Getting products into warehouses then out to customers has been a difficult challenge due to ever changing geopolitical events. Could technology play a part in changing behaviours?
In this series of features – originally published in the 2022 Global Ecommerce Region Report – DeliveryX looks at ecommerce logistics on different continents.
National Geographic describes South America as a continent of extremes, home to the world’s largest river (the Amazon) as well as the world’s driest place (the Atacama Desert). There are similarly extreme hurdles to overcome for the ecommerce and logistics industries in the region.
Many of the twelve sovereign states have their own currencies, taxation and customs authorities, which can cause problems. In addition to customs taxes, tariffs and fees, it can take up to a month for certain goods to be cleared through customs, especially in Brazil and Argentina.
The requirement by a number of destination countries – among them Peru – that any package being delivered features the recipient’s tax ID number is a further hindrance. Brazil also requires a World Customs Organization Harmonized System (HS) code for the merchandise being shipped.
Such red tape can lead to delays, inventory build- ups, rising costs and, ultimately, customers waiting longer for their products to arrive. Once through customs, there is then the issue of infrastructure. Roads remain the primary means of transportation yet 60% are unpaved, hampering the speed of delivery by truck to inland locations. And that is before considering the final mile, a timely first delivery attempt being very important in the ecommerce sector.
Could collection solutions offer a solution? In the first half of 2022, Brazil ranked top in the region, with around 5% of parcels delivered to collection points. While this may seem small, when compared to Argentina at just 1.5%, it hints at the developing collection movement in Brazil. If other South American countries looked at parcel locker networks, some of the continent’s logistics headaches could be avoided.
Despite the obstacles, like all continents, the pandemic saw many shoppers turn to ecommerce who are unlikely to ever turn back. This has led to significant jumps in ecommerce sales. Argentina was the fastest-growing with a retail ecommerce increase rate of 79%, while Brazil’s ecommerce growth rate was 35%.
This feature originally appeared in the 2022 Global Ecommerce Region Report.