UPS Americas President Romaine Seguin discusses the strategic importance of South Florida as a critical trade and logistics pathway to Latin American markets
How is South Florida an advantageous logistics hub?
South Florida is the connection to Central America and South America, which are critical markets for us. The expanding middle classes in Latin America, along with healthy GDP growth and rising international influence, are creating attractive opportunities for commerce and investment. South Florida is a strategic location for American and European companies seeking to venture south to expand their business.
South Florida is an important northern entryway for Latin America as well. It’s amazing the quantity of perishables that come through here – just look at flowers. Over 90 percent of the flowers that enter the U.S. come through Miami. Flowers are the number one import, followed by other perishables, and after that fish. It is the starting point to feeding the U.S.
What are the areas of growth for the logistics sector?
One of our strategic imperatives is to capture more of the healthcare vertical in Mexico and throughout the Americas region. The medical equipment and biotechnology industries are experiencing tremendous growth and change, and these are the areas where our consumers are pushing us to go. The number of patents expiring each year continues to increase, which means that a generic, more affordable product is get-ting into the market.
It’s not an easy market to enter because of the complexities entailed, whether it’s related to temperature control, infrastructure or human capital. Moreover, the regulations and licensing requirements in each country are different; for instance, some countries require facilities to have a pharmacist on site.
What are some recent developments in trade policy?
The most recent free trade agreements (FTAs) the U.S. signed with entered into effect in late 2012, one with Panama and one with Colombia. Despite continuous political debate, there is a movement to take the barriers down and enhance free trade. What is important is to educate the private sector, especially companies here in South Florida who wish to expand their businesses to international markets, on what FTAs are and what they can mean for a company.
Within the logistics sector, what factors most impact cost of operations in South Florida?
The great expense in transportation in Latin America is the customs processes – they’re not automated and extremely tedious. Automation provides more security, more transparency, and more consistency. We are working with government officials to improve these procedures. For South Florida-based logistics companies, the bulk of whose business is trade with Latin America, these delays become quite problematic.