Cross-border prospects abound for Latin American e-commerce SMBs.
As consumers continue to purchase more goods and services online, cross-border shippers of all sizes have an opportunity to profit from the continued e-commerce rush.
According to Eduardo Lopez-Soriano, marketing vice president at UPS Capital, the financial services branch of UPS, small and medium businesses (SMBs) operating in the United States, Canada, and Mexico have some of the best chances for growth in the e-commerce cross-border marketplace.
“Before joining UPS Capital, I worked for UPS in the Americas region [from 2010 to 2015], where I was responsible for marketing in Latin America and the Caribbean, and e-commerce was already exploding,” Lopez-Soriano told FreightWaves.
“There were some markets there that were truly cutting-edge in Latin America, such as Mexico, Brazil, and even Ecuador.” I believe that growth occurs in both directions. When you ask Mexican e-commerce purchasers where they shop, some shop locally, some shop in Latin America through Mercado Libre, and a lot of them — the last figure I heard was around 40% — buy from merchants in the United States.”
According to the Mexican Online Sales Association, Mexico’s e-commerce business will have $20.8 billion in sales in 2021, a 27 percent growth over 2020. (AMVO).
According to AMVO, the top-selling categories in Mexico’s e-commerce market last year included food delivery (72%), apparel (64%), electronics (55%), toys (51%), and beauty and personal care products (49%).
According to Americas Sector Intelligence, Mexico’s e-commerce market will increase to $60.8 billion by the end of the year.
According to the Brazilian Electronic Commerce Association, Mexico was second only to Brazil, which had the largest e-commerce industry in Latin America in 2021, totaling $33 billion, a 120 percent gain over 2020. Argentina, Chile, Ecuador, and Colombia are also major Latin American e-commerce markets.
While there are several potentials for North and Latin American SMBs to expand their foreign customer base, cross-border shipments are frequently difficult for SMBs due to higher shipping costs, longer delivery windows, and customs regulations.
According to Lopez-Soriano, client expectations in Mexico and Latin America are the same as they are anyplace else in the world.
“They all want to have their goods on time and in good condition,” Lopez-Soriano added. “I believe there is an understanding in Mexico and other nations that timing is difficult to attain when buying over the border.”
If SMBs are sending products across international borders, Lopez-Soriano recommends having things insured as well as a backup plan.
“If I’m a customer and I bought from a U.S. website and my product was damaged, I’m going to call the merchant, and I think the merchant will be a little more comfortable doing a reship or reimbursing the customer when they know they have insurance and they can submit a claim to a U.S. insurance agency and get paid for that shipment and that product,” Lopez-Soriano said.
According to Lopez-Soriano, more SMBs are resorting to dropping shipping to offer the best possible client experience.
Drop shipping is a business strategy that allows entrepreneurs to open an online store and sell products to customers without ever having to stock the items themselves. Drop shipping is an order fulfillment option that allows e-commerce enterprises to outsource product procurement, storage, and shipping to a third party, often a supplier.
The goal is to reduce costs for all parties involved while also improving delivery times for customers. AliExpress, Alibaba, SaleHoo, Worldwide Brands, and Doba are some of the world’s largest drop shipping companies.
“It’s another method to obtain more flexibility, to get the products in transit by using drop shippers, who are a lot closer to the end customers, and because of the proximity, you can do that with ground service, rather than going air, which is more expensive,” Lopez-Soriano explained. “There are some dangers associated with it; you must ensure that you’re dealing with the correct drop shipper, one that adheres to the same quality standards that you do.”
Tractor-trailers going through Arizona are temporarily prohibited from driving in the left lane on a segment of Interstate 10 outside of Phoenix.
According to the Arizona Department of Transportation (ADOT), the right-lane limit for truck traffic is designed to assist decrease crashes, as well as “the resulting delays and closures due to these incidents.”
“ADOT is erecting new signs that will restrict heavy vehicle truck traffic on this busy portion of the roadway to increase safety on a 20-mile segment of Interstate 10 between Phoenix and the city of Casa Grande,” ADOT said in a release. “According to data for the area where the signs are displayed, large vehicles were involved in around 20% of incidents and 15% of rear-end and sideswipe crashes.”
The truck limitations, according to ADOT, are a temporary safety measure along the final two-lane stretch of I-10 between Phoenix and Tucson, which has yet to be extended to three lanes in each direction. The limitations will be posted until the upgrade project begins in 2023, according to ADOT.
Port Houston employs the world’s first zero-emissions drayage truck.
In collaboration with Sunburst Vehicle Lines and Nikola Corp., Port Houston recently received its first zero-emissions drayage truck.
The electric vehicle picked up a container at the Bayport Container Terminal before transporting it to its next location. According to a press statement, the car was built by Nikola in Coolidge, Arizona, and has a range of up to 350 miles.
The port stated its goal of becoming carbon neutral by 2050 in April.
“This is another step toward zero emissions here in Houston and meeting our long-term sustainability goals,” said Port Houston Executive Director Roger Guenther in a statement.
Cargobase has opened a new branch in Mexico.
Cargobase, a logistics software vendor, recently launched an office in Mexico City to better service clients across North America, according to a press statement.
“Prior to the epidemic, we were already seeing firms across industries develop and relocate manufacturing operations from the United States and Asia to Mexico,” Wiebe Helder, founder, and CEO of Cargobase said in a statement. “We saw that more corporations are putting up logistical operations and control towers in Mexico to cover the entire North American region during the epidemic.”
The Mexico City branch will employ sales personnel that will primarily focus on the country’s automotive and electronics firms.
Singapore-based Cargobase is a business software company that provides a transportation management system for both contracted and uncontracted freight. The company was created in 2013 and currently has operations in the Netherlands, India, Mexico, and the United States.
