Logistics Challenges in Latin America and the Caribbean : The Case of Colombia
Rodriguez Realpe, Carolina (2024)
2024
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https://urn.fi/URN:NBN:fi:amk-2024052214625
https://urn.fi/URN:NBN:fi:amk-2024052214625
Tiivistelmä
This thesis aims to provide an understanding of the challenges of logistics in Latin America and the Caribbean while specifically focusing on Colombia. A comprehensive overview is elaborated on a comparison of the logistics performance index (LPI) between Latin American countries and the factors that determine the LPI score. Trade agreements of the said geographical area are reviewed. With an overall picture of the logistics challenges in Latin America, Colombia’s performance is further analyzed in more detail. The trade relationship between Finland and Colombia is also studied, as the agreements between these two states from the perspective of logistics.
The methodology chosen for this thesis is qualitative research conducted through a secondary data collection process, utilizing existing information related to the selected topic. International reports, news, articles, and statistics available via the Internet of well-known organizations are considered. The analysis of this information is descriptive to understand the reasons behind the logistics challenges Latin American countries face. Also, primary data collection is conducted through an expert interview to support the key findings of this study.
Based on the material, low logistics performance scores in Latin America are due to the quality of transport infrastructure and the inefficiency of customs processes. Transportation costs are higher compared to other parts of the world, resulting in significant disadvantages. Latin American countries rank between 47 and 129 out of 139 countries worldwide in terms of customs clearance efficiency scores. In Colombia, cities and ports lack alternative road connections, causing delays and more costs. Worldwide, Colombia ranks 97th in road connectivity and 104th in road quality. However, it has digitized customs clearance processes and developed procedures that allow quick release of goods. Its procedures seem to be in line with the EU-Andean Community Trade Agreement. It could be estimated that the Colombian regulations are not the reason for low performance in customs clearance but perhaps the application of the rules itself. Overall, Colombia needs significant improvement in road infrastructure and utilization of waterways.
The methodology chosen for this thesis is qualitative research conducted through a secondary data collection process, utilizing existing information related to the selected topic. International reports, news, articles, and statistics available via the Internet of well-known organizations are considered. The analysis of this information is descriptive to understand the reasons behind the logistics challenges Latin American countries face. Also, primary data collection is conducted through an expert interview to support the key findings of this study.
Based on the material, low logistics performance scores in Latin America are due to the quality of transport infrastructure and the inefficiency of customs processes. Transportation costs are higher compared to other parts of the world, resulting in significant disadvantages. Latin American countries rank between 47 and 129 out of 139 countries worldwide in terms of customs clearance efficiency scores. In Colombia, cities and ports lack alternative road connections, causing delays and more costs. Worldwide, Colombia ranks 97th in road connectivity and 104th in road quality. However, it has digitized customs clearance processes and developed procedures that allow quick release of goods. Its procedures seem to be in line with the EU-Andean Community Trade Agreement. It could be estimated that the Colombian regulations are not the reason for low performance in customs clearance but perhaps the application of the rules itself. Overall, Colombia needs significant improvement in road infrastructure and utilization of waterways.