which will take us to the end of 2024."

Martin Sack

REGIONAL HEAD AMERICAS, LESCHACO

October 13, 2023

Leschaco has recently opened two new subsidiaries in Peru and Colombia. What motivated these expansions?

In 2022, Leschaco has acquired two former long-term partners, TPL in Peru, and Coltrans in Colombia. A growing regional footprint allows us to think and act even more as one integrated team. Colombia represents the third largest economy in LATAM. Our customers from the chemical industry will benefit from this acquisition, as we are launching our Tank Container operations in Colombia very soon.

How have you observed trade flows within the region in 2023?

We have seen a drop in volumes this year, but this was to be expected as we came back to normal following the doom and boom of the pandemic. What did come as a surprise was that the drop in volumes lasted so long. In our budget projections, we were expecting a recovery in Q2 of this year, or latest by Q3, but part of the industry has now accepted that demand will stay slow for the rest of the year. However, due to the mentioned acquisitions in the region, we are striving for growing market share, despite of the overall economic slowdown.

Could you help familiarize our audience with the state of logistics infrastructure in Mexico?

Good news first: Nearshoring-driven investments came faster and bigger than anyone anticipated, with many companies deciding to produce in Mexico. This suggests a positive outlook for the country, but there remain important caveats about the overall logistics setup, especially when it comes to adding more volumes to ports, airports, or roads. In terms of trucking, Mexico is dealing with a serious shortage of drivers. Trucking companies face security threats from organized crime and Mexico lost thousands of truck drivers to the US during the pandemic.

Do you think the trend of regionalizing supply chains is here to stay?

While some businesses can continue as always, there are many sensitive industries that have experienced major difficulties during and after the pandemic and are making changes in the way they move goods. Even in a post-pandemic world, we are seeing constant global disruptions caused by climate change, political turbulences, or labour upheavals. The world of just-in-time concepts and free global trade has been seriously affected. Because of this changed environment, regionalization has become part of the answer to many companies, creating greater flexibility and speed. In my opinion, the America region, and especially Mexico, will benefit a lot from this ongoing trend of regionalized supply chains.

How is Leschaco progressing towards becoming carbon neutral by 2030?

Leschaco is on a well-defined path to become carbon neutral by 2030 at our own assets – offices, warehouses, and other premises. We are currently building a huge warehouse (30,000 m2) in the Netherlands, which will fulfil the highest levels of sustainability through solar panels, electric heating or high standards of insulation. We will continue to be making the right choices, including by being selective with the companies we work with, like shipping lines or trucking companies producing low carbon emissions. The new world requires new behaviours, and one can choose how to proceed. Requests about our sustainability approach have grown significantly these last two years and I expect this trend to increase, until we get to a point where sustainability will rank first above all other metrics.

What projects do you currently have in the pipeline?

One clear focus is the integration process for our new companies in Colombia and Peru, which will take us to the end of 2024. In the near term, we are planning to open a new warehouse in Mexico, in Querétaro, as an important pillar to establish our contract logistics infrastructure in the country. Another project we are launching during the last quarter of 2023 is the “Lighthouse”, an advanced 4PL regional order management control tower system. In Latin America, we tend to prioritize adding more people, but we are now changing to a technology-first model, supported by a well-experienced and dedicated team of supply chain specialists. The Lighthouse offers our customers the freedom to manage their orders from beginning to end as part of a 4PL approach. We offer all documentation digitalized, with real time visibility tools from the moment a customer buys a product to the moment it arrives at destination.

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